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companies able to