3.95 — LOCAL BUSINESS PREFERENCE PROGRAM

For the purposes of this chapter, the following definitions apply:

"Awarding authority" means the city council or any officer or employee of the city authorized to award or enter into any contract, as defined in this Section, on behalf of the city.

"Bid" means any response to a city solicitation for bids.

"City" means city of Placentia.

"Contract," for purposes of this chapter only, means a written agreement for the purchase of equipment, goods, supplies or services by or for the benefit of the city.

"Contractor" means a person, business, or entity submitting a bid, seeking to be awarded a city contract.

"County" means the county of Orange.

"Local business" means a business entity that meets all of the criteria established under this chapter.

"Principal place of business" means a location where a business maintains a physical office and through which it obtains no less than 25% of its gross annual receipts.

"Proposal" means any response to a city solicitation for proposals. (Ord. O-2016-03 § 2, 2016)

• (a) In the competitive bidding process awarding authorities are authorized to extend a local business preference to contractors qualifying as a local business in accordance with the requirements of this chapter.

• (b) Local business preferences shall only be granted on city contracts involving the procurement of equipment, goods, supplies or services. A local business preference shall not be granted in any situation where it would otherwise be prohibited under state or federal law.

• (c) If granted, the local business preference shall be in the form of a 5% price advantage in the evaluation of a contractor's total bid price. In no event shall a local business preference exceed a maximum price advantage of $25,000 in the evaluation of a contractor's bid. The local business preference shall be used for the sole purpose of determining the lowest bid.

• (d) Before a contractor can be considered for local business preference, it must certify in its bid that it qualifies as a local business in accordance with the requirements of this chapter. The certification shall be submitted on a form prepared by city for this purpose. The contractor's certification shall constitute an application to the city, seeking a determination whether the contractor qualifies as a local business for the purpose of the contract being bid. The certification, and all information submitted in support thereof, shall be submitted by contractor under penalty of perjury. The city shall not be required to verify the accuracy of the certifications or the supporting information, but it may do so. The city shall have sole and absolute discretion to determine if a contractor qualifies. The city retains the right to deny a local business preference in any situation where it would not be in the city's best interest, or where it is unclear whether the requirements of this chapter have been met. The city administrator shall be responsible for making all determinations under this section, and the city administrator's decision shall be final. Decisions of the city administrator may be called up for review by the city council, in its discretion. Contractors shall have no recourse against city related to the denial of any application for certification, or the denial of a local business preference.

• (e) Qualification as a local business on one contract shall not automatically qualify a contractor for future contracts, but prior qualification is a factor which may be considered. If a contractor affirms under penalty of perjury that no information has changed since its last certification, information previously submitted may be considered for purposes of qualification under a new contract.

• (Ord. O-2016-03 § 2, 2016)

To qualify as a local business a contractor must satisfy all of the following criteria:

• (a) The contractor must have a valid Placentia business license.

• (b) The contractor must have a principal place of business located within the city limits, and the contractor must have been lawfully conducting its business primarily from that location for at least six months prior to the initial solicitation of bids or proposals for the contract at issue. The contractor must submit proof of local occupancy by supplying evidence of a lease, deed or other documentation satisfactory to the city. A post office box shall not be used or considered for purposes of qualifying as a local business.

• (c) If the contract will involve the payment of any sales taxes, no local business preference will be granted unless the primary point of sale for the contract is located within the Placentia city limits.

• (d) The contractor must submit evidence that its business is in full compliance with all local laws, is current on all applicable licensing requirements, and is not otherwise delinquent on the payment of any fees, taxes or other amounts owed to the city.

• (e) Status as a local business must be reestablished for each new contract. (Ord. O-2016-03 § 2, 2016)

The local business preference shall be applied to bids and proposals in the following manner:

• (a) The city is authorized to give a local business preference to a responsive and responsible bidder which has qualified as a local business, but only when it is awarding a contract for the purchase of equipment, goods, supplies or services. The local business must be able to provide the equipment, goods, supplies or services in a manner and quality which meets the city's bid specifications.

