City of Los Angeles Small, Local Business Program Historical Summary and Program Milestones

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1 City of Los Angeles Small, Local Program Historical Summary and Program Milestones v June 1, 1980 October 13, 2000 August 5, 2001 OARS Memo to City Council, Government Efficiency Committee Small, Local Preference Program Amended (Ord. No. 174,048) 5% preference granted to qualified SLB's with bid or proposal of lowest and best responsible bidder or (non-slb) proposer. Suoolie;r or contractor which qualifies as a "Small, Local " will be granted 5% on contracts of $ or Recommending changes to City of Los Angeles Small, Local Preference Program to enhance opportunities for small, local businesses to contract with the City. Author of recommended changes is Mayor's Office of Economic Development, Los Angeles Opportunities for Procurement Services (LAOPS). Amendments to Sections through 10.30: 1) Raise bid preference rate from 5% to 1 O%. 2) Raise contract ceiling from $35,000 to $100,000. 3) Defme as small business a firm with annual gross receipts less than $3 million. OARS to work with affected departments to develop standard SLB app!lcation and centralized 10% preference rate established. $100,000 contract ceiling established. Large untapped pool of potential business for City contracts, increased competition, save taxpayers money, greater cost of doing business to contract with the City. $3 million annual gross receipt size standard established. Bidding timelines established (SLB must be certified no later than 5 days prior to bid/proposal due date). BTRC requirement, business principal address in Los Angeles County requirement, and annual certification renewal requirement remain unchanged. Department of Public Works, BCA/OCC Centralized Certification Administration Section selected as SLB processing agency. Mayor's Office of Economic Development to submit annual report to City Council. Report encompasses contracts awarded/$ amounts to SLB firms and recommendations for July 1, 2008 SLB renewal period changed to 2 years due to staff budget cutbacks. 802 certified SLB firms as of 6/18/2010 M:$CERTF\CCA Special ProjectsiSLB Program History & Highlights.doc 6/22/2010 oate.---~~!::::. Submi!'.ed in "1j?b 5 1 Council Fiie No: 0 '"'O'f/7: tem No.:_ A 3 jl;; Deputy:_:~~~

2 City of Los Angeles Small local Certification ssues and Recommendations Questions Answers & Recommendations. Current Definition: "Small" means a business concern that makes no more than $3.0M in the past 1. Define "Small" fiscal year. Current Definition: "Local" means a business concern with its principal office located within the Los 2. Define "Local" Angeles County 3. Define "Preference for Small " 4. What is the contracting universe? Any supplier or contractor who qualifies as "Small Local " and is a responsible bidder shall be granted a preference for contracts of $1 OOK or less, if the lowest bidder is non-qualified as a Small Local and 10% of the latter's bid is taken from the qualified Small Local. Primarily commodities and construction projects under $1 OOK. l 5. How much did the City spend in FY 2009/1 0? Unavailable at this time 6. Of the City's spend, how much went toward under $1 OOK? $25.7M awarded to 168 SLB certified firms out of 802 total certified firms. [FY total no. of contracts= 2031; Avg. value per contract= $12.7K] (based on data from DWP, LAWA, Harbor and GSD) 7. Do we want to stay at $1 OOK or go to $500K or $1.0M? What dollar threshold exists in other agencies? Should we increase our threshold? See attached Summary of Certification Programs 8. Do we keep our current "Small" definition? See attached Summary of Certification Programs. To streamline the certification process, the current ordinance requires the applicant to submit the previous year's income tax return and their City of Los Angeles Tax Registration Certificate. To verify a principal office, we can require the applicant to (a) submit a signed affidavit that this 9. How can the City,verify a principal office? location is where the books and records are kept, where management work and where the majority of the activities relative to the business are performed and/or transacted, (b) perform random site visits to that office location; and (c) add a regulation wherein firms found to have submitted fraudulent information will lose their certification for 2-5 years ~ M:\$CERTF\CCA Special Projects\SLB Questions and Answers.doc 6/22/2010

3 Summary of Certification Programs n California Local Small State SBE Certification & Location in L.A. County $14 million and 100 or less employees 5% Bid preference on goods & services contracts $5,000 and up (not to exceed $50,000 cost to the County) County of Los Angeles Community Enterprise (CBE) Disadvantaged Enterprise Disabled Veteran Entereprise or 51% Owned & Controlled by Minority NA Outreach, Visibility

4 City and County of San Francisco Certification Qualifications 1 Small/ SBA Location in City of SF & Size Micro Small PUC- LBE Standard Location in SFPUC Water System Area & Size Standard Small= $ million Micro= $ million SBA = $ million (varies by industry) Small= $ million Micro= $ million Benefit Contract specific subcontracting goals, Bid discount for Micro & Small LBEs: i 0% on contracts up to $10 million, Bid discount for SBA LBEs: 2% on contracts $400,000- $20 million, Contracts set aside for Micro LBEs (construction contracts under $400,000 and other r.nntr~d~l under $100,000). Minority/Women LBE that is 51% Owned & Controlled by Minority/Women Tracking Purposes Only Local Location in the City of Enterprise (LBE) Oakland 20% minimum LBE/SLBE subcontracting participation on l l construction contracts over $100,000 and professional Small Local Enterprise (SLBE) Headquarters in the City of Oakland & 30% of SBA Size Standards services contracts over $50,000. Pr<3ference points may be awarded for additional LBE/SLBE participation. 6/21/iO 2

5 Port of Long Beach SBA- varies by industry, c --,---, up to $33.5 million 1-'----'---'---' \----'-.!...-'-'-'---"'-C..-'-""---'--\ Contract-specific goals; Agencywide overall25% SBE goal $3.5 million or 25 or less with at least 5% VSBE Los Angeles Small Enterprise (SSE) Unified School. District D1sabled Veteran 151%0wned & Controlled by Enterprise (DVBE) Serv1ce Disabled Veteran(s) SBA- varies by industry, up to $33.5 million 25% SSE participation goals on most contracts Agencywide overall 3% DVBE contracting goal 6/21/10 3