|
DATE: |
June 24, 2025 & August 26, 2025 |
12 |
SUBJECT
Title
APPROVE AMENDMENTS TO AND SUNSET OF BOARD POLICIES RELATED TO ECONOMIC PROSPERITY AND PROCUREMENT AND ADOPT AN ORDINANCE AMENDING ARTICLE XXIII OF THE SAN DIEGO COUNTY CODE OF ADMINISTRATIVE ORDINANCES RELATING TO COUNTY CONTRACTING (6/24/2025 - FIRST READING; 8/26/2025 - SECOND READING UNLESS ORDINANCE IS MODIFIED ON SECOND READING) (DISTRICTS: ALL)
Body
OVERVIEW
The County of San Diego (County) is committed to building a more inclusive and resilient regional economy, especially through supporting the prosperity of small businesses, nonprofits and community-based organizations. This is achieved through a variety of programs and services, and through leveraging its purchasing power. The County spends over $2 billion annually on contracts.
On April 30, 2024 (12), the Board directed staff to explore ways to expand the County’s reach to local businesses through outreach and education, reviewing current programs to enhance local business participation in County procurements, and aligning with California Assembly Bill 2019 (2022) to support small and disadvantaged business enterprises. On August 27, 2024 (22), the Board further directed the Chief Administrative Officer to evaluate the County’s use of State and federal business certifications and report back on recommendations, including formalizing local participation requirements for County contracts, increasing the local business preference policy, establishing a small business advancement policy, creating a technical assistance program, and funding an insurance and bonding assistance program.
To ensure these efforts to expand economic opportunity are inclusive and community-informed, the County launched a multi-phase community engagement strategy. This initiative gathered input from business owners, nonprofits, and community leaders on how to strengthen the County’s role in supporting local economic development, especially through procurement. Nearly 400 organizations representing broad and diverse communities, including veteran-owned businesses, nonprofits, small businesses, economic development and business support organizations participated in surveys, workshops, stakeholder meetings, and webinars.
Incorporating community feedback, the County has been advancing changes to better support small and local businesses. Key efforts include the creation of a dedicated Small Business Development Unit with a dedicated Small Business Manager to serve as a liaison, expanded technical assistance to help small businesses navigate the County’s procurement processes, and the development of new and innovative programs designed to meet the needs of diverse business communities.
California AB 2019, signed into law in 2022, was written to support small business enterprises across California. Among other initiatives, AB 2019 requires a State small business liaisons to develop economic equity action plans, codifies the State’s goal of 25% procurement participation for small businesses, tasks the Office of Small Business and Disabled Veteran Business Enterprise Services with recommending simplified procurement procedures to increase opportunities for small and micro businesses, while encouraging those enterprises which are minority-owned, women-owned, and LGBTQ+-owned businesses, and allows small businesses to self-identify as being minority-, woman-, or LGBTQ+-owned to also have increased access to procurement opportunities.
Today’s recommended updates and improvements already made at the staff level align with the provisions of AB 2019. The County’s engagement efforts conducted over the past year have informed the work outlined in this Board Letter and may serve as the foundation for an economic equity action plan. Today’s recommendations simplify several procurement procedures, which would increase opportunities for small, minority-owned, women-owned, and LGBTQ+-owned businesses to help us achieve the 25% small business participation goal. County staff recently bolstered efforts to encourage higher rates of participation in the self-identification process. These demographic metrics will be used for annual analysis of the effectiveness of all these efforts and will guide the County’s outreach strategies, program development, and improvements to procurement. While the recommended actions in this Board Letter align the County to AB 2019, there is still more that can be done. County staff will continue to proactively review implementation strategies of other counties and return to the Board with further recommendations.
Today’s actions require two steps. On June 24, 2025, the Board is requested to approve the introduction of an Ordinance amending Article XXIII of the San Diego County Administrative Code relating to County contracting (first reading). If the Board takes actions as recommended, then, on August 26, 2025, the Board is requested to consider and adopt the Ordinance (second reading, unless the ordinance is modified on the second reading). Additionally, today’s actions request that the Board approve amendments to Board Policies related to economic prosperity and procurement to be effective on September 25, 2025.
• A-71 - San Diego County Economic Development
• A-87 - Competitive Procurement
• B-53 - Small Business Policy
• B-39a - Veteran-Owned Businesses (VOB) and Disabled Veterans Business Enterprise (DVBE) Program
• B-67 - Environmentally Preferable Procurement
Today’s actions further request the Board to sunset several Board Policies related to County procurement that have been consolidated into the language of other existing policies.
