HomeMy WebLinkAboutLocal Vendors Preference INTEROFFICE MEMORANDUM
CITY OF PALM DESERT
DATE : MARCH 24 , 1994
TO: CITY MANAGER, HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: GENERAL SERVICES/PURCHASING
SUBJECT: LOCAL VENDORS PREFERENCE
Recommendation
Based on legal opinion and factors outlined below, it is
recommended:
1) That the City continue to rely upon Palm Desert Municipal
Code, Chapter 3 . 32 and direct all City departments to
encourage the use of local firms whenever possible.
2 ) That the City decline to adopt a more restrictive local
preference policy at this time.
3) That Council direct staff to develop, for Council ' s approval,
an outreach program similar to the program adopted by the
Riverside County Board of Supervisors on March 8, 1994 . Such
a program would formalize a polciy to encourage businesses run
by minorities , women and disabled veterans to compete for City
business (see attached Desert Sun article) .
Background and Discussion
In January, Council questioned a City truck bid award to a La Habra
Ford agency which was $302 lower than Fiesta Ford in Indio. Dave
Erwin correctly ruled that the City' s Municipal Code states that
awards are to the "lowest responsible bidder. "
Very few cities or counties have a local preference policy.
Several cities, including the City of Los Angeles, are in
litigation resulting from such a policy. Recently, a local
preference bill sponsored by Assemblywoman Julie Bornstein was
defeated in the State Legislature (see attached newspaper
clipping) .
In November 1993, Riverside County Counsel ' s opinion was, "for a
policy establishing a local preference to be validly adopted by the
County, it would have to be first supported by a consultant ' s
disparity study and adequate findings based thereon and then
narrowly drawn to address the evil examined in the study" :
1 ) " (The existence of) a particular evil which the policy is
intended to address;
2 ) That non-residents are a particular source of that evil; and
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3 ) That the policy' s approach bears a substantial relationship to
that evil, 1st Westco Corp. v. School District of Philadelphia
(E .D. Pa. , 1993) . "
On November 23, 1993, upon recommendation of CAO Larry Parrish, the
County Board of Supervisors, by unanimous vote, declined to adopt
a local preference policy (see attached Riverside County Counsel ' s
opinion, CAO' s recommendation, and Board Minute Order accepting the
findings) .
The National Institute of Government Purchasing (NIGP) and the
California Association of Public Purchasing Officers (CAPPO) both
oppose preferences for public purchasing. An analysis by the
National Association of State Purchasing Officials (NASPO) in
response to queries by legislators, public officials and members of
the private sector concluded:
"The surface appeal of such a policy is quite compelling
because this appeal has political as well as economic
overtones . Put bluntly, a policyof local preference in
public purchasing is a bad policy. It reduces, if it doesn't
stifle, the competitive climate necessary for the conservation
of the tax dollar. "
"A preference in the form of a percentage allowance favoring
local bidders •is inequitable because it results in part of the
tax dollar being spent in subsidy instead of value. Local
vendors already enjoy proper and natural advantages : a more
intimate knowledge of local governments ' needs; a competitive
advantage in delivery distance; the advantages of local sales
and service effort; and easier access to the purchasing
facility for review of specifications and bids . "
City Attorney' s Opinion
The subject of local business preferences has been addressed
previouly by the federal courts, Associated General Contractors of
California, Inc. v. City and County of San Francisco ( 9th Cir.
1987 ) and by the opinion of John K. Van De Camp, State Attorney
General . In both instances, the subject of analysis was a 5% bid
preference for local businesses .
The Court analyzed a San Francisco ordinance purporting to give a
preference to local businesses . The Court addressed the
competitive bid question as a matter of statutory interpretation
since the bid requirements themselves were imposed by the City's
charter. A city charter provision prevails over a conflicting
ordinance of a charter city, just as state law prevails over a
conflicting ordinance of a "general law" city, such as Palm Desert.
With respect to contracts not competitively bid, the Court
scrutinized the local business preference under the U.S.
