DEPARTMENT: Finance
DEPARTMENT HEAD: Troy Elliott
COUNCIL DISTRICTS IMPACTED: Citywide
SUBJECT:
Amendments to Local Preference Program and Veteran-Owned Small Business Preference Program
SUMMARY:
These items will amend the Local Preference Program and the Veteran-Owned Small Business Preference Program to define a joint venture, provide for application of the programs to joint ventures comprised of local business entities and provide for the allocation of points for proposals received from joint ventures. In addition, the Local Preference Program will be amended to modify the definition of Principal Place of Business.
BACKGROUND INFORMATION:
The Local Preference Program was established by Ordinance 2013-03-21-0167 and became effective for solicitations issued after May 1, 2013. This program is intended to allow the City to use its spending powers to promote fiscal responsibility and maximize the amount of resident tax dollars that remain in the local economy for the benefit of its citizens by utilizing all available legal opportunities to contract with established City-located businesses. The Local Preference Program was amended by Ordinance 2013-12-05-0865 to grant preferences to local businesses in certain discretionary contract solicitations.
The Veteran-Owned Small Business Program was established by Ordinance 2013-12-05-0864 and became effective for solicitations issued after January 15, 2014. This program was established to honor the extraordinary service rendered to the United States by veterans of the United States armed forces and the City expresses this honor by giving a preference to small businesses owned and controlled by veterans in the award of certain contracts.
Solicitations for Catering and Concession for the Convention Center and River Barge Concession were issued on May 21 and June 15, respectively. Questions from potential respondents were received during the solicitation processes requiring clarification of the application of the preference programs with respect to newly formed joint ventures. The deadlines for submission of proposals have been extended to January 2015.
As a result of these questions, the City engaged a consultant to conduct a review of the City's SBEDA, Local Preference and Veteran-Owned Small Business programs and identify any policy inconsistencies between the goals of these programs. Based upon the review, the following proposed changes are recommended to be implemented at this time:
· Amend the Local Preference Program to require a minimum one year residency requirement for locally headquartered businesses.
· Amend the Local Preference Program and Veteran-Owned Small Business Program to allocate preference points based upon the percentage of ownership of each business entity comprising the joint venture responding to discretionary solicitations for which points are applicable.
· Clarify that all members of a joint venture must be City Businesses for the application of preferences to solicitations governed by the bidding statute.
If approved, the proposed changes to these programs will become effective immediately, and apply to solicitations with response deadlines after January 1, 2015, to allow for implementation.
ISSUE:
The current Local Preference Program and the Veteran-Owned Small Business Preference Program do not allow for preferences to be granted in situations when parties form a new joint venture in order to respond to a solicitation. Upon approval of these ordinances, ownership and location of the individual business entities may be considered for newly formed joint ventures.
ALTERNATIVES:
Should these amendments not be approved, contracts will continue to be awarded in accordance with current parameters of the Local Preference Program and Veteran-Owned Small Business Preference Program. Proposed changes to these programs could positively impact potential contract awards to local businesses and veteran-owned small businesses.
FISCAL IMPACT:
Departmental budgets may be impacted when the Local Preference Program and Veteran-Owned Small Business Preference Program are applied, resulting in increased costs.
RECOMMENDATION:
Staff recommends approval of these Ordinances amending the Local Preference Program and Veteran-Owned Small Business Preference Program to clarify application to joint ventures and modify the definition of Principal Place of Business.