• A-137 - Environmentally Responsible Use of Copy and Printing Paper
• F-40 - Procuring Architectural, Engineering, and Related Professional Services
• F-47 - Procuring Professional Services to Assist with County Acquisition and Leasing of Real Property
RECOMMENDATION(S)
CHIEF ADMINISTRATIVE OFFICER
On June 24, 2025:
1. Approve the introduction of the Ordinance (first reading), read the title, and waive further reading of the Ordinance:
AN ORDINANCE AMENDING ARTICLE XXIII OF THE SAN DIEGO COUNTY CODE OF ADMINISTRATIVE ORDINANCES RELATING TO COUNTY CONTRACTING
If, on June 24, 2025, the San Diego County Board of Supervisors takes action as recommended, then on August 26, 2025:
1. Consider and adopt (unless the ordinance is modified on second reading):
AN ORDINANCE AMENDING ARTICLE XXIII OF THE SAN DIEGO COUNTY CODE OF ADMINISTRATIVE ORDINANCES RELATING TO COUNTY CONTRACTING
2. Approve the amendments set forth in Attachments D - M to the following Board Policies to be effective September 25, 2025, and, except for Board Policy A-71, set a sunset review date for these Board Policies of December 31, 2032:
• A-71 - San Diego County Economic Development
• A-87 - Competitive Procurement
• B-39a - Veteran Owned Business (VOB) and Disabled Veterans Business Enterprise (DVBE) Program
i. Board Policy B-39a to be renamed Veteran Owned Business (VOB) and Disabled Veteran Business Enterprise (DVBE) Program
• B-53 - Small Business Policy (SBP)
i. Board Policy B-53 to be renamed to Board Policy B-53 Small-Local Business Policy (SLBP)
• B-67 - Environmentally Preferable Procurement
3. If recommendation #2 is approved, sunset the following Board Policies effective September 25, 2025:
• A-137 - Environmentally Responsible Use of Copy and Printing Paper
• F-40 - Procuring Architectural, Engineering, and Related Professional Services
• F-47 - Procuring Professional Services to Assist with County Acquisition and Leasing of Real Property
4. Direct the Chief Administrative Officer to report back annually in September of each year on the progress and outcomes achieved in the prior fiscal year.
EQUITY IMPACT STATEMENT
Revisions to policy documents will reinforce equity, expand opportunities for small-local businesses, and reduce barriers to participation. Today’s actions to approve and adopt changes to procurement-related policies and Administrative Code sections will enhance equity and community strength and are a major step toward expanding opportunities for small-local businesses to participate in County contracting.
SUSTAINABILITY IMPACT STATEMENT
Today’s actions align with the County of San Diego’s (County) Sustainability Goal #1 to engage the community in meaningful ways and continually seek stakeholder input as the recommendations reflect what was heard during numerous community engagement activities and listening sessions with the business community. In addition, the proposed policy changes align with the County’s Sustainability Goal #2 to provide just and equitable access to County contracting by simplifying current procurement policies, increasing procurement authority limits, and expanding the County’s local business preference.
Additionally, the proposed changes to Board Policy B-67 align with the County’s Sustainability Goal #7 by promoting responsible purchasing practices that reduce pollution, waste, and resource consumption. These updates reflect a broader commitment to considering the full life cycle impacts and costs of County purchases - enabling the County to lead by example in minimizing environmental harm, reducing exposure to harmful products, and promoting fiscal and social responsibility.
FISCAL IMPACT
If the proposed increase to the local preference program from the currently established 5% (not to exceed $50,000) to 15% (not to exceed $150,000) is approved and implemented, the potential increased contract costs are estimated to be around $1.3 million. The actual costs incurred would depend upon the outcomes of specific bids, with a maximum preference ceiling of $150,000 per procurement. Existing departments funding sources will be used to pay for associated increased contract costs. There will be no change in net General Fund costs and no additional staff years.
BUSINESS IMPACT STATEMENT
The County of San Diego (County) encourages the participation of small-local businesses in County contracting opportunities. Today’s actions to approve and adopt changes to procurement policies will enhance equity and community strength and are a major step toward expanding opportunities for small-local businesses. By achieving the program's goal of directing 25% of County approximate annual procurement spend of $2 billion to small-local businesses, approximately $500 million per year would remain in San Diego County.
Details
ADVISORY BOARD STATEMENT
N/A
BACKGROUND
The County of San Diego (County) is committed to building a more inclusive and resilient regional economy - one where small businesses, nonprofits, and community-based enterprises have opportunities to grow and thrive. The State Employment Development Department estimates there are over 123,000 small businesses in the region, representing approximately 98% of all businesses. Small businesses are the backbone of our local economy and a key driver of job creation, innovation, and community stability.
