TO: Mayor and City Council
THROUGH: Krishna Namburi, City Manager
FROM: Josh Eggleston, Chief Financial Officer
SUBJECT:
title
Update on the Local Bidder Pilot Program
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
Result Area(s): Good Governance
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SUMMARY:
summary
The City’s Local Bidder Pilot Program, which was effective beginning November 17, 2025 required at least one quote from a local business for informal purchases up to $100,000 with the aim of supporting local vendors. The short time frame and fluctuations in purchasing between time periods create a challenge when trying to evaluate the pilot program. The data shows comparable year over year use of local bidders when making these types of purchases. However, there was additional time spent on identifying a local vendor for the pilot program. This report provides further information about the pilot program and potential next steps for City Council consideration.
Staff are continuing the pilot program through at least the end of calendar year 2026 to have a better year over year comparison to evaluate the effectiveness.
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ISSUE:
Information only.
RECOMMENDATION:
recommendation
Information only.
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FACTS AND FINDINGS:
Effective November 17, 2025, the City of Salem implemented the Local Bidder Policy “Pilot Program” to support local businesses in the procurement of goods and services. This policy applies to informal purchases up to $100,000 that are not subject to formal procurement processes. A “local bidder” is defined as a business with a physical presence within Salem city limits and compliance with all applicable regulations.
Departments are required to include at least one quote from a local bidder when obtaining the standard three quotes for informal projects. For purchases under $5,000, local vendors should be used whenever pricing is comparable or lower, factoring in processing and travel time. Staff will look for local bidders using resources such as web searches and Chamber of Commerce listings, and document efforts on bid tabulation sheets, including the physical address of local bidders or steps taken if none are found. Time spent on this process will be tracked during the pilot phase.
The City will maintain records of quotes and procurement outcomes to evaluate policy effectiveness after three months. Amendments may follow based on stakeholder feedback and results.
This is the report back to Council showing a comparison of year-over-year changes in City purchasing processes and the impacts to Salem vendors of this pilot program.
Below is an analysis of City purchasing activity with local vendors in Salem. This reflects purchase order activity for the following time periods:
• Dec 1, 2024 - Feb 28, 2025 (FY 2025, without the Local Bidder Policy)
• Dec 1, 2025 - Feb 28, 2026 (FY 2026, with the Local Bidder Policy)
Overall and for both time periods, Salem businesses represented the most transactions with Portland businesses the second highest. The Salem-specific data has been broken down into two groups for ease of understanding. The first group is for purchase orders over $5,000 which require a bidding process to occur prior to the purchase. The second group is for purchase orders under $5,000 which represent the majority of purchases citywide and do not require bids.
In the over $5,000 category, the total amount increased year-over-year by $164,572 reflecting over double the number of larger purchases in FY 2026 compared with FY 2025. Citywide there was a corresponding increase in overall purchases in this category for the same time period. There were also several vehicle purchases that impacted the results. A longer time period is needed to normalize the data for an effective year over year comparison. The average dollar amount for the two time periods is similar.
When preparing bids for informal projects during the pilot program, staff spent an additional thirty (30) minutes to an hour researching local companies. The research process included reviewing available services and confirming alignment with project specifications.
Activity for purchase orders under $5,000 was consistent during the two time periods with a similar number and dollar amount of purchase orders.
Overall Findings
1. After reviewing the financial activity for both years, preliminary data shows that City buyers have already been considering local options when available and cost effective.
2. Some local vendors have reached out with concerns about not being awarded bids after being asked to bid due to not having the lowest price.
3. Additional time is needed to evaluate the program for effectiveness.
Staff will return after completion of a year of the pilot program for a full report and recommendation on continuation of the program.
BACKGROUND:
Shawna Self, NIGP-CPP, CPPB
Contracts and Procurement Manager
Attachments:
1. None.