SD companies sue state over $5M Manpower contract

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SIOUX FALLS(AP) — Three Sioux Falls staffing companies are suing over a $5 million state contract awarded to a national employee recruiting firm to try to draw new workers to South Dakota.

The lawsuit alleges that the governor's office lacks the authority under the state or U.S. constitutions to enter into a contract that gives one company an exclusive franchise within private industry. It also alleges the state broke competitive bidding laws, according to media reports.

"Under the contract, the state not only channels private business to use Manpower, but also pays $49,000 a month for that privilege," according to the complaint filed in state court in Pierre by Employment Edge, Careers Unlimited Staffing and Reagan Enterprises. "The inevitable effect is to competitively cripple employee recruiting firms within and without South Dakota who get no monthly operating subsidy."

The contract, which took effect Monday, calls for Milwaukee-based Manpower Inc. to recruit 1,000 out-of-state workers to South Dakota to fill needs in financial services, information technology, engineering and manufacturing.

Tony Venhuizen, a spokesman for Gov. Dennis Daugaard, told the newspaper that the contract process, which drew six proposals, followed the law and that the worker recruitment program is a cost-effective way to attract new people to the state.

"We had a number of proposals and Manpower was the one we awarded the contract," he said. "It's unfortunate those parties chose to bring this lawsuit."

Plaintiffs' attorney Steve Sanford told The Associated Press on Friday that none of his clients was aware that the state was soliciting bids for the contract. They want the Manpower contract nullified but are not seeking a specific ruling on how the worker recruitment contract should be handled.

"There are probably a number of remedies," Sanford said.

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