The County proactively supports businesses and employers in complying with labor laws, elevating working conditions, and offering trainings and consultations in creating labor law compliant systems. Through grant funding, strategic partnerships with economic development and business support organizations, the County also creates economic opportunities, promotes equity, and supports small businesses on topics from contracting to succession planning.
Beyond programs and services, the County supports economic development through the choices it makes as a significant economic player. With more than $2.2 billion spent across 3,370 contracts in Fiscal Year 2023-24, the County has an opportunity to leverage this contract spending power to strengthen the local economy and expand access for small businesses, nonprofits, and diverse suppliers. Recognizing this opportunity, on April 30, 2024 (12), and August 27, 2024 (22), the Board approved actions to strengthen procurement and contracting by directing the Chief Administrative Officer to:
• Explore strategies to expand opportunities for local businesses to participate in County contracts.
• Provide recommendations to:
o Formalize local participation in County contracts.
o Improve methods to identify local small businesses, including nonprofits, for participation in County contracts.
o Increase the local business preference.
o Establish a small business advancement policy.
o Create a comprehensive technical assistance program to support local small businesses, including non-profits.
o Develop an insurance and bond assistance program to support local small businesses, including non-profits.
To ensure that efforts to expand economic opportunity are inclusive and community-informed, the County launched a multi-phase community engagement strategy. This initiative gathered input from business owners, nonprofits, and community leaders from across the region on how to strengthen the County’s role in supporting local economic development, especially through procurement. Nearly 400 organizations representing broad and diverse communities, such as veteran-owned businesses, nonprofits, small businesses, economic development and business support organizations were contacted and participated in surveys, workshops, stakeholder meetings, and webinars. In the initial phase which started in the summer of 2024, over 200 individuals responded to a Business Contracting Survey and staff met with more than 25 organizations in key stakeholder discussions. The feedback helped identify common themes including the importance of transparency and sustained communication with small businesses and community stakeholders; the need for more tailored technical assistance to navigate complex procurement systems; and insurance requirements being a barrier for many to participate.
In April 2025, a robust engagement effort was implemented to dive deeper and focus on gathering input on how the County can better leverage its spending power in a way that further engages and supports the economic prosperity of small businesses, nonprofits, and community-based enterprises. Over 420 individuals signed up for virtual stakeholder meetings, and 22 organizations participated in key stakeholder discussions to share their thoughts. The feedback reinforced previous themes and provided valuable insights on how the County can update its procurement guidelines to improve access, simplify participation and ensure more inclusivity and accountability. A detailed Community Engagement and Findings report can be found in Attachment N.
Reflecting on this feedback, the County has been working to implement impactful changes. In December 2024, the Small Business Development Unit with a dedicated Small Business Manager was created in the Office of Economic Development and government Affairs (EDGA). The Small Business Manager serves as a liaison with the small business community and collaborates with multiple departments and external partners to develop and implement programs that provide technical assistance, facilitate procurement opportunities, and foster a supportive ecosystem for small businesses. To further address specific feedback on technical assistance needs, the County partnered with the Small Business Development Center and APEX Accelerator to provide workshops, one-on-one support, and outreach events to support small businesses, nonprofits and community-based organizations who want to do business with the County. This program, also referred to as Support, Training, and Education for Procurement or STEP, has been expanded to provide more support navigating the BuyNet system, which was repeatedly shared as a barrier. The outreach events now include a ‘BuyNet Lab’ with staff available to help enroll businesses and troubleshoot issues. Improved metrics and data collection for the STEP program will help the County assess impact and outcomes as well as be better poised to make data-informed decisions about the program.
Hearing the concerns about bonding and insurance requirements of County contracts, the Bonding and Underwriting Insurance for Local Development (BUILD) program was developed. BUILD offers direct support and financial resources to small business who are ready to contract with the County but are unable to afford the bonding and/or insurance requirements. It is anticipated that this program will launch in the summer of 2025, along with the Compliance, Operations and Readiness Education (CORE) program. CORE program aims to prevent labor violations and promote fair business practices by providing small businesses and nonprofits across San Diego County with expert-led administrative and bookkeeping assistance. The STEP, BUILD, and CORE programs are the first in EDGA's new suite of small business assistance programs, structured to support small businesses through their life cycle.
