Local First Policies: How Cities Prioritize Local Business — and What Douglas County Can Do Next

Why ‘Local First’ Matters More Than Ever

In towns and cities across the country, the phrase “buy local” has evolved into a powerful policy idea known as ‘Local First’. At its core, it’s about more than supporting mom-and-pop shops. It’s about strengthening local economies by ensuring that public funds—from municipal purchases to service contracts—stay within the communities that generated them.

For many municipalities, adopting a Local First procurement policy is a bold step toward economic resilience. But the path isn’t always simple. What happens when a local company can’t meet the technical demands of a major infrastructure project? What if state laws restrict favoritism in contracting? How do we balance inclusivity with competition, while still honoring the intention to keep taxpayer money circulating locally?

This blog post explores how municipalities—urban and rural, U.S. and international—are tackling these challenges. We’ll look at what’s working, where legal and logistical barriers exist, and what creative solutions are helping towns and counties strengthen their local business base through public policy.

And finally, we’ll ask: what would a ‘Local First’ policy look like in Douglas County, Colorado? Could we create a model that balances economic inclusion with government efficiency? That’s where we’re headed.

What Is a ‘Local First’ Policy?

A ‘Local First’ policy is a procurement or purchasing directive adopted by a city, town, county, or other municipal body that gives preference—either formally or informally—to businesses based within the local jurisdiction. This can apply to everything from janitorial services and office supplies to large-scale infrastructure contracts.

These policies aim to ensure that taxpayer money spent by local governments continues to circulate within the local economy. According to research by the Institute for Local Self-Reliance, dollars spent with local businesses are more likely to be re-spent on local wages, suppliers, and services, producing a stronger economic multiplier effect.

Local First policies can take a variety of forms:

• Formal Bid Preferences: Local businesses receive a percentage-based price advantage in public RFPs (e.g., a 5% bid preference).
• Scoring Systems: Vendors earn points for being local, hiring locally, or sourcing local goods.
• Mandatory Sourcing: Some policies require departments to first seek local providers before looking outward.
• Capacity-Building Add-Ons: Programs that pair Local First initiatives with training, outreach, and technical assistance for small local firms.

In short, Local First is not just a slogan—it’s a deliberate framework for keeping government dollars working inside the community. But implementing these frameworks requires thoughtful planning, legal foresight, and adaptability.

Success Stories: Municipalities Leading the Way

Across the U.S. and even internationally, a number of municipalities have implemented innovative ‘Local First’ strategies that offer useful lessons. Here’s a look at five standout examples and how they approached local preference in procurement.

Legal and Political Hurdles: Walking the Fine Line

While the benefits of Local First procurement are clear, implementing such policies can run into significant legal and political challenges—especially when local preference conflicts with broader state or federal laws. Understanding these roadblocks is essential to designing a policy that stands up to scrutiny.

Federal and State Procurement Laws

Many municipal procurement activities are governed by broader legal frameworks. Federal law generally prohibits local preference in federally funded projects, particularly when funds come through agencies like the U.S. Department of Transportation or Housing and Urban Development. This has led to tension in cities that wanted to prioritize local contractors but were constrained by federal grant rules. For example, under the FHWA’s guidance, any local hiring preference in federally funded highway contracts is considered impermissible unless explicitly authorized by law.

The Commerce Clause Challenge

The U.S. Constitution’s Commerce Clause has been used to strike down policies that excessively discriminate against out-of-state businesses. In White v. Massachusetts Council of Construction Employers (1983), the Supreme Court did allow local hiring preferences in some cases, but the ruling left many gray areas. Local governments must walk a careful line to avoid violating interstate commerce protections while still advocating for local economic development.

State Preemption: When the State Says No

In many states, municipalities are restricted from creating their own procurement rules due to state-level preemption. For instance, in Texas and Georgia, state legislatures have passed laws limiting the ability of cities to impose local business preferences, often under the banner of maintaining a “uniform business environment.” Even where local governments want to support their own economies, they may be overridden by state policy or political opposition.

