LINCOLN, Neb. (AP) -- Dewayne Docken figured his data entry company had a good shot at a contract offered last year by the Nebraska Game and Parks Commission.
But Docken, president of Priority Data, was left fuming when the south Omaha-based company lost the contract to an out-of-state business that underbid him by less than $20.
"To me, it seemed ludicrous," Docken said. "It was extremely frustrating. We have Nebraska residents working for us, paying state income taxes. And lo and behold, the project goes out of state."
Nebraska lawmakers are expected to debate the issue next year when Omaha Sen. Heath Mello introduces a bill he's drafted that is similar to "Buy America" legislation he proposed in the 2012 session. Mello said the proposal seeks to keep jobs in the state.
The Legislature's Government, Military and Veterans Affairs Committee will hold hearings on Friday to examine the issue and get a sense of how often state agencies award work to out-of-state companies.
Mello said he called for the hearings because he wants to know the percentage of state contracts that go to Nebraska-based businesses, as well as the amount of goods and services bought by agencies that are produced in-state. He thinks the state isn't following current preference laws that are designed to protect Nebraska-based businesses from unfair competition.
"We're trying to keep as many state dollars here as possible, and recycle them back through Nebraska's economy," he said.
Mello said Nebraska awards $2 billion in contracts a year for goods and services, but it's unclear how much comes from in-state sources.
Current state law gives preference to "resident bidder" companies that are registered with the Secretary of State's office to do business in Nebraska, even if their operations are based elsewhere.
Nebraska gives preference to a "resident bidder" company only if two conditions apply: It's vying for a state contract against a company that's not registered in Nebraska, and it's disadvantaged by the bidding laws on the home turf of the out-of-state business.
Priority Data was founded in Omaha in 1979. The data-entry firm takes customer or donor information supplied by businesses, charities and governments, and converts it into electronic spreadsheets that can be used more easily.
A handful of states give preference to local companies, and Docken said he sees it when Priority Data vies for government work those states.
Nebraska saves taxpayer money by awarding contracts to the lowest responsible bidder, but Docken argued that Nebraska-based companies contribute more directly to the state's economy and tax base.
Mello's "Buy American" bill introduced in the last legislative session would have mandated that state contracts for public works projects contain a provision requiring American-made goods. The bill, which died in committee in April, included an exception if American-made goods weren't available in sufficient quantities or if requiring them would increase a project's cost by more than 10 percent.
The Department of Administrative Services, which handles state contracts, opposed the "Buy American" bill on grounds that it could limit competition and increase the cost for state taxpayers. Shrinking the market could also lead to inferior products and services, said Bo Botelho, the agency's general counsel.
"Those states could say, 'Well, Nebraska gives preference to their folks, so we're going to give it to our folks,'" Botelho said. "It could impede the ability of Nebraska companies to do business outside of Nebraska."
Botelho said his department does not track the amount of goods and services produced in Nebraska compared with other states, because the law doesn't require it.
The hearing on Friday will also examine a government spending website maintained by the Nebraska State Treasurer's office. Mello said the site could be more detailed to give bidders a better sense of what the state has spent on past contracts.