What Is the Importance of Competitive Bidding?

Competitive bidding is an essential part of every school district's budgeting process. A choice of purchasing options allows a school district to locate the most cost-effective supplier. The district can make cost/quality comparisons and contract with those firms which best suit its needs. According to the state of Michigan, public school districts must acquire competitive bids for most purchases costing more than $13,557.34 At the same time, the selection of insurance administrators major expenditure in every district's budget - is a mandatory subject of collective bargaining, rather than a free-market business decision. And when a collective bargaining agent has a vested interest in a certain insurance administrator, the market is effectively closed. In almost every instance where competitive bidding has been successfully utilized, the public interest has been served because school districts have minimized expenditures and maximized quality of service. Without competitive bidding, as in the case of negotiated administration of insurance benefits, there is no guarantee that the chosen firm will perform up to any standards of efficiency. This is one of the main problems with MESSA.

Public school employees have always been concerned that a move to competitive bidding of their insurance would cause a reduction in their benefits. This is simply not true. School districts would still have to negotiate the level of benefits with the union, and the bidding process would be based upon the corresponding level of negotiated benefits. Any change in the amount of employee benefits would be conditional on the union's consent during the collective bargaining process. In any event, with the exception of the MEA, competitive bidding would function in the best interest of everyone involved, including public school employees.