Political Resistance and Economic Pushback

Local First policies can also face resistance from larger contractors, chambers of commerce, or political groups advocating for free-market principles. Critics argue that local preferences may reduce competition, increase costs, or even limit innovation. In some cases, cities have walked back proposed policies due to intense lobbying or fear of litigation.

Risk Mitigation Strategies

To stay compliant and avoid backlash, many successful municipalities have developed creative approaches such as:

• Using bonus scoring in RFP evaluations instead of hard bid preferences.
• Limiting preferences to non-federally funded contracts only.
• Developing pre-approved vendor registries that promote local providers without excluding others.
• Introducing capacity-building programs to ensure local businesses can meet technical specs and deadlines.

These adaptive strategies reflect a growing understanding: for Local First to work, it must be both legally defensible and economically competitive.

The Scoring Solution:
A Practical Path Forward for Local Preference

With legal limits and political pushback to outright local preference laws, many municipalities are moving toward a more flexible and defensible approach: weighted scoring systems. These systems allow cities and counties to reward local businesses during procurement processes—without explicitly excluding outside firms or violating competitive bidding rules.

How Weighted Scoring Works

Instead of awarding contracts based on lowest bid alone, governments evaluate proposals using a points-based rubric. Locality is one of many scoring criteria, alongside cost, qualifications, and past performance. For example:

Criteria	Max Points
Cost Competitiveness	30
Experience & Qualifications	25
Proximity / Local Business Status	20
Sustainability & Social Impact	15
References / Past Performance	10

Tiers of Local Preference

Some municipalities add nuance by using tiered scoring based on geographic closeness. This approach was pioneered in places like Boulder County, CO, where vendors receive additional points if they’re headquartered in the county, region, or state.

• Tier 1: Within the municipality (full points)
• Tier 2: Within the county (reduced points)
• Tier 3: Within the state (minimum points)

Capacity Checks and Rollover Options

What if no local business can satisfy the project requirements? Some governments solve this by adding a “capacity check” in the scoring process. If no qualified local bid scores above a minimum threshold (e.g., 70/100), then the contract opens to broader competition automatically. This protects quality while still encouraging local bids where possible.

Why Scoring Systems Work

This system is effective because it:

• Encourages competition on both price and community value
• Provides legal flexibility across federal, state, and local regulations
• Prevents favoritism while still recognizing geographic loyalty
• Supports small business growth through opportunity, not entitlement

Weighted scoring isn’t just a workaround—it’s a future-proof procurement framework. Cities like Cleveland and San Diego have used similar systems to boost local participation while maintaining integrity and competitiveness.

Measurable Impacts of Local First Policies

Successful Local First programs have translated policy into tangible economic benefits. This section summarizes hard data and real-world outcomes that demonstrate how local procurement strengthens communities.

Cleveland’s Local Contracting Results

Between 2010 and 2014, Cleveland increased the share of its contracts awarded to firms that were local and either small or minority/female-owned from **29% to 39%** of its \$147 million contracting portfolio. That represents a substantial shift toward inclusivity and economic inclusion in city‑sponsored work. (source)

San Diego’s SLBE Impact

San Diego’s Small Local Business Enterprise (SLBE) program nearly doubled annual city contract dollars to local small firms from **\$39 million to \$69 million** in just one year—while participation also grew, from 411 to 430 local firms. (source)

Phoenix’s Small Purchase Transformation

After instituting its Local Small Business Enterprise program for purchases under \$50,000, Phoenix saw local procurement jump from **approximately \$50,000 to over \$2.3 million** within a year—an increase of **46×** in local small-business spending. (source)

Preston Model in the U.K.

Through anchor‑institution procurement reform, Preston redirected an estimated **£74 million annually** into the city and **£200 million into the county economy**, dramatically increasing local SME participation and creating around **4,000 additional well‑paying jobs**. (source)

Economic Multiplier & Broader Benefits

Studies show that for every \$100 spent at a locally owned independent business, roughly **\$68** remains in the community—versus only \$43 when spent at non-local firms. That local multiplier effect means more jobs, tax revenue, and community stability. (source)

Though deeper impact studies (e.g. on new job growth or wage changes) remain limited, evidence suggests local procurement programs foster **innovation**, **firm revenue growth**, and **community resilience**, especially when combined with capacity-building and social value criteria. (source)

What Could Work in Douglas County, Colorado?

