When one local security company sent a private investigator to the supposed office of one of its competitors, it found something that didn’t sit well with its leaders.
According to the company’s lawyer, the investigator did not see a company sign, there were no business cards available, and the investigator was unable to actually visit a physical office when given a tour by the leasing agent.
The investigator, who had been hired by Trans-West Security, had been trying to dig up dirt on Servexo, a relatively new competitor that had recently beat Trans-West for a lucrative county contract.
Upset that it had been beaten, Trans-West appealed the county’s decision, claiming Servexo had found a loophole in a policy intended to give local businesses a slight advantage over out-of-towners.
Outside companies, Trans-West suggested, could game the system in their favor, beating out local companies for thousands of dollars in county contracts.
“The county is missing out on a major opportunity,” Trans-West’s Attorney Dustin Dodgin said in March during the appeal hearing. “When someone claims to be a local vendor and they’re not, they’re out, they’re disqualified.”
But, under the current policy, outside businesses may not be being disqualified, according to Trans-West, to the detriment of locals.
When a reporter visited Servexo’s purported address on California Avenue, a secretary at the shared office space said no one from the company was available and calls to the company’s president John Palmer went unreturned.
Servexo claimed to the county in March it has used the office space for three years, and that it employs local people for its security services.
Palmer told supervisors in March that his company deserved the contract, and said Trans-West could not be allowed to have a “monopoly mentality.”
“We cannot allow companies like Trans-West to bully, threaten and abuse the procurement practices just because they can,” he said. “It is not good for business, it is not good for our industry, and it is a waste of taxpayer’s funds.”
While supervisors did not resolve the conflict between the two companies that day, they agreed to give the county’s policy a second look.
Kern County’s local vendor preference policy states that as long as a company has a fixed office within the county, holds a required business license and employs one full-time or two part-time employees who live in the county, that company will be considered local.
When companies submit bids to the county for products and services, local vendors are given slightly preferential treatment.
If one local vendor submits a bid that is 5 percent higher than an outside bidder, the local company will be allowed to rebid. Also, when the county is ranking companies on “best value” for services that must be evaluated on more than just lowest price, local vendors are automatically moved up rankings by one position.
For the most part, county officials say the policy has worked well, and the county says its local vendor preference requirements are the strictest of all comparable counties.
“To date we’ve had no specific business problem pointed out with our local vendor preference,” County Administrative Officer Ryan Alsop said in a meeting in April. “We’re quite happy with it.”
But supervisors, concerned with the possibility that the policy was being taken advantage of, asked the CAO’s Office to consider changes to the policy.
Over the last three months, the county has solicited opinions from businesses and plans to make a presentation to the supervisors in several weeks.
“It’s all generally positive feedback,” Alsop said in a phone interview. “Nobody has sent us anything saying that they don’t like our local vendor preference.”
The county has uncovered no evidence of businesses gaming the system, Alsop said.
Nevertheless supervisors could choose to make changes.
Millions every year
Currently, 660 out of 7,570 businesses in Kern County are considered local vendors.
The top local vendor in Fiscal Year 2018-19, Kern Refuse Disposal Inc., received $14 million in a county contract last year.
In total, the county spent $119.6 million in contracts to local businesses over the same period.
The county purchased $3.6 million in services from Trans-West last fiscal year, according to data provided by the county, the second highest amount outside contract services.
Several corporations, like Home Depot and Dewey Pest Control, receive local vendor preference, which the county says fosters good long-term partnerships.
Any changes to the policy could result in businesses missing out on county contracts, potentially altering longstanding business relationships.
The Greater Bakersfield Chamber of Commerce recommended altering the policy to consider the ratio of local employees to a company’s overall workforce.
Chamber President and CEO Nick Ortiz said the ratio would not adversely impact small businesses or corporations that receive local vendor preference.
When the issue next comes before supervisors, they could take the suggestion, or keep the policy the way it is.
“I think the takeaway here is that our policy is quite effective,” Supervisor Zack Scrivner said in April after hearing an overview of the policy. “We do have a robust program if you look at the comparisons to other counties.”