Constitution' s Equal Protection clause. With respect to
competitive bidding, the Court finds that the term "lowest
responsible bidder" does not encompass preferences for women and
minority businesses . In that respect, San Francisco ' s status as a
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charter city becomes relevant, for unlike San Francisco ' s charter,
the Public Contract Code (by which Palm Desert' s contracts are
governed) does contain a special exemption from its lowest
responsible bidder requirement for minority owned businesses .
Section 2000 of the Public Contract Code provides that any local
agency may require that a contract be awarded to the lowest
responsible bidder who also does either of the following:
1) Meets minority business participation goals and requirements
established by the local agency.
2 ) Makes a9ood faith effort" , in accordance with the criteria
established, tocomply with the goals and requirements .
Most importantly, the Court recited established case law that only
a large government entity with sweeping powers that truly
represents "society, " such as the U. S . Congress, can purport to
remedy the past effects of societal discrimination through
preference in its own contracts . A smaller entity, such as a city,
can only remedy the past effects of its own discrimination through
preferences for minorities and women.
Accordingly, unless the City of Palm Desert has documented evidence
that it has discriminated in its own past purchasing practices (and
wishes to admit •it) , it may not attempt to "remedy" such
discrimination through preferences (see attached Palm Desert City
Attorney' s opinion) .
Conclusion
City Attorney Dave Erwin concurs with the findings :
1 ) The City may not give local businesses a preference on
contracts and purchases that are competitively bid; but may
give a preference to minority and women businesses .
2 ) For non-competitively bid contracts and purchases, the City
may give local businesses a bid preference, but only if
supported by a disparity study that makes discrimination
findings .
REVIEWED p CONCUR:
LARRY R. McALLISTER DAV°lD J. RWIN
General Services Cry COUNCIL_ACTION: City Attorney
Purchasing Of f 4--�e//r.�,?;:;-TT�E++D ,/ DENIED
LC:ECEIt ED G_ IER
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Attachments ��- _,�� r \ �-ram )
Minority
THE DESERT SUN—Wednesday, March 9, 1994
urbeai h
McKinney said GSA's purchases
0 u t re a c h «Thank goodness alone accounts for $170 million an-
nually and that includes profession-
Continued from Cl they are corning al services, supplies for jails, and
III correct it. county cars and trucks.
McKinney said the manual will into the .2 1st cen- Also, federal and state policies
Na n provide steps for implementing, tury. VVe need it. » that mandate the use of minorities,
managing and enforcing the policy women and disabled veterans in the
of giving the three groups the op- Deb Truax, county's contracting activities
portunity to compete in bids. Advocacy In Action when state or federal funds are
BUSINESS HELP: Supervisors say McKinney estimated 32 percent used will be followed to the fullest
of the county's small businesses works contracts, profession-
that extent, according to a staff report.
yes to proposal to help minority publicP
that provide goods the county could al consultants or trainers from Truax said more than 80 percent
businesses earn more county work. use are of the three groups. firms or individuals engaged in of all funds coming into Riverside
The policy would apply to agree- "for-profit"business activities paid County are state and federal
By CECILIA CHAN ments,contracts,acquisition leases for in whole or in part out of county dollars.
The Desert Sun and purchase orders for materials, funds or funds administered by the And if the county follows the
RIVERSIDE— County supervisors Tuesday ap- services, , professional services, county,according .o a staff report. mandates it will have to poi Navail-
proved establishing an outreach program to encourage r i
minorities, women and disabled veterans' enterprises
to compete for county business.
And that pleased Deb Truax, the organizer of Advo-
cacy in Action, a group aimed at helping women and
'minorities into business.
