The San Clemente City Council unanimously voted at its meeting on Tuesday, May 2, to introduce an ordinance to provide local small businesses bidding on city contracts with a 7% preference.
The item came back to the council after it directed staff on April 4 to draft the code amendment, with now-former Councilmember Gene James leading the charge.
In addition to allowing qualifying businesses to bid less on contracts, the preference would expand discounts on supplies, equipment, materials, construction and professional services to the same 7% figure from the previous 3%. All preferences would come with a maximum financial value of $150,000.
“If the total combined bid amount submitted by a responsible Local Vendor is not greater than one hundred seven percent (107%) of the apparent low bid and all other rating criteria is considered to be equal, preference shall be given to the responsible Local Vendor,” the ordinance states regarding open bids.
Local businesses would also receive a 7% preference on all sealed bids, although the council can waive the procurement policy at any time if it determines issuing a preference would not be in the city’s best interest.
Tuesday night’s vote came without discussion on the public hearing item.
After receiving direction from the council last month, city staff added stipulations to the ordinance. One stipulation would limit the city to apply the policy only in situations where it is fully funding the contract with its own coffers and without state or federal funds.
Qualifying businesses must possess a valid City of San Clemente business license in good standing, must be located within the city’s boundaries, and must meet the criteria of a “small business” as defined in California’s Government Code and Public Contract Code. Local subcontractors would be ineligible for the preference.
The city could withhold or recoup funds equaling the value of a preference from a business if the entity is found not to qualify as a local business for more than 60 days during a contract or at the time of the contract’s approval. It could also void the contract overall.
The ordinance will come back for formal adoption upon a second reading at a future council meeting.