Dive Brief:
- When states and/or local governments offer companies financial inducements to locate in their state or community, it's common for the deal to include a requirement to hire locally for constructing the facilities involved, and that becomes the contractor's problem.
- Recruiting and vetting local subcontractors chews up time and money, contractors say, and there may be more delays if enough local hiring to meet requirements proves impossible and the contractor has to get a waiver for the requirement.
- Problems can arise when the client hires a single contractor for a task and does not understand why the task may be broken down into smaller pieces so the contractor can find qualified local capability.
Dive Insight:
The goal of wanting job creation to have the greatest local benefit possible is understandable and helps justify spending public money – or, often, foregoing public revenue – to land the project. The requirement for local labor is made even tougher by a growing shortage of skilled workers.