• (b) When applying the local business preference to a bid or proposal, the awarding authority shall reduce the total price bid by the qualifying contractor by 5%, with a maximum reduction of $25,000. The resulting amount shall be deemed the amount bid by that contractor for the sole purpose of evaluating the lowest bidder. If the contactor is ultimately awarded the contract, the contract price shall be the original amount bid not taking into account any local business preference granted.

• (c) If, after allowing a local business preference, two or more bids are determined to be substantially equal, the awarding authority, in its discretion, may award the contract to either party.

• (Ord. O-2016-03 § 2, 2016)

The preferences authorized under this chapter shall be subject to the following additional requirements:

• (a) This chapter neither creates a right to receive a local business preference, nor the duty to grant a local business preference.

• (b) This chapter only applies to contracts involving the expenditure of funds entirely within the city's control. This chapter shall not apply to contracts involving state or federal funds, if the granting of a local preference is prohibited.

• (c) This chapter shall not apply to contracts which are required under state, federal or local law to be granted to the lowest responsible bidder, or in any situation where the granting of a local business preference would be legally impermissible.

• (d) Local business preferences shall not be granted:

  • (1) On any sole source contracts;

  • (2) On contracts awarded under emergency or other noncompetitive circumstances;

• (3) On any contract where the awarding authority has determined, in its sole discretion, that the granting of a local business preference would not be in the city's best interests.

• (Ord. O-2016-03 § 2, 2016)

• (a) Any contractor granted a local business preference must continue to maintain its qualifications as a local business for the duration of the contract for which the preference was granted. Contractors shall have an affirmative duty to notify the city if facts change, such that the contractor no longer qualifies as a local business.

• (b) If a contractor fails to maintain its qualifications under this chapter, the city shall be entitled to both withhold and recover from the local business an amount equal to the value of the local business preference granted. The city may also withhold and recover any other costs reasonably incurred by the city as a result of the contractor's failure to maintain its qualifications under this chapter. Prior to seeking to withhold or recover funds, the city must provide 15 days' prior written notice and opportunity to cure the violation to the contractor.

• (c) The remedies available to the city under this chapter are cumulative to all other rights and remedies available to the city under law.

• (Ord. O-2016-03 § 2, 2016)

• (a) No person or contractor shall knowingly, and with an intent to defraud, obtain, retain, attempt to obtain or retain, or aid another in fraudulently obtaining, retaining, or attempting to obtain or retain, certification as a local business for the purpose of this chapter.

• (b) No person or contractor shall willfully and knowingly make a false statement, with the intent to defraud, whether by certification, affidavit, report or other representation, to a city official or employee for the purpose of influencing a city decision to grant or deny certification as a local business.

• (c) Any contractor that has obtained city certification as a local business by reason of having furnished false or misleading information, or by reason of having withheld information where the contractor knew or should have known the information was false or misleading or that the information withheld was relevant to the city's determination, and as a result the contractor was awarded a city contract to which it would not otherwise have been entitled, shall:

  • (1) Immediately pay the city the difference between the full value of the contract awarded to the contractor and the amount that would have been incurred by city if the contract had been awarded to the lowest qualified bidder without taking the local business preference into account;

  • (2) In addition, contractor shall pay the city an amount equal to 5% of the amount of contractor's bid; and

  • (3) Be subject to debarment from future award of contracts from the city.

• (d) The requirements of this section shall be clearly explained in contractor's application seeking certification as a local business, and shall be signed by contractor.

• (Ord. O-2016-03 § 2, 2016)

Nothing in this chapter shall be construed to limit or restrict the city's right and obligation to compare the quality and fitness of all supplies, materials, equipment and services proposed to be purchased by the city, or the duty to review and compare the character, responsibility, fitness and qualifications of all contractors submitting bids or proposals to the city. Furthermore, the preferences authorized in this chapter shall not be construed to limit the city's ability to grant any other preferences authorized by law.

(Ord. O-2016-03 § 2, 2016)

This chapter shall only apply to contracts first solicited by the city on or after June 1, 2016. (Ord. O-2016-03 § 2, 2016)