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Local Purchasing Preferences - Indiana

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Indiana grants a 15% preference to small, independent businesses, as defined below, and gives all other local businesses a preference of 1-5%, depending on the size of the contract. 

Indiana Code, Title 5, Article 22, Chapter 15, § 5-22-15-23

A preference of 15% is awarded to an Indiana small business. Small business is defined as a business that is independently owned and operated; is not dominant in its field of operation; and has the following criteria:

(1) A wholesale business is not a small business if its annual sales for its most recently completed fiscal year exceed $4,000,000.

(2) A construction business is not a small business if its average annual receipts for the preceding three fiscal years exceed $4,000,000.

(3) A retail business or business selling services is not a small business if its annual sales and receipts exceed $500,000.

(4) A manufacturing business is not a small business if it employs more than 100 persons. (Burns Indiana Code, §5-22-14-3)

Indiana Code Title 4, Article 13, Chapter 6 §2.7 (See IC5-15-20 below)

Preference for Indiana businesses with principal place of business located in Indiana, that pays a majority of its payroll (in dollar volume) to residents, and has a substantial positive economic impact on Indiana (c) There are the following price preferences for a contractor that is an Indiana business:

(1) Five percent (5%) for a contract expected by the division to be less than five hundred thousand dollars ($500,000).

(2) Three percent (3%) for a contract expected by the division to be at least five hundred thousand dollars ($500,000) but less than one million dollars ($1,000,000).

(3) One percent (1%) for a contract expected by the division to be at least one million dollars ($1,000,000).

The division shall award a contract to the lowest responsive and responsible contractor, regardless of the preference provided in this section, if:

(1) the contractor is an Indiana contractor; or
(2) the contractor is a contractor from a state bordering Indiana and the contractor's home state

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