Feedback highlighted that the businesses did not feel they were provided enough time to respond to solicitations. The County is now proactively compiling lists of contracts and services anticipated to be procured within the next six months and posting that list publicly. The goal of this list is to serve as a planning tool for businesses to forecast potential opportunities and gather earlier insights. Updates on activities to address the business community feedback have been provided to the Board in memorandums on July 29, 2024, and October 25, 2024. Additional updates are detailed in Attachment O.
To formalize the County’s commitment to advancing the economic prosperity of small businesses, nonprofits, and community-based enterprises, and to strengthen the region’s overall economic health, the County is working towards the goal of directing 25% of the County’s annual contracting spend to small, local businesses. This aligns with the California Assembly Bill 2019 goal. This target reflects not only the County’s values, but the strategic role local businesses play in creating jobs, building community wealth, and driving inclusive economic development. Reaching this goal requires meaningful changes to how the County does business. In response to what was heard from the community, updates to the internal procurement guidelines are being recommended to reduce barriers, increase access, and make it easier for small and local businesses to successfully work with the County.
Currently, Board Policy B-53, Small Business Policy, facilitates the successful participation of small businesses in county procurements; however, small businesses are narrowly defined as small businesses with certain State certifications. To broaden access and expand economic opportunity, it is recommended that the definition be updated to include nonprofits; veteran-owned and disabled veteran-owned businesses; businesses with other recognized small business certifications; and those that meet the criteria for certification, even if they are not yet certified. This expanded definition opens the door for a wider range of businesses to compete for and benefit from County contracting opportunities. The updated policy will also prioritize local businesses, further aligning contracting practices with the County’s economic development goals.
Building off this change, increasing the small-local business preference from 5% to 15% and raising the cap from $50,000 to $150,000 will help our business community better compete with larger companies. This change means small-local businesses would have their proposed price be evaluated as if they were 15% less than the actual proposed price. For larger procurements, prime contractors on public works projects over $1 million would be required to subcontract at least 3% of the total contract value with small-local businesses. For services contracts over $1 million annually, the same 3% subcontracting target would be encouraged. Exceptions may apply in both cases.
Many of the County’s procurement processes can be complex and time-intensive, however there are simpler, faster procurement processes such as the Request for Quotation (RFQ). By increasing the dollar amount for these types of simpler processes, more contracts would be awarded through these methods which are typically quicker, more straightforward, and less costly for businesses and nonprofits to participate in. This reduces the time and resources needed to compete for County contracts, especially when compared to more formal processes such as the Requests for Bids (RFB) or Requests for Proposals (RFP). Currently, when a procurement is specifically set aside for small businesses and veteran owned businesses, the simpler processes can only be used if the contract is $100,000 or less. The proposed policy change would increase this limit to $1 million annually when contracting with small local businesses, further expanding the opportunities for this streamlined process.
As part of the County’s commitment to environmental stewardship and responsible governance, we are also proposing updates to Board Policy B-67, Environmentally Preferable Procurement. While these changes may not directly focus on small businesses, they reflect that economic prosperity and environmental responsibility go hand in hand. Updates to Board Policy B-67 provides clearer guidance for the County to select products and vendors that are environmentally responsible. Examples include prioritizing reusable or refurbished items, products free of harmful chemicals, and energy-efficient goods. By implementing these considerations, the County can incorporate more sustainable purchasing practices in its daily operations.
This is just the beginning of the County’s continued commitment to advancing economic prosperity in the region. The County will continue engaging and building on what has been shared by community members, small businesses, nonprofits, and partners to shape programs that remove barriers and expand access to opportunity. If approved today and at the second reading on August 26, 2025, these policy changes will go into effect on September 25, 2025. Prior to the effective date, County staff will develop tools, guidance, and outreach to ensure businesses understand how to navigate and benefit from these changes. County departments will also be supported in making this shift. To ensure the County remains accountable, a data and metrics framework is being built to transparently track progress and evaluate the impact of these changes on equity and inclusion in the local economy.
The County has a Disadvantaged Business Enterprise (DBE) program for federally funded transportation projects and has a DBE implementation agreement with Caltrans. The County established a 17.2% DBE participation goal for Federal Aviation Administration funded projects. Furthermore, the policy and technical assistance enhancements brought forward in this board letter will advance the County’s support of disadvantaged businesses more broadly and development of an equity action plan. California AB 2019, signed into law in 2022, was written to support small business enterprises across California. Among other initiatives, AB 2019 requires a State small business liaisons to develop economic equity action plans, codifies the State’s goal of 25% procurement participation for small businesses, tasks the Office of Small Business and Disabled Veteran Business Enterprise Services with recommending simplified procurement procedures to increase opportunities for small and micro businesses, while encouraging those enterprises which are minority-owned, women-owned, and LGBTQ+-owned businesses to self-identify as being minority-, woman-, or LGBTQ+-owned, to also have increases access to procurement opportunities. AB 2019 also directs the State to conduct a procurement and contracting disparity study to guide outreach strategies, State government program development, and improvements to contracting policies, with the intent of not violating existing law in Proposition 209.
