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File Number: 13-630 <br />Current Policy <br />Both the existing City ordinance and standard procedures place an emphasis on purchasing <br />from local San Leandro businesses whenever possible. A recent staff analysis found that, out <br />of 386 currently open purchase orders, 89 were issued to companies in San Leandro and an <br />additional 82 were issued to companies elsewhere in Alameda County. <br />Currently, the San Leandro Municipal Code (Title 1, Chapter 6, Article 2, Section 225) reads <br />as follows: <br />In comparing bids for purchases of equipment, materials or supplies requiring an <br />expenditure not in excess of Twenty -Five Thousand Dollars ($25,000.00), and solely for <br />the purpose of calculating the lowest bid, the following procedure shall be employed: A <br />sum equal to five percent (5%) of the total bid, or of the base bid and each alternate, <br />shall be deducted from the amount of the total bid, or the base bid and each alternate, <br />respectively, of the bid of a supplier whose principal place of business is located within <br />the City of San Leandro. If, after performing the above calculation, there is a tie for the <br />lowest bid, the supplier whose principal place of business is located within the City of <br />San Leandro shall be deemed the lowest bid for the purposes of Section 1-6-220, <br />subject to the qualifications concerning responsibility contained therein. <br />The current ordinance is limited to contracts of no more than $25,000. Although the ordinance <br />effectively encourages purchasing from local businesses, it does not directly impact larger <br />contracts, including capital improvement projects, major consulting agreements, and <br />large-scale equipment purchases. <br />Analysis and Policy Proposal <br />Unlike the current City ordinance which is limited to contracts under $25,000, the proposed <br />ordinance applies to a much broader range of City contracts: <br />(1) Construction and Public Works Contracts valued at or above one hundred thousand <br />dollars ($100,000.00); <br />(2) Professional and Non -Professional Service Contracts valued at or above twenty-five <br />thousand dollars ($25,000.00); <br />(3) Contracts for the procurement of goods, materials, equipment, furnishings or supplies <br />valued at or above five thousand dollars ($5,000.00). <br />The proposed ordinance has two distinct means of encouraging local participation in City <br />contracts; a Local Business Preference Rating Incentive and a Local Business Participation <br />Goal. <br />Local Business Preference Rating Incentive <br />The Local Business Preference Rating Incentive includes the following provisions: <br />a) Solely for the purpose of calculating the lowest bid or proposal, ten percent (10%) shall <br />be deducted from the total bid amount submitted by a contractor or supplier whose <br />principal place of business is located within the City of San Leandro. <br />City of San Leandro Page 2 Printed on 12123/2013 <br />