Auditors say gov’t. could boost in-state hiring

NM vendors capable of filling contracts

Government agencies in New Mexico have the potential to boost the local economy and create thousands of jobs by hiring in-state companies to do more of their work, state auditors say.

Over a recent two-year period, auditors say in a new report, about 23 percent of the money spent on government contracts in New Mexico went to out-ofstate vendors, or about $1.5 billion out of the total $6.5 billion in contracts. And the figure climbs even higher — to about 32 percent — when national companies that have a local presence are included.

State Auditor Tim Keller said there are good reasons in many cases to hire out-of-state companies. But there are some industries — information technology is one — where local vendors appear to be capable of handling more of the work, he said.

“Whether we like it or not,” Keller said, “government spending is a huge chunk of our economy.”

He briefed procurement officers from around the state about the findings on Thursday.

The share of work handled locally varies by industry, he said. In construction, for example, almost all of the contracts go to local companies.

But in-state vendors tend to lose out when government agencies bypass the competitive bidding process and issue emergency or “sole source” contracts, Keller said.

And some industries seem ripe for more local involvement, he said. Local companies can build websites and handle plenty of “short-term” information technology tasks, he said, but 83 percent of information technology work goes to national and out-of-state companies.

Pushing that figure down about 20 percentage points could create 150 to 241 local jobs, according to his office’s estimates.

Other changes like that could help “transform New Mexico’s economy,” Keller said.

The report, he said, also points to some business opportunities for local entrepreneurs. Outside companies dominate the contracts to run private prisons and provide certain informationtechnology work for schools because there aren’t local vendors who do that particular work, auditors said Thursday.

The State Auditor’s Office offered a variety of suggestions for boosting the number of local companies handling contract work for state and local governments in New Mexico. Limiting the use of no-bid contracts and allowing local vendors to apply would help, the report said.

Some cities in other parts of the country — San Diego and Phoenix, for example — solicit heavily from local companies and sometimes direct a minimum percentage of contracts to local vendors.