Douglas County has a vibrant local business ecosystem—but like many fast-growing communities, it faces increasing pressure from national chains, out-of-state contractors, and procurement processes that unintentionally exclude homegrown enterprises. The question isn’t whether a “Local First” policy is possible, but how to implement one that’s fair, legally sound, and results-driven.

1. A Smart, Weighted Scoring System

Rather than requiring contracts go exclusively to local vendors, Douglas County could implement a scoring matrix that awards points based on:

• Proximity to project site (e.g. within county, within 50 miles, within state)
• Ownership type (local, minority-owned, veteran-owned, etc.)
• Demonstrated local reinvestment (local jobs, local supply chain)
• Environmental footprint or mileage reduction via local sourcing
• Prior project success and local community involvement

This model mirrors frameworks used in Cleveland and San Diego to encourage, but not mandate, local selection.

2. Local Business Registry + RFP Alerts

Douglas County could establish a voluntary Local Vendor Registry for businesses headquartered in the county. Firms on the list could receive:

• Exclusive advance notice of small-dollar RFPs
• Reduced bid bonding requirements
• Quarterly training on public procurement readiness

Portland’s “Buy Local” outreach paired vendor training with registration to improve small business competitiveness. (source)

3. Tiered Contracting with a “Local First” Clause

In larger or specialized contracts, local vendors could be given:

• First right of refusal for subcontracting
• Bonus points if teaming with local businesses
• Incentives for offering apprenticeships to local youth

These contractual structures reduce legal exposure while ensuring local firms benefit from public projects—even when they aren’t the prime bidder.

4. Community Benefit Agreements (CBAs)

CBAs are legally enforceable agreements between public entities and contractors that define specific community outcomes. For Douglas County, these could include:

• Minimum % of budget spent locally
• Guaranteed job creation in underserved zip codes
• Free public use of facilities or donated services

The Preston Model in the UK built this into their contracts, catalyzing local reinvestment and social outcomes.

5. Adopt a “Douglas County First” Resolution

Like hundreds of U.S. cities and counties, Douglas County municipalities can pass a symbolic yet practical resolution declaring their commitment to:

• Supporting local business first when feasible
• Publishing annual procurement reports by vendor location
• Forming an advisory group of local entrepreneurs to monitor policy effectiveness

While not a mandate, this signals to staff, vendors, and residents that spending local isn’t just encouraged—it’s prioritized.

With over 40,000 small businesses in the Denver metro and many of them based in Douglas County, there’s an urgent opportunity to keep tax dollars circulating locally. The solution isn’t one-size-fits-all—it’s a well-designed, transparent, and inclusive framework that rewards community-centered businesses.

A Local Legacy Worth Building

Local businesses aren’t just economic engines—they’re woven into the cultural, civic, and social fabric of Douglas County. From sponsoring youth sports to hiring the neighbor’s kid for summer work, they keep our communities vibrant, accountable, and deeply connected. But without intentional procurement strategies that prioritize these businesses, the scale tips—slowly and silently—toward outside interests that may never reinvest here again.

Other municipalities across the U.S. and internationally have proven that local-first policies don’t have to be radical or restrictive. They can be precise, equitable, and legally sound. The key is leadership—elected officials, economic development directors, and business advocates willing to ask tough questions about where public money goes, and what kind of community it’s building.

If Douglas County wants to remain a place where local business thrives—not just survives—it’s time to act. That means starting small: a local vendor database, a scoring system that gives hometown businesses a fair shot, and transparent reporting that shows residents where their dollars go.

These aren’t just procurement decisions—they’re legacy decisions.

Let’s build a county where doing business locally isn’t the exception. It’s the rule. And let’s make that rule not through mandates, but through momentum, creativity, and the shared belief that Douglas County’s best days are still built by those who call it home.