, "Thank goodness they are coming into the 21st
century," Truax said. "We need it. able jobs where they're seen by mi- He said if the study shows the one or more minority, woman or
"This will provide access into a broader business norities,women and disabled veter- three groups are not getting their disabled veterans.
climate." ans, she said. fair share of county contracts,
—he county's General Services Agency is expected to McKinney said his responsibility "wq'll have to institute other ■The business concern must
e an Operations Procedure Manual in 120 days for will include developing a method measures." have its home office located in the
supervisors to adopt. for identifying and maintaining a The policy would apply to busi- United States, and must not be a
"This is primarily to encourage our procurement to list of certified minority, women nesses that must meet all the fol- branch or subsidiary of a foreign
be as open as possible in encouraging women and and disabled veterans businesses. lowing criteria: corporation, foreign firm or other
minorities," said Mischelle Zimmerman, director of foreign-based business.
the GSA. "We've done it in practice but it was never McKinney also will be in charge •■The business must be at least
formalized in a policy." of using the media to market and 51 percent owned by at least one VISIT COSTA RICH WITH US '
Truax,however,said the eastern end of the county is promote contract and business op- minority,woman or disabled veter-
often precluded from the loop when it comes to bidding portunities for minorities, women an, and in the case of publicly d®g�F3gm�
for county contracts because the bids are advertised in and disabled veterans. owned business, at least 51 percent C n AI
news publications outside the Coachella Valley. He said after the program has of the stock must be owned by at �►� + �
"At the moment I'm not aware of that," said Jim been in effect for a year, a study least one minority, woman or dis
McKinney, minority contract compliance officer for will determine if there's an in- able veterans group. LOW COST PAQIJ1G1E86198649888
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GSA, who will develop the manual. But if it is in creased participation by the three •The management and control INVES WITH US!
. practice, McKinney said every effort will be made to groups. of daily business operations are by
See OUTREACH/C2
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COUNTY CC ' ' NSEL ;4
_ . viemorandum
November 17, 1993
To: Mischelle Zimmerman
Director
G. S . A.
From: Gerald Blankenship A-13Deputy County Counsel
Re : Validity of a County Local Preference Policy
Reference is made to your memo to Supervisor Ceniceros dated
November 4, 1993 regarding the extent to which a local preference
policy may be adopted by a county. My research on this issue, at
the request of Mr. Katzenstein, indicates that a county may adopt
a local preference policy but only after adequate findings have
been made to justify the need for such a policy and provided
further the policy is narrowly drawn so as to remedy those needs.
without unnecessarily harming persons who are not responsible for
the problem.
The cases discussing the validity of a local preference policy
inquire into three areas--application of the privileges and
immunities clause, the commerce clause and the equal protection
clause. Practically all of the discussion is devoted to
application of the privileges and immunities clause. The courts do
not devote much discussion to an application of the commerce clause
as a possible barrier to a local preference policy because of the
development of the "market participant" doctrine which is now
rather widely used to allow a city, county or state a relatively
• free hand to buy or not to buy for itself in the open market in
much the same manner as a private business .
With respect to the privileges and immunities clause the local
preference policy will be upheld when the local agency is able to
demonstrate, through findings based upon a consultant' s study or a.
study carried out by employees of the agency, itself, " . . . (1) the
(existence of] the particular evil which the policy is intended to
address, (2) that non-residents are a peculiar source of that evil,
and (3) that the policy' s approach bears a substantial relationship
to the evil . " 1st Westco Corp. v. School District of Philadelphia
(E.D. Pa. , 1993) 811 Fed. Supp. 204 , 207 . In the 1st Westco case
the court concluded that the last two requirements were not met .
The court then went on to invalidate a statute in the state of
Pennsylvania requiring repair work done on school buildings to be
done only by workers who had resided in the state for at least 90
days .
i222'Re. 9,ROI
In the 9th Circuit case of Association of General Contractors of
California v. City and County of San Francisco (1987) 813 F. 2d.
922, 943 the court using an analysis under equal protection of the
laws concluded that a local preference policy adopted in the City
of San Francisco was drawn narrowly enough so as to be valid.
