‘It’s not fair’: Milo man loses contract to supply state with flags

Posted July 03, 2009, at 9:10 p.m.
Last modified Jan. 30, 2011, at 12:12 p.m.

CORINTH, Maine — Nobody has ever questioned Walter Lougee’s patriotism. The Milo man’s life is surrounded by the red, white and blue symbols of America, all made in the U.S.A.

To help supplement his retirement income over the years, Lougee, 67, has operated a business called World of Flags USA, selling American and state of Maine flags along with an assortment of sports-related items from his Corinth store and his home in Milo.

Until this year, one of his biggest customers for flags was the state government. He said this week that his bids to supply the flags have been accepted for about four years because they were the lowest ones submitted. Over those years, he never increased his bid even though his business costs had increased, and he always tossed in free shipping, he said.

Expecting that he would once again be awarded the contract for 144 American flags and a similar number of state of Maine flags, Lougee instead received what he called a “slap in the face.”

After the bids were reviewed late last year, Lougee learned that a Pennsylvania company had received the contract. The out-of-state company had submitted a bid on the American flags that was about $30 less than his total bid, he said he was told. The state’s decision has angered him ever since.

“I wouldn’t have minded if I had been beaten out by another company in the state of Maine, but I think when Maine leaves the state … it’s just killing Maine businesses,” Lougee said.

After all, Lougee noted, he has paid and continues to pay an assortment of Maine taxes, including the sales tax, unlike the Pennsylvania firm.

The out-of-state company also isn’t likely to support Maine organizations and nonprofits the way Lougee has over the years, he said. His generosity is quite clear from the letters and cards displayed on his walls at his businesses in Corinth and Milo that thank him for his donations of flags, some of which have flown over military installations in Iraq.

The state has a formal request-for-proposals process to make sure everyone who makes a bid is treated fairly, David Farmer, Gov. John Baldacci’s spokesman, said Friday. If the service and quality are equal, then the lower bid price is awarded, he said. “We do that as a way of saving taxpayer money,” he said.

Lougee recognizes that but believes the state should have a 5 percent buffer as some states do, so when bid amounts are close it would give Maine firms a better chance to compete.

The problem with that, Farmer said, is that other states would, in turn, impose a buffer that would affect Maine firms bidding on out-of-state projects or goods. The state exports a lot more than it imports, he said. “The RFP process is intended to protect both the people who are bidding to make sure they are treated fairly, but also to protect the taxpayer — to make sure that when the state is purchasing something, that the taxpayer is getting the best deal possible,” Farmer said.

Rep. Doug Thomas, R-Ripley, said he attempted to get a buffer law on the books in January but his bill was killed for lack of support. “I thought it made sense,” he said, but added that he was told other states would retaliate if such a law were on the books.

“It bothers me that we do so many things in Augusta that drive up the cost of doing business in Maine and then give our business to out-of-state companies,” Thomas said Thursday. He said a lot of state government business is going out of state, but he doubted that any agency kept track of just how much.

Thomas said that according to the last figures he had received from the Maine Development Foundation, it costs almost 11 percent more to do business in Maine than it does in the rest of the country. “So how does a Maine business compete?” he asked.

“I knew there was a chance that my bill wouldn’t become law, but [the issue] needs to be addressed, people need to be made aware of it,” Thomas said. “The volume of business that [Lougee] was doing with the state helped him buy all of his flags cheaper so that he could sell flags to you and [me] for less, because he was getting the volume discount. When he lost that state business, he lost that volume discount.”

Lougee said the loss of the state contract will have a big effect on his business. It will mean fewer hours for his part-time employee — his daughter — and fewer donations and advertisements in fundraising pamphlets and programs. “I just don’t understand it,” he said of the state’s policy.

Although he may be in business for only a few more years, Lougee said, he wants to make conditions better for other Maine businesses. He wondered aloud where the state buys its paper towels, pens and pencils, office supplies and other goods, and suggested that Maine businesses could be losing the contracts on these products as well. “It’s not right, it’s not fair,” he said.

“The state of Maine has got to do something,” Lougee said. “I may be in the flag business for another three to four years, but I hope this wakes up the state about doing more business with Maine businesses.”

dianabdn@myfairpoint.net

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