City purchasing director reports modest use of Buy American preference, cites job retention gains

The Finance & Personnel Committee heard a report from City Purchasing Director Rhonda Kelsey on the Buy American Bid Incentive (Milwaukee Code ch. 310), which provides a three-tier preference (Milwaukee, Milwaukee County, U.S.) for qualifying commodity bids.

Kelsey said the incentive applies to formal competitive commodity bids (typically over $50,000) and requires 51% U.S.-made components to qualify; awards to Buy American bidders are allowed only if the Buy American bid does not exceed the lowest responsible bid by more than 12% (roughly $27–28,000, adjusted annually by 1%). She noted exclusions for high-ticket raw-material purchases (rock salt, gravel, petroleum, etc.) and other situations where domestic products are not reasonably available.

Over the 2022–2024 period, the purchasing office observed generally a 50/50 split between Buy American and non-Buy American bidders in applicable solicitations; the incentive was used in a small number of awards (roughly 15 awards since 2014) and has an estimated fiscal impact of about $15,000 per year. Kelsey also said the program tracks job retention/creation and reported roughly 258 full-time jobs retained tied to contracts executed under the incentive over the program’s history.

Committee members asked technical questions about when the code’s 1% annual adjustment applies and how the 12% threshold works; Kelsey said the city clerk’s office publishes the 1% increase each March 1 and that the bid preference is included in solicitation documents when applicable. The committee placed the purchasing report on file.