NORTH KINGSTOWN, R.I. (Dec. 1, 2009 - WPRI)—The state of Rhode Island chooses an out of state company over a Rhode Island one for a multi-million dollar food contract. The move will mean lost tax revenue for the state and could mean, more Rhode Islanders out of work.
The freezer at All American Foods in North Kingstown is 5 below zero. But it's the state of Rhode Island that gave the company the cold shoulder when it awarded a government contract to an out-of-state company and it could mean more workers in the unemployment line.
All American Foods in North Kingstown employs about 100 people. Their massive warehouse is stocked with food supplies for restaurants, businesses, and at one time the state prison.
Campagnone says All American Foods may need to lay-off 4 employees after the state awarded a multi-million dollar bid to a food distributor in Connecticut.
"It's lost income, its loss of buying power, its loss of tax base," said Campagnone.
Mark Hayward of the U.S. Small Business Administration says the state needs to try and think local when awarding government contracts.
"If the small business is here in Rhode Island and the employees are here in RI, they're actually producing revenues to the state of RI through income tax revenue and also disposable income," said Hayward.
Campagnone wrote to every state senator and representative about what happened, and last week, legislators grilled Administration Director Gary Sasse about the state's purchasing process.
"The award was made to the lowest responsible bidder," said Sasse.
Sasse says Rhode Island is one of only 11 states in the country that does not consider location as a tie breaker when awarding contracts to small businesses.
"It's something we're looking at, but there are also reciprocal purchasing laws, so if there is tie breaker in RI, there would have to be one in Connecticut or Massachusetts," said Sasse.
"By awarding this bid, they're just not doing the work anymore," said Campagnone.
In this case, Campagnone says the state failed to do its homework. He said his bid was actually lower. And he says the contract would have expanded All American Foods business by five million dollars; meaning more jobs for Rhode Islanders, and more tax revenue for the state.
"It's not easy doing business with the state, it really isn't," said Campagnone.
Good news for the holidays. Campagnone says, at least for now, they haven't had to lay-off any workers.Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.