3.40.030 - Local preference.
A.
Definitions. .....The following definitions shall apply to this chapter:
"Bid" means any response to a City solicitation for bids or proposals. "City" means the City of San Clemente.
"Contract" means a written agreement for the purchase of goods, equipment or services, including construction, for the benefit of the City or its residents.
"Contractor" means a person, business or entity awarded a contract by the City. "Local vendor", "local business", "local contractor", or "local bidder" means a small business with a physical location in San Clemente as indicated on an approved business license. "Proposal" means any response to a City solicitation for bids or proposals. "Small business" means a business or entity that meets the requirements of a small business enterprise certified pursuant to Article 1 (commencing with Section 14835) of Chapter 6.5 of Part 5.5 of Division 3 of Title 2 of the Government Code as that section may be amended from time to time and that performs a commercially useful function within the meaning of public contract code section 2002(d) as that section may be amended from time to time.
B.
Local Business License Required. .....Any business or entity seeking to apply the provisions of this chapter must have a valid business license issued by the City of San Clemente which must be in good standing and must qualify as a small business. The business must be physically located in the municipal boundaries of the City of San Clemente. If for any reason the contractor fails to qualify as a local business for more than 60 days during the entire term of the contract, the City shall be entitled to withhold or recover funds from the contractor in an amount that represents the value of the bid or proposal preference.
C.
Application of Ordinance. .....When applying the provisions of this chapter to a bid, the City shall apply the preference to the bid price solely for bid evaluation purposes such that the total price bid by a local business shall be reduced by seven percent of the bid amount, and the reduced bid amount shall be deemed the amount of the bid by the bidder.
This chapter does not create a right to receive a bid or proposal preference. The City Council may, at any time before the award of a contract, determine that it is not in the City's best interest to grant a bid or proposal preference and direct staff to award the contract to the bidder or proposer eligible for the award without consideration of the provisions of this chapter.
Local subcontractors are not eligible for the local preference.
D.
Local Preference for an Open Bid. .....If the total combined bid amount submitted by a responsible local vendor is not greater than 107 percent of the apparent low bid and all other rating criteria is considered to be equal, preference shall be given to the responsible local vendor, unless waived prior to the contract award by the San Clemente City Council finding the waiver would serve the best interests of the City and the public. However, in 1/27/26, 12:12 PM San Clemente, CA Code of Ordinances
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no case shall the amount of the preference exceed $150,000.00. This provision shall not apply to contracts required by state or federal statutes and/or regulations to be awarded to the 'lowest responsible bidder', or otherwise exempted from local preference.
E.
Local Preference for a Sealed Bid. .....A seven percent preference shall be granted to local vendors on all sealed bids, unless waived prior to the contract award by the San Clemente City Council finding the waiver would serve the best interests of the City and the public. However, in no case shall the amount of the preference exceed $150,000.00. This provision shall not apply to contracts required by state or federal statutes and/or regulations to be awarded to the 'lowest responsible bidder', or otherwise exempted from local preference.
F.
Local Preference Procurement Policy. .....This chapter is intended to act as a procurement policy within the meaning of and in compliance with the requirements of Public Contract Code section 2002(c).
G.
Oversight. .....City staff shall investigate any allegation of potential fraudulent behavior on the part of a entity or individual for the purpose of qualifying for and being awarded a local vendor preference. If the City Council determines after a hearing that a contractor was not actually qualified as a local business at the time that the application for the local vendor preference was made or at the time that the contract was awarded, the City shall be entitled to withhold or recover funds from the contractor an amount that represents the value of the bid or proposal preference and/or the City may, in its discretion, declare the contract void and the contractor's bid nonresponsive and award the contract without regarded to such bid. (Ord. 1207 § 1 (part), 1998)
(Ord. No. 1750, § 3, 5-16-2023)
1/27/26, 12:12 PM San Clemente, CA Code of Ordinances
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