The policy had given a 5% bidding preference to businesses located
in the city when bidding on city contracts . The court noted that
administrative costs of doing business in San Francisco were
considerably higher than in surrounding cities and the desire of
the city to encourage businesses to locate and remain in the city
in fact served a valid public purpose .
Finally, the issue of the plaintiff' s standing when attacking the
policy must be examined. is the plaintiff who is adversely affected
by the local preference policy a resident of another state or a
resident of the same state but merely residing outside of the city
or county which adopted the policy. Standing is not a problem for
a plaintiff basing his attack on equal protection grounds but is a
potential problem for a plaintiff who is basing his attack on a
violation of the privileges and immunities clause. In the latter
case for a plaintiff to use the privilege and immunities clause to
successfully attack a local preference policy the plaintiff must
actually reside in a state outside the state in the which the
jurisdiction adopting the local preference policy is located. See
the discussion on this point appearing on pages 256-257 in United
Building & Construction v. Mayor and Council of Camden (1984) 79
L. Ed. 249 .
In conclusion, then, for a policy establishing local preference to
be validly adopted by the County it would have to be first
supported by a study and adequate findings based thereon and then
be narrowly drawn to address the evil examined in the study.
cc William Katzenstein
County Counsel
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19',Ii` Larry Parrish
County Administrative Office �JIEtU���:.�' C7uef Administrative Officer
4f4 r gt Q S
November 18, 1993
Honorable Board of Supervisors
County of Riverside
Robert T. Andersen Administrative Center
4080 Lemon Street-14th Floor
Riverside, CA 92501-3651
Subject: LOCAL PREFERENCE POLICY
Members of the Board:
The Administrative Office was directed to investigate adjacent jurisdictions' policies relative
to "local preference" for consulting services contracts. In addition, Supervisor Ceniceros
received correspondence from a Riverside County real estate appraiser expressing
concern about San Bernardino County's policy and recommending that the Board
consider similar treatment of their firms.
In surveying our adjacent jurisdictions, San Bernardino County adopted its policy recently,
(September 28, 1993); and there has not been sufficient time to evaluate its impact. San
Diego County approved a local preference policy approximately one year ago for
negotiated contracts and those awarded after formal bidding. Attached is
correspondence from their Purchasing Department which describes their application in
more detail. Orange County has no local preference policy.
It should be noted that the Board has a current policy (H-7) governing the selection of
architectural, engineering and appraisal services which applies to both the County and
the Flood Control District. Incorporated as part of that policy is the provision that:
"Objectives shall be to establish excellence in design within constraints of
time and costs, to foster innovations in construction, to provide
opportunity for all Riverside County firms, to solicit expertise outside
the County where it appears advantageous to the County's interests,
and to award design contracts at fair and reasonable prices."
County Counsel was also requested to comment on the legal validity of adopting a
County Local Preference Policy. Attached is Counsel's opinion which indicates that a
study and adequate findings would have to be established to uphold a local preference
policy.
3
1
Robert T. Anderson Administrative Center
4080 Lemon Street • 12th Floor.• Riverside, California 92501 • (909) 275-1100 • FAX (909) 27t-I Ills
• Board of Supervis • . November 18, 1993
Page 2
What has been determined in speaking with the affected County Department Heads is
that every effort continues to be made to encourage the use of local firms; however,
whether for Flood Control, Transportation, Health Care or General Services, there are
times when the expertise or experience can only be secured by having the flexibility of a
totally open bidding environment. The consensus is to retain the current policy without
restricting or narrowing the process.
What became apparent in the discussions with the neighboring jurisdictions is that the
effects of the sustained recession have created local pressure among firms to urge their
governing boards to adopt policies that are more favorable to the local economy. More
than once, this change in policy was characterized as a political expediency. Whether it'
proves to be advantageous public policy over the long-term is difficult to project at this
time.
Tr, _:e is no question that the Board is commr:•.ed to using local firms whenever possible.
