With a population of 3.8 million people, the City of Los Angeles is the second largest city in the U.S. after New York City. L.A. is ranked 7th in the Global Economic Power Index (behind New York, London, Tokyo, Hong Kong, Paris and Singapore) and is considered the largest manufacturing center in the United States. The administration and operations needs of Los Angeles are handled by 42 government departments, all of which purchase goods and services from all types of vendors, both within and outside the city. If you are a vendor who owns a business within the city limits of Greater Los Angeles, you’re in luck, as local businesses are preferred over outside vendors when it comes to securing City procurement contracts.
Contracting with the City of Los Angeles
Vendors who would like to bid on contracts with the city of L.A. must first register for a TRC (Tax Registration Certificate). While certain vendors are exempt from the TRC, these businesses must instead register for a VRN (Vendor Registration Number). In either case, registered vendors who are looking for bids can find them through the Los Angeles Business Assistance Virtual Network (LA BAVN); this network posts all bids that are available with the City and publishes all contract awards and related details. For procurement contracts, the City purchases goods and services both in response to written bids (for any contract valued over $1,000) and telephone inquiries.
To promote local sourcing and provide support to local businesses, the City of Los Angeles created The Local Preference Ordinance, which provides local L.A. businesses with an 8% competitive advantage on all City-published contracts. The ordinance also states that government departments looking to purchase goods and services from businesses in L.A. County must consider their bid proposals at 8% below the submitted value for contracts that are selected based primarily on the lowest bid.[i] This ordinance allows local businesses to compete on contracts more effectively.
L.A. also established the Business Inclusion Program, which is intended to boost small business’ participation in government contracting. Alongside the Business Inclusion Program there is the Community Business Enterprise (CBE) Program for certified M/WBEs, DBEs and DVBEs. Eligible vendors who join the program will be added to L.A. County’s CBE listing, which is a list of preferred contractors used by government departments to meet procurement and contracting needs. Eligible vendors can also take advantage of the programs, tools and resources offered by the CBE, which include workshops, events for networking opportunities, seminars, conferences and more. It’s also a great resource for vendors who are seeking business partners who may be interested in working as subcontractors.[ii]
If a vendor is eligible, it is recommended that they certify their business as a Minority or Women-Owned Business (M/WBE), Disadvantage Business Enterprise (DBE), Airport Concession Disadvantage Business Enterprise (ACDBE) or a Small Local Business Enterprise (SLBE). Businesses certified as an SLBE are eligible to receive a 10% preference on competitive bids worth $100K or less.[iii]
Since 2012, the City of Los Angeles’ budget has increased significantly to accommodate the purchasing needs of the City’s many agencies and departments. In 2012 the City’s budget was $21.5 billion; over the last 3 years the budget has grown by nearly $6 billion, to reach an estimated total of $27.14 billion in 2015. Of that amount, $4.59 billion (17%) was provided by the federal government, while $6.009 billion (22%) was provided by the State of California.
What is the Money used for?
- Public Protection - $7.337 (27%)
- Health & Sanitation - $7.808 (29%)
- Public Assistance - $6.694 (25%)
- General - $3.437 (13%)
- Recreation & Culture - $0.781 (3%)
- Other - $1.084 (3%)
(*Source: Chief Executive Office: L.A. County. Budget Information. Ceo.lacounty.gov. 11 Dec. 2015)
As you can see, there are many benefits to doing business with the City of Los Angeles; for those who own businesses within the City limits, take advantage of the opportunity to be considered first for government contracts. Most cities and towns prefer to “shop” local and support businesses within the region anyways, but since local businesses in L.A. are guaranteed to have preference over outsiders, it would be wise to pursue the opportunities that match your business’ service offer.
Danielle Calamaras | BidNet.com
[i] n.p. “Doing Business with the City of L.A.”Mayor’s Office of Economic and Workforce Development. losangelesworks.org. 2010. Web. 11 Dec. 2015
[ii] n.p. Community of Business Enterprise Program. County of Los Angeles Office of Small Business/PTAC. Osb.lacounty.gov Web. 11 Dec. 2015
[iii] n.p. “Contractors Handbook: A Guide to Doing Business wi the City of L.A.” Los Angeles Mayor’s Office of Economic and Workforce Development. Losangelesworks.org. 2010. Web. 11 Dec. 2015