purchasing

California Resident Bidder Preference

Revised March 2, 2015

California Government Code, §4361. Preference is given in contracts and purchases for any public use to agricultural aircraft operators who are California residents if their bids do not exceed by more than 5.0% the lowest bids of nonresident agricultural aircraft operators.

California Government Code, §15813.3. In making contracts for the purchase, lease, or creation of works of art for California state buildings, preference may be given to artists who are California residents.

California Government Code, §§14835-14843. In solicitations where an award is to be made to the lowest responsible bidder meeting specifications, the preference to small business and microbusiness is 5.0% to the lowest responsible bidder meeting specifications. Definition of "small business" includes requirement that the principal office of the business is located in California, and that the businesses' officers are domiciled in California. The preference to non-small business bidders that provide for small business or microbusiness subcontractor participation is subject to rules and regulations of the Department of General Services and limited to a maximum of 5.0% to the lowest responsible bidder meeting specifications. In solicitations where an award is to be made to the highest scored bidder based on evaluation factors in addition to price, the preference to small business or microbusiness is 5.0% of the highest responsible bidder's total score. The preference to non-small business bidders that provide for small business or microbusiness subcontractor participation is subject to rules and regulations of the Department of General Services and limited to a maximum 5.0% of the highest responsible bidder's total score. The maximum small business preference shall not exceed $50,000 for any bid and the combined cost for preferences granted by law shall not exceed $100,000.

California Government Code, §4530-4535.3. Preferences are provided for California based companies submitting bids or proposals for state contracts to be performed at worksites in distressed areas by persons with a high risk of unemployment when the contract is for goods or services in excess of $100,000. Sections are discussed in more detail below.

California Government Code, §4533. When the state prepares a solicitation for contracts for goods in excess of $100,000, except a contract in which the worksite is fixed by the provisions of the contract, a preference of 5.0% is awarded to California-based companies for which at least 50% of the labor hours required to manufacture the goods and perform the contract shall be accomplished at a worksite or worksites located in a distressed area.

California Government Code, §4533.1. Where a bidder complies with §4533 or the worksite(s) where at least 50% of the labor required for contract performance is within commuting distance of a distressed area, percentage preferences are awarded for bidders that agree to hire persons with high risk of unemployment. The preference percentage is based on the percentage of such persons the bidder agrees to hire as a percentage of its work force during the period of contract performance: 1.0% preference for hiring of 5.0% to 9.0% of the bidder's workforce, 2.0% preference for hiring of 10% to 14% of the bidder's workforce, 3.0% for hiring of 15% to 19% of the bidder's workforce, and 4.0% preference for hiring of 20% or more of the bidder's workforce.

California Government Code, §4534. In evaluating proposals for contracts for services in excess of $100,000, except if the worksite is fixed by the provisions of the contract, a preference of 5.0% is awarded to California based companies for which no less than 90% of the total labor hours required for the contract is performed at a worksite or worksites located in a distressed area.

California Government Code, §4534.1. Bidders complying with §4534 are awarded additional preferences as set forth in §4533.1.

California Government Code, §4535.2. The maximum preference a bidder may be awarded is 15%, not to exceed $50,000 or, if combined with other preferences and provisions of law, not to exceed $100,000. Small business bidders qualified in accordance with §14838 shall have precedence over non-small business bidders such that application of bidder preferences for non-small business bidders shall not result in denial of award to a small business bidder when the small business bidder is the lowest responsible bidder or when the small business bidder is eligible for the award due to the 5.0% small business bidder preference.

California Code of Regulations, Title 2, §1896.101. When a state agency prepares an invitation for bid (IFB) for a contract for the purchase of goods exceeding $100,000, except a contract where the worksite will be fixed by the terms of the contract, the IFB must provide for a preference of 5.0% for California-based companies for which no less than 50% of the labor required to perform the contract shall be accomplished at a worksite or worksites located in a program area.

California Code of Regulations, Title 2, §1896.102. Additional preferences awarded to bidder complying with §1896.71 (Commercially Useful Function) from 1.0% to 4.0% in accordance with California Government Code, §7095(b) if bidder to hire the specified percentage of persons living in a high intensity unemployment area or enterprise zone qualified employees during term of contract performance.