At the same time, market competitiveness can be helpful in achieving cost control and the
best qualified professionals for a specific project. To restrict opportunities for competition
can be detrimental to our outreach for women/minority businesses in our economic
region, as well as, to the best interests of the County and its Board-governed districts
which often must rely on highly-technical service providers.
It is recognized that having two neighboring jurisdictions with local preference policies can
adversely affect our local firms who have become accustomed to securing governmental
contracts throughout our region. For this reason, the Board may wish to initiate a
dialogue with Board representatives in San Bernardino and San Diego Counties to
determine if their policies are intended for the short-term; or whether they may reconsider
them in light of our interdependence within the larger economic region.
RECOMMENDATION:
Based on the factors outlined above, IT IS RECOMMENDED that the Board:
1. Continue to rely upon Policy H-7 and direct all county departments and Board-
governed districts to encourage the use of local firms whenever possible.
2. Decline to adopt a more restrictive local preference policy at this time.
3. Consider the option of having a Board representative(s) arrange to meet with the
Chairs or their Board representative(s) in San Bernardino and San Diego to
express our concerns with the potential exclusion of Riverside County firms as a
result of their local preference policies.
Res Ily s mitted,
YP R I H
Chief Administrative Officer
Attachments
Mb*FS OF THE BOARD OF SUPEhIORS
COUNTY OF RIVERSIDE, STATE OF CALIFORNIA •
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On motion of Supervisor Buster , seconded by Supervisor
Ceniceros and duly carried by unanimous vote , IT WAS ORDERED that
the Administrative Office ' s letter dated November 18 , 1993
regarding Compatible Policy for Local Preference for consulting
services contracts , is approved as follows :
1 . Continue to rely upon Policy H-7 and direct all county
departments and Board-governed districts to encourage the
use of local firms whenever possible .
2 . Decline to adopt a more restrictive local preference
policy at this time .
3 . Consider the option of having a Board representative ( s )
arrange to meet with the Chairs or their Board
representative ( s ) in San Bernardino and San Diego to
express our concerns with the potential exclusion of
Riverside County firms as a result of their local
preference policies .
Roll Call : •
Ayes : Buster, Ceniceros , Larson and Younglove
Noes : None
Absent : Dunlap
I hereby certify that the foregoing is a full, true and correct copy of an order made and entered on
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November 23 , 1993 of Supervisors Minutes.
WITNESS my hand and the seal of the Board of Supervisors
Dated: November 23 , 1993 Al
Gerald A. Maloney, Clerk of the Board o .upe •rs, in and for
(seal) the County of ''v- ide, State of ' . . • is
&IP
By: A/ �i leputy
' AGENDA el
3 . 12
xc : A.O. , Co, Counsel
F;:?v :1 DS i8,9Z1
LAM OFFICES OF
BEST, BEST & KRIEG
February 24 , 1994
MEMORANDUM
TO: City Council Members,
City of Palm Desert
FROM: Marshall S. Rudolph, Deputy City Attorney„o•)�
RE: City Contracting and Purchasing Preferences
(File no. 72500. 0001)
QUESTIONS PRESENTED
1. May the City in its selection of contractors and
vendors exercise a preference for local businesses?
2 . May the City in its selection of contractors and
Y
vendors exercise a preference for businesses owned by racial
minorities or women?
SHORT ANSWERS
1. Yes, to some extent. With respect to competitively bid
contracts, the City may not exercise any preference for local
businesses. With respect to contracts and other purchases not
competitively bid, there is legal authority for allowing a 5%
bidding preference for local businesses, provided such a
preference is duly adopted by Council and supported by
appropriate findings.
2 . Yes, to some extent. State law specifically authorizes
cities to give a limited preference in the awarding of
competitively bid contracts to so-called minority and womens '
business enterprises. With respect to purchases not
competitively bid, a City policy giving a preference for
businesses owned by minorities or women would not be valid unless
the City itself had a documented history of discrimination in its
contracts and purchases against women and minority owned
businesses and the preference policy adopted was narrowly
tailored to remedy only such past discrimination by the City.
