Jul 29, 2014
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Local Contractors Given 5 Percent Advantage Over Non-Locals

The move is an effort to level the playing field due to the high cost of doing business in Santa Clara County.

Local Contractors Given 5 Percent Advantage Over Non-Locals
(The following information release was received by Patch from the Santa Clara Valley Water District offices.)

Local businesses to receive preference in contracting

SAN JOSE, CA – On Tuesday, Dec. 10, the Santa Clara Valley Water District Board of Directors unanimously approved an ordinance to establish a local business preference in some types of procurement of goods and non-professional services. The preference will essentially give local businesses a 5 percent advantage over non-local businesses.

A staff analysis presented to the board concluded that local businesses are at a competitive disadvantage due to the high cost of doing business in Santa Clara County.

According to the analysis, the new policy serves the public interest by encouraging businesses to locate and remain in the jurisdiction through the provision of a minimal good faith preference to local businesses.

During the board’s discussion, Director Barbara Keegan commented that it is in the public’s interest to enable local businesses to do business more easily with the water district. Local businesses, she noted, spend money in their own community, which in turn benefits the county’s economy.

Several board members acknowledged the leadership of Director Richard P. Santos on this issue. Director Santos has been a long-time advocate for establishing a preference for local, small and minority businesses.

After the vote, Director Santos commented on the outreach needed to promote this new ordinance “to show that this board comes together and cares about the residents, the taxpayers and the business people…This is just a good thing. We’re investing back into our community.”

The ordinance will be applicable only to certain types of procurement. Per California law, the district cannot provide a preference for public works services valued at $25,000 or more, or for professional services, including architectural, engineering, environmental, landscape architectural, land surveying or construction project management services. The ordinance will be applicable only to solicitations (Invitations to Bid or Requests for Proposals) for goods and non-professional services more than $50,000. Non-professional services include auditing, marketing, management consulting, real estate, and insurance

In the procurement of goods or services where price is the determining factor for awarding a contract, 5 percent of the cost shall be subtracted from a bid submitted by local business enterprises to determine the winning bid. In procurement processes where the best value is the determining basis for awarding a contract, 5 percent of the total points awardable will be added to a local business enterprise’s score.

The district estimates that the expected cost for products and services that will be impacted by the new local business preference policy is approximately $59 million per year. The staff analysis concludes that by awarding the local business preference, the maximum additional cost for products and services ranges from $2.25 million to $3.5 million.

The new ordinance will be effective on Jan. 10, 30 days after its adoption. Beginning on Jan. 10, local businesses will be required to complete a Local Business Enterprise Declaration Form to avail the preference established by the ordinance. The form will be available on the  district’s website on that date.

The Santa Clara Valley Water District manages an integrated water resources system that includes the supply of clean, safe water, flood protection and stewardship of streams on behalf of Santa Clara County's 1.8 million residents. The district effectively manages 10 dams and surface water reservoirs, three water treatment plants, a state-of-the-art water quality laboratory, nearly 400 acres of groundwater recharge ponds and more than 275 miles of streams. We provide wholesale water and groundwater management services to local municipalities and private water retailers who deliver drinking water directly to homes and businesses throughout Santa Clara County.

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