Long awaited legislation supporting small business
gets Mayor's signature
By Aldrich M. Tan
May 12, 2006
Mayor Gavin Newsom signed an ordinance Thursday afternoon that
gives small businesses a fair chance in competing for public contracts.
Sponsored by Supervisor Fiona Ma, the Small Business Enterprise
Ordinance aims to end discrimination in all aspects of public
contracting in the city by giving the Human Rights Commission
the power to centralize public contracting and make sure small
local businesses are part of public contracting process.
"This has been a long and arduous process," Newsom
said, "but the greatest challenge now is to make the ordinance
The legislation took many months to get to the Mayor's Office
since its introduction at the Rules Committee on May 3, 2005.
The ordinance finally passed the Board of Supervisors on May 2,
"I had many committee hearings regarding the ordinance,"
Ma said. "It was important to bring everyone involved to
the table and find a compromise."
Discrimination based on business size continues to occur during
the public contracting process, said commissioner Nazly Mohajer
from the Human Rights Commission. Mohajer said she will also be
co-chair of the Disadvantaged Business Enterprise, which the legislation
"Smaller businesses have fewer resources available to them
than larger businesses," Mohajer said.
Through the legislation, small business contractors will receive
10 percent discount for the purposes specifically of bidding for
contracts but will be paid full price once the contract is accepted,
Mohajer said. City departments will go directly to the Human Rights
Commission to develop bids for city contracts.
"The city will have a centralized resource for city contracts
negotiations," commission chair Malcolm Heinicke said.
For projects less than $1,000, city departments will select from
three small business contractors through the Commission's microbusiness
program, Mohajer said.
"The contracts will still be awarded based on merit,"
The Human Rights Commission must certify that the business meets
the requirements of being certified as a small business before
contractors can participate in the bid process, Heinicke said.
The ordinance also provides a stable steady funding stream for
the Human Rights Commission to oversee the ordinance, Heinicke
said. It would receive funding from the city departments as an
overhead expense for the contract agreements. The percentage varies
based on the size of the contract.
The Human Rights Commission will use the overhead money to increase
its staffing and fund other expenses that help increase the organization's
oversight of the program, Heinicke said.
"The Human Rights Commission is committed to making sure
that the community is aware about the advantages of this program,"
Every entity of the city has to participate in this program,
city administrator Ed Lee said.
"This legislation continues the pledge that we will get
to equality in city businesses," Lee said.
In April 2, 1984, the Board of Supervisors passed an ordinance
that combated public contracting discrimination against minority-
and women-owned businesses, which were virtually excluded as city
Proposition 209, passed in 1996, prohibited preferential treatment
of any individual or group on the basis of race, sex, color, ethnicity,
or national origin in the operation of public employment, public
education, or public contracting, said Aileen Hernandez, chair
of the Coalition for Economic Equality.
Even though the legislation itself cannot say that it protects
the rights of minority- and women-owned businesses, the ordinance
guarantees the employment of diverse local businesses, Hernandez
"Women and racial minorities happen to own most of the small
businesses in San Francisco," Hernandez said.
The legislation's passing is only the beginning, Hernandez said.
Discussions will continue to develop the policies needed to implement
"We've got the skeleton but now we have got to put skin
on the bones," Hernandez said.
The Small Business Enterprise Ordinance went through both the
Small Business Commission and the Rules Committee and several
times to the Board of Supervisors before it was passed on first
reading April 25, 2006.