Los Angeles-based businesses employing local workers would receive preferences in seeking bids and proposals for city contracts under a proposed city ordinance.

Mayor Antonio Villaraigosa and City Councilmen Paul Krekorian and Bernard Parks have announced their support of the city of Los Angeles’ so called local preference ordinance, which would award local businesses seeking government contracts by giving them greater value on their bids and proposals.

“Awarding government contracts to other cities represents a significant missed opportunity to stimulate the local economy and create jobs,” Villaraigosa said. “The local preference ordinance represents one more example of how my Office of Economic and Business Policy is thinking creatively and strategically to jumpstart our economy and create a competitive operating environment for businesses to thrive.”

Parks, the chair of the Budget and Finance Committee, added, “I am so pleased to work with my colleagues on creating an ordinance that gives preference to those businesses that pay taxes to the city and hire residents of the city.”

The new ordinance would provide an eight-percent preference to local businesses in their bids and proposals for government contracts. It will give preferential treatment to businesses during the two processes that award procurement funding: low bid contracts and request for proposals.

In the low bid contract scenario, the local preference will lower the bid price by eight percent, while in the RFP scenario a local business will be given additional evaluation points.

To receive a local preference, a business must:

Have filed and maintained a Business Tax Registration Certificate for the prior six months;

Occupy building space in the geographical area required by the City Charter as evidenced by either a lease or deed; and

Have 50 percent full-time employees work in the city at least 60 percent of the time or have 50 full-time employees work in the city at least 60 percent of the time.

City officials note that local preference policies are commonly used in various cities throughout the country to spur local economic development and job creation.

“This will help create jobs in Los Angeles,” First Deputy Mayor and Chief Executive of Economic and Business Policy Austin Beutner said. “The local preference policy will help small businesses that are the backbone of the Los Angeles economy.”