Sacramento Looks to Improve Small Business Purchasing

Sacramento County is working to increase opportunities for small and local business by enhancing its procurement and contracting program and streamlining the process for vendors. Increasing the dollar threshold for incentives from $250,000 to $1 million and increasing the local business preference percentage from 3% to 5% will increase the number of vendor contracts to which the program can be applied.

“The County purchases more than $100 million each year in goods and services with about half of that expenditure directed to small and/or local businesses.  Expanding the opportunity for additional businesses to participate in the program will have a positive impact on our business climate and help create more jobs,” said Don Nottoli, Chairman of the Board of Supervisors. “The generally accepted ‘trickle down’ ratio for these types of programs is about 3-1, and therefore, the changes should help improve the economy in Sacramento and surrounding areas.”

The program enhancements will include using new methodology to apply the preferences which will make it much easier for vendors to understand the program and save County staff time and costs.

The changes have received very favorable response from the Sacramento Public Agency Consortium (SacPAC), and the Asian, Hispanic, and Black Chambers of Commerce.

The Board will vote on the program May 8, and the it will become effective June 22, 2012 and the County will continue to conduct training classes for business to help them navigate the procurement and bidding system. Details can be found at under Local Vendor Preference athttp://www.saccountybids.net.

Program Highlights:

  • Increase the solicitations threshold for contract awards for goods and non-professional services from $250,000 to up to $1,000,000.
  • Increase the 3% local vendor preference to 5%.
  • Maintain the current 2% price preference for ‘small businesses’ (See Note) located in the six-county Regional Market Area (Sacramento, El Dorado, Placer, Sutter, Yolo, and Yuba counties).
  • Allow the 5% local preference to be added to the 2% small business preference for a combined total preference of 7% for local small businesses in Sacramento County, when applicable, with a preference limit of $50,000 per vendor for any single solicitation.

County procurement expenditures:

  • 2011:  Total spend = $136 mil, local $59 mil (43%)
  • 2010: Total spend = $142 mil, local $71 mil (50%)
  • 2009: Total spend = $174 mil, local $90 mil (52%)

NOTE:  The County defines a “small business” as a State designated micro-business that is independently owned, not dominant in its field operation, and is a service, construction, or non-manufacturing firm with 25 or fewer employees and has average annual gross receipts of $2,750,000 or less for the previous 3 years.

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