Those seeking government contracts in the state of New Mexico will need to look closer at a bill that was recently signed by Governor Susana Martinez. A measure is now in effect where businesses based in New Mexico will maintain an advantage over others that are based out of state when it comes to bidding on government contracts.

The clear goal here is to help the local economy of New Mexico which has had it struggles in recent years. Since local businesses will be given preference with state government contracts, the jobs created by the measure will remain within the state. The easier it becomes for local businesses to tap into the revenue generated by a government contract, the easier it becomes for the local business to grow. Again, this can present the basis for creating and providing jobs.

Previous regulations in the state had provisions in which out of state businesses could qualify for contracts even though the preference within the statute was intended to promote local New Mexico based businesses. Most commonly, this was evident in state financed construction projects.

Generally, state contracts are awarded to those that offer the lowest competitive bid. With the new contract preference component in place, any bid that is put forth by a qualified New Mexico business will receive a 5% deduction on the actual bid amount that was submitted. This does not automatically give the New Mexico business the most competitive bid but it certainly helps the local business become more competitive and attractive in the bidding arena.

Another amendment has been made to pre-existing law. In the past, contracting preference rules did not apply to any bids that were more than $5 million. This is no longer the case under the new measure. As such, more doors are open to local businesses to take advantage of the new regulations. A ripple effect may be derived here as the local residents may be able to equally benefit from the new rules as well.

A common problem that necessitated making such changes to the rules and the statutes was the fact that out of state businesses were employing “shell companies” intended to present themselves as local entities when, in fact, they were not. This was a dubious means in which the out of state company could tap into contracts that should have gone to local ones. This loophole has been closed and now those companies that are based out of state will have to compete in a fairer and more honest manner.

To ensure the credibility of such an approach, contractors much be certified as “resident contractors” and the company has to prove it owned or leased property in New Mexico for about five years. Taxes must have been paid to the state. The company must also have a minimum of three full-time employees that live in New Mexico.

The Governor was quick to point out that the goal of closing this loophole was to serve the prime purpose the measure as a whole is intended to: provide revenue streams to local businesses with the intention of spurring local job hiring within the state of New Mexico. Such an approach is a logical one since it does not make sense for one state to boost the economy of another state at its own expense.