DISCUSSION
1. The subject of local business preferences has been
addressed recently by the federal courts in the case of
Associated General Contractors of California. Inc. v. city and
County of San Francisco (9th Cir. 1987) and by an opinion of the
state attorney general. The opinions of both the federal court
and the state attorney general are attached hereto for your
MSR47803
LAW OFFICES OF
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convenience, should you wish to review them. In both instances,
apparently by coincidence, the subject of analysis was a five
percent bid preference for local businesses.
The court in Associated General analyzed a San Francisco
ordinance purporting to give a preference to local businesses, in
the context of both competitively and non-competitively bid
contracts. The Court addressed the competitive bid question not
as a matter of constitutional law, but as a matter of statutory
interpretation since the bid requirements themselves were imposed
by the City' s charter. A city charter provision prevails over a
conflicting ordinance of a charter city, just as state law
prevails over a conflicting ordinance of a "general law" city.
Palm Desert is a general law city.
The court found that San Francisco's charter required
contracts' over a certain amount to be awarded to "the lowest
responsible bidder, " just as state law requires general law
cities to award contracts over a certain amount to "the lowest
responsible bidder. " The Court held that, barring some special
exemption in the charter for local businesses, the term "lowest
responsible bidder" means the lowest bidder with the capacity to
satisfactorily perform the proposed work. The Court rejected
arguments by the City that the term "responsible" is sufficiently
malleable to encompass preferences for local businesses (or, for
that matter, business owned by minorities or women) . The
attorney general opinion reaches the same conclusion.
With respect to contracts not competitively bid, the Court
scrutinized the local business preference under the U.S.
Constitution's Equal Protection Clause. since the discrimination
in question was not based on race or sex, but rather on whether a
business qualified as a San Francisco (i.e. , local) business, the
standard applied to the ordinance was simply "rationality. " The
ordinance contained two findings supporting the preference: (1)
that local businesses are a competitive disadvantage with
businesses from other areas because of the higher cost of doing
business in the City (e.g. , higher taxes, higher rents, etc. ) ,
and (2) that the public interest would best be served by
encouraging businesses to locate and remain in San Francisco
through the provision of a minimal "good faith" preference to
local businesses in the awarding of City contracts. The Court
approved both these justifications.
In addition, the Court deemed significant the fact that the
preference in question (a five percent bidding preference) was an
acceptable and non-excessive means of accomplishing the City's
stated objectives. Moreover, the Court noted its approval of the
rather broad definition of "local business" in the ordinance
pursuant to which a foreign business could qualify as a local
business by acquiring fixed offices or distribution points within
the city and paying its permit and license fees from a San
Francisco business address.
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The analysis contained in the attorney general opinion is
not as detailed as that of the federal court. However, its basic
conclusion is the same: namely, a five percent bidding preference
for local businesses is a rational and reasonable means of
promoting the legitimate governmental purpose of encouraging
local economic development. Unfortunately, neither the attorney
general opinion nor the federal court opinion offers any guidance
as to just how large a preference a city could give local vendors
without becoming unreasonable. They simply concluded that the
actual percentage before them for analysis -- five percent in
both instances -- was acceptable.
2 . The Court ' s analysis of the San Francisco ordinance's
preference for women and minority owned businesses is similar to
the analysis it applies to the ordinance's local business
preference. 1 With respect to competitive bidding, the Court
finds that the term "lowest responsible bidder" does not
encompass preferences for women and minority businesses and that
there was no other exemption to that requirement in the San
Francisco charter for such businesses. .In that respect, San
Francisco ' s status as a charter city becomes relevant, for unlike
San Francisco's charter, the Public Contract Code (by which Palm
Desert's contracts are governed) does contain a special exemption
from its lowest responsible bidder requirement for businesses
owned by minorities and women.