California Code of Regulations, Title 2, §1896.104. When a state agency prepares an IFB or RFP for a contract for services exceeding $100,000, except an IFB or RFP where the worksite will be fixed by the terms of the contract, the IFB or RFP must provide for a 5.0% preference for California-based companies that shall perform the contract at a worksite or worksites located in a program area.

California Code of Regulations, Title 2, §1896.105. Additional preferences awarded to bidder complying with §1896.74 (Disabled Veteran Business Enterprise Participation) from 1.0% to 4.0% in accordance with California Government Code, §7095(b) if bidder to hire the specified percentage of persons living in a high intensity unemployment area or enterprise zone qualified employees during term of contract performance.

California Code of Regulations, Title 2, §1896.6. Small businesses granted the 5.0% small business preference when non-small business has submitted lowest-priced, highest scored bid ranked pursuant to §1896.8. Non-small businesses granted a 5.0% preference when non-small business has submitted lowest-priced, highest scored bid ranked pursuant to §1896.8 and the non-small business has included in its bid a commitment to subcontract at least 25% of its net bid price with one or more small business(es).

California Code of Regulations, Title 2, §1896.8. When awarding to lowest responsible bidder, the 5.0% small business or non-small business subcontractor preference is computed from the lowest responsive and responsible non-small or non-small subcontractor business bidders bid and subtracted from the bid amount of the small business or non-small business subcontractor, as applicable. When awarding based on highest scored proposal with evaluation weighing factors other than price, the 5.0% small business or non-small subcontractor business preference is limited to bids deemed responsive and of acceptable quality and is computed as a number that represents preference point as specified in the solicitation. The amount of small business or non-small business subcontractor preferences awarded on a single bid shall not exceed $50,000 and the combined cost of the small business or non-small business subcontractor preference and preferences awarded pursuant to other law shall not exceed $100,000.

California Code Register, Title 2, §1896.12. Eligibility for certification as small business includes requirements that the principal office be located in California and that owners be domiciled in California.

California Code Register, Title 2, §1896.31. When a state agency prepares an IFB for a contract for purchase of goods in excess of $100,000, except a contract where the worksite will be fixed by the terms of the contract, the IFB shall provide for a 5.0% preference for California based companies for which no less than 50% of labor shall be accomplished at a worksite or worksites located in a distressed area.

California Code Register, Title 2, §1896.32. Additional preferences from 1.0% to 4.0% in accordance with California Government Code, §4533.1 shall be awarded where a bidder complies with rule 1896.31 if the bidder will hire the specified percentage of persons with high risk of unemployment during the period of contract performance.

California Code Register, Title 2, §1896.34. When a state agency prepares an IFB or RFP for a contract for services in excess of $100,000, except an IFB or RFP where the worksite will be fixed by the terms of the contract, the IFB or RFP shall provide for a 5.0% price preference for California based companies that will perform the contract at a worksite or worksites located in a distressed area.

California Code Register, Title 2, §1896.35. Additional preferences from one to four percent in accordance with California Government Code, §4534.1 shall be awarded where a bidder complies with rule 1896.34 if the bidder will hire the specified percentage of persons with high risk of unemployment during the period of contract performance.

CALIFORNIA RECIPROCAL PREFERENCE

California Public Contract Code, §6107. When awarding contracts for construction, a state agency shall grant a California company a reciprocal preference as against a nonresident contractor from any state that gives or requires a preference to be given contractors from that state on its public entity construction contracts. The amount of the reciprocal preference shall be equal to the amount of the preference applied by the state of the nonresident contractor with the lowest responsive bid, except where the resident contractor is eligible for a California small business preference, in which case the preference applied shall be the greater of the two, but not both. If the contractor submitting the lowest responsive bid is not a California company and has its principal place of business in any state that gives or requires the giving of a preference on its public entity construction contracts to contractors from that state, and if a California company has also submitted a responsive bid, and, with the benefit of the reciprocal preference, the California company's bid is equal to or less than the original lowest responsive bid, the public entity shall award the contract to the California company at its submitted bid price.