Local Purchasing Preference – Los Angeles

On contracts of $100,000 or less, the city of Los Angeles grants a 10% preference to small, local businesses.  A small, local business is defined as one that is independently owned and operated, located in the county of Los Angeles, and not “dominant in its field of operations.”

Los Angeles County also grants small, local businesses a 5% preference on county contracts.

Sec. 10.25.  Small, Local Business.

A business entity shall qualify as a “Small, Local Business” as used in this ordinance if it:

(a) Is not (or together with an affiliate) dominant in its field of operations.

(b) Is independently owned and operated, with its principal office located in the County of Los Angeles and holds a City business license issued by the Tax and Permit Division of the City Clerk’s office, if this firm is subject to the City Business Tax.

(c) Has requested classification as a Small, Local Business and has been approved as such by the City.  In order to be so approved, a business entity shall set forth, under penalty of perjury, such information as is requested by the City on either electronic or hardcopy forms supplied by the City as part of the supplier registration process and/or not less than five (5) calendar days before the last day for submission of the bid or proposal as to which the business entity seeks to qualify as a Small, Local Business.  The forms containing the required information shall be submitted to the Department of Public Works, Bureau of Contract Administration.  Among the criteria the City shall consider in determining whether a business entity so qualifies is whether the business entity, together with any affiliate, has annual receipts which are less than $3 million for the previous fiscal year.  The City may in the alternative request such information for the previous calendar year.

Added by Ord. No. 153,662, Eff. 6-1-80.
Amended by:  Ord. No. 157,595, Eff. 5-15-83, Ord. No. 169,059, Eff. 10-24-93; Ord. No. 173,186, Eff. 5-22-00; Subsec. (c), Ord. No. 174,048, Eff. 8-5-01.

Sec. 10.28.  Award of Contracts.

Any supplier or contractor who qualifies as a “Small, Local Business” and is a responsible bidder or proposer shall be granted a preference as to all contracts of $100,000 or less, for which bids or proposals were solicited, in an amount equal to 10% of the bid or proposal of the lowest and best responsible bidder or proposer, if that latter bidder or proposer has not qualified as a Small, Local Business.  If, after deduction of the 10% preference from the bid or proposal of the Small, Local Business, the bid or proposal is equal to or less than the lowest bid or proposal, the bid or proposal of that Small, Local Business shall be deemed to be the lowest bid or proposal.

Added by Ord. No. 153,662, Eff. 6-1-89.
Amended by:  Ord. No. 165,973, Eff. 7-23-90; Ord. No. 173,186, Eff. 5-22-00; Ord. No. 174,048, Eff. 8-5-01.


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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.