Section 2000 of the Public Contract Code provides as
follows:
(a) Notwithstanding any other provision of law
requiring a local agency to award contracts to the
lowest responsible bidder, any local agency may require
that a contract be awarded to the lowest responsible
bidder who also does either of the following:
(1) Meets goals and requirements established
by the local agency relating to participation
in the contract by minority business
enterprises and women business enterprises.
If the bidder does not` meet the goals and
requirements established by the local agency
for that participation, the local agency
shall evaluate the good faith effort of the
bidder to comply with the goals and
requirements as provided in paragraph (2) .
(2) Makes a good faith effort, in accordance
with the criteria established pursuant to
subdivision (b) , prior to the time bids are
opened, to comply with the goals and
1 Note that the state attorney general opinion does not
address preferences for minority and women businesses.
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LAW OFFICES OF
BEST, BEST & KRIEL _ l
requirements established by the local agency
relating to participation in the contract by
minority or women business enterprises.
The statute then enumerates ten different ways in which the
bidder' s "good faith effort" is to be evaluated. The statute
also provides a detailed set of criteria by which a business may
qualify as a minority business enterprise ("MBE") and/or women
business enterprise ("WBE") . The statute excludes any contract
funded in whole or in part by the federal government to the
extent any conflict exists.
Thus, it appears that in the context of a contract that is
required by the Public Contract Code to be let to the lowest
respofisible bidder, a general law city such as Palm Desert may
give a•preference in awarding the contract to businesses owned by
minorities or women. 2 In the context of non-competitively bid
contracts and purchases, the Court found the San Francisco
ordinance ' s preferences for minority and women business
enterprises to be unconstitutional. The. Court applied the U.S.
Constitution' s Equal Protection Clause. Since racial and gender
based preferences were involved, such preferences were held to a
much stricter standard of judicial scrutiny than were the local
business preferences. The Court found the ordinance lacking in
many respects.
Most importantly, the Court recited established case law
that only a large government entity with sweeping powers that
truly represents "society, " such as the U.S. Congress, can
purport to remedy the past effects of societal discrimination
through preferences in its own contracts. A smaller entity, such
as a city, can only remedy the past effects of its jun
discrimination through preferences for minorities and women. In
the case of San Francisco 's ordinance, there was no indication
that the city itself had discriminated in its past purchases nor
that the ordinance's remedy was narrowly tailored enough to
remedy any such discrimination. Moreover, the Court felt it was
extremely unlikely that all of the minority and women owned
businesses in the city were disadvantaged, in any event.
2 It is interesting to note another related provision of
the Public Contract Code (Chapter 2.5, a copy of which is
attached hereto) that was recently brought to the Council's
attention by Deb Traux which allows local agencies to participate
in the state' s effort to award state contracts to minority and
women business enterprises by "certifying" that local businesses
in its community meet established criteria for minority and women
business enterprises. Any state department must accept a local
agency's certification of a minority or women business
enterprise, provided the local agency utilized appropriate
criteria in making the certification determination.
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LAIN OFFICES OF
411
BEST, BEST & KRIEL • _
Accordingly, unless the City of Palm Desert has documented
evidence that it has discriminated in own its past purchasing
practices ._(and wishes to admit it) , it may not attempt to
"remedy" “suchC`discrimination through preferences for minority and
women owned businesses. Note that this logic does not apply in
the context of the Public Contract Code where the state has
created the remedy. The state is more akin to the federal
government in its representation of society at large, thus it
arguably possesses the constitutional authority to pass laws
intended to remedy not only its own past discrimination, but that
of society as a whole.
CONCLUSION
The City may not give local businesses a preference on
contracts and purchases that are competitively bid pursuant to
the Public Contract Code, but may give minority and women
business enterprises a preference on such contracts to the extent
allowed by the Public Contract Code. For non-competively bid
contracts and purchases, the reverse is true: the City may give
local businesses a bid preference, but may not give such a
preference to minority and women business enterprises unless
intended to rectify past discrimination by the City.
cc: Bruce Altman; City Manager
Dave Erwin, City Attorney
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