Local Purchasing Preferences - San Jose, CA

San Jose grants local small businesses (those with 35 or fewer employees) a 5% price preference in the awarding of city contracts. For services provided through a request-for-proposal process, local small businesses receive a 10% point advantage. (Local businesses of all sizes also receive a 2.5% preference, but the city defines a "local" business as any business with a location in Santa Clara County.)

From the City of San Jose Code of Ordinances:

Part 4 AWARD OF CONTRACTS

4.12.320 Application of preference in award of contracts.

A. Prior to the issuance of a solicitation, the procurement authority shall make a determination of whether price shall be the determinative factor in the award of the solicitation.

B. For solicitations where price has been chosen as the determinative factor, the preferences granted under this chapter shall be applied as follows:

1. Bidders who qualify as a local business shall be given a credit of two and one-half (2.5) percent of the cost bid; and

2. Bidders who qualify as a small business shall be given a credit of two and one-half (2.5) percent of the cost bid.

C. For solicitations where price has not been chosen as the determinative factor the preferences granted under this chapter shall be applied as follows:

1. Bidders who qualify as a local business enterprise shall be given a credit equal to five (5) percent of the total points used to determine the most advantageous quote or proposal.

2. Bidders who qualify as a small business enterprise shall be given a credit equal to five (5) percent of the total points used to determine the most advantageous quote or proposal.

(Ord. 27980.)

Part 1 DEFINITIONS

4.12.060 Small business enterprise. As used in this title, "small business enterprise" means a local business enterprise that has thirty-five (35) or fewer total employees. With respect to bids or proposals submitted by partnerships or joint ventures, the number of employees for purposes of qualifying as a small business enterprise shall be determined by the total number of employees of each of the members of the partnership or joint venture combined. (Ord. 27980.)

4.12.030 Local business enterprise. "Local business enterprise" means a business enterprise, including but not limited to a sole proprietorship, partnership, or corporation, which has a legitimate business presence in the County of Santa Clara, California. Evidence of legitimate business presence in San José shall include:

A. Having a current San José business tax certificate; and

B. Having either of the following types of offices operating legally within the County of Santa Clara:

1. The contractor's principal business office; or

2. The contractor's regional, branch or satellite office with at least one (1) full-time employee located in the County of Santa Clara.

(Ord. 27980.)

More information:

• Small Business Opportunity Program — San Jose's procurement preference is part of this larger city initiative to increase opportunities for small local enterprises to do business with the city.