HB1376
To Encourage State Agencies To Award A Portion Of State Contracts To Arkansas Businesses That Have Been In Operation For Less Than Five Years.
AI-Generated Summary
This bill, House Bill 1376, proposes to amend Arkansas law to encourage state agencies to award a portion of their contracts to new Arkansas businesses. Specifically, it directs the Office of State Procurement to encourage state agencies to award at least five percent (5%) of their contracts to businesses that meet two criteria. These businesses must have been in operation for less than five years. Additionally, their principal place of business must be located within the state of Arkansas. The bill defines 'state agency' according to existing statutory definitions. The primary goal is to foster the growth and development of emerging businesses within the state by providing them with opportunities to secure state contracts. This initiative aims to support new ventures and stimulate economic activity.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries of this bill would be new businesses located in Arkansas that have been in operation for less than five years. These businesses would gain an advantage in competing for state contracts, potentially leading to increased revenue, growth, and job creation. Arkansas's nascent business sector as a whole could also benefit from a more robust and supportive entrepreneurial ecosystem. State agencies, by complying with the encouragement to award contracts, would be supporting local economic development initiatives.
Who Might Suffer?
While the bill aims to encourage new business growth, established Arkansas businesses that have been in operation for more than five years might face increased competition for state contracts. If state agencies prioritize the new business set-aside, these longer-established firms may find it more challenging to secure the same volume of state work they previously enjoyed. Additionally, if the criteria for "principal place of business" are not clearly defined or strictly enforced, out-of-state businesses with minimal presence in Arkansas could potentially misrepresent their eligibility, indirectly impacting legitimate local businesses. The overall impact on larger, established businesses would depend on how significantly the 5% allocation influences the competitive landscape for all contracts.