Today’s recommended updates and improvements already made at the staff level align with the provisions of AB 2019. Today’s recommendations simplify several procurement procedures, which would increase opportunities for small, minority-owned, women-owned, and LGBTQ+-owned businesses to help us achieve the 25% small business participation goal. County staff recently bolstered efforts to encourage higher rates of participation in the self-identification process. These demographic metrics will be used for annual analysis of the effectiveness of all these efforts and will guide the County’s outreach strategies, program development, and improvements to procurement. While the recommended actions in this Board Letter align the County to AB 2019, there is still more that can be done. County staff will continue to proactively review implementation strategies of other counties and return to the Board with further recommendations.
Today’s action requires two steps. On June 24, 2025, the Board is requested to approve the introduction of an Ordinance amending Article XXIII of the San Diego County Administrative Code relating to County contracting (first reading). Amendments to Sections 400-404 are generally administrative and Section 405 is being amended to increase the small-local preference from 5% to 15%. If the Board takes actions as recommended, then, on August 26, 2025, the Board is requested to consider and adopt the Ordinance (second reading unless ordinance is modified on the second reading).
Additionally, the August 26, 2025 actions request that the Board approve amendments to Board Policies related to economic development and procurement to be effective September 25, 2025. These board polices are:
• A-71 - San Diego County Economic Development
• A-87 - Competitive Procurement
• B-53 - Small Business Policy
• B-39a - Veteran-Owned Businesses (VOB) and Disabled Veterans Business Enterprise (DVBE) Program
• B-67 - Environmentally Preferable Procurement
If recommendations to update Board Policies are approved, it is recommended the Board approve the sunset of the following Board Policies effective September 25, 2025 as components of these policies have been incorporated into other policies:
• A-137 - Environmentally Responsible Use of Copy and Printing Paper
• F-40 - Procuring Architectural, Engineering, and Related Professional Services
• F-47 - Procuring Professional Services to Assist with County Acquisition and Leasing of Real Property
LINKAGE TO THE COUNTY OF SAN DIEGO STRATEGIC PLAN
Today’s actions support the County of San Diego’s 2025-2030 Strategic Plan initiatives of Community (Quality of Life), Equity (Economic Opportunity), and Sustainability (Economy) by removing barriers and increasing small-local business and nonprofit participation in contracting opportunities with the County to encourage growth and economic activity locally within San Diego County.
Respectfully submitted,
ebony n. shelton
Chief Administrative Officer
ATTACHMENT(S)
Attachment A - AN ORDINANCE AMENDING ARTICLE XXIII OF THE SAN DIEGO COUNTY CODE OF ADMINISTRATIVE ORDINANCES RELATING TO COUNTY CONTRACTING (Clean copy)
Attachment B - AN ORDINANCE AMENDING ARTICLE XXIII OF THE SAN DIEGO COUNTY CODE OF ADMINISTRATIVE ORDINANCES RELATING TO COUNTY CONTRACTING (Informational copy)
Attachment C - SUMMARY OF PROPOSED ORDINANCE
Attachment D - Board Policy A-71 San Diego County Economic Development (Clean Copy)
Attachment E - Board Policy A-71 San Diego County Economic Development (Strikeout Copy)
Attachment F - Board Policy A-87 Competitive Procurement (Clean Copy)
Attachment G - Board Policy A-87 Competitive Procurement (Strikeout Copy)
Attachment H - Board Policy B-39a Veteran Owned Business (VOB) and Disabled Veteran Business Enterprise (DVBE) Program (Clean Copy)
Attachment I - Board Policy B-39a Veteran Owned Business (VOB) and Disabled Veteran Business Enterprise (DVBE) Program (Strikeout Copy)
Attachment J - Board Policy B-53 Small-Local Business Policy (SLBP) (Clean Copy)
Attachment K - Board Policy B-53 Small-Local Business Policy (SLBP) (Strikeout Copy)
Attachment L - Board Policy B-67 Environmentally Preferable Procurement (Clean Copy)
Attachment M - Board Policy B-67 Environmentally Preferable Procurement (Strikeout Copy)
Attachment N - Enhancing Procurement Policies Community Engagement Report
Attachment O - Enhancing Procurement and Contracting Practices