Business break for the little guys

Los Angeles County buys lots of stuff— everything from architectural services and badges to windshield wipers and welding goggles, according to this directory.

If you’re a local small business seeking a piece of the action, a new county ordinance is designed to give you a better shot at landing one of those contracts.

Los Angeles County Supervisors on Tuesday voted to increase from 5% to 8% the price preference given to small local businesses seeking county contracts. That means those businesses could come in with a price 8% higher than other bids and still seal the deal, all other variables being equal.

An analysis by the county’s Internal Services Division found that granting a price preference to small local firms has cost the county very little in the years since the initial policy was enacted in 2002. In the past three years, for example, it cost the county a total of $70,648.

“The preference is a small price to pay to help the local economy and keep jobs here,” said Internal Services director Tom Tindall. Raising it to 8% probably would cost very little more over the same period—likely $100,000 or less, he said. And it could pay rich dividends if it helped boost participation by small local firms.

“What we hope it will do is encourage more local small businesses to try” for a county contract, Tindall said.

As it stands now, local small businesses got just $184 million of the $14.9 billion in contracts and purchase orders put out by the county in the past three years. Interestingly, virtually all of them won their contracts as the low bidder, without needing any price preference at all.

Still, the hope is that sweetening the deal for the home team couldn’t hurt and might spur broader economic benefits.

“The City of Los Angeles recently implemented an 8% preference program after a USC analysis concluded that the heightened economic activity and jobs created by the program would generate new revenue that would offset any incremental costs,” Supervisors Zev Yaroslavsky and Michael D. Antonovich said in their motion pushing for the county to make the change.

Tindall said the new ordinance, set to go into effect Nov. 1, is just one of the ways in which the county is trying to become friendlier to small local firms. He said the county has a prompt payment program in which vendors are paid within 15 days of submitting an approved invoice—a boon especially for smaller business in which cash flow is a constant concern. And he noted that certified local small businesses can land sole-source contracts of up to $5,000 from some county departments.

The Los Angeles County Office of Small Business has tips for getting certified, along with other information. It also has a toll-free phone number, (855) 230-6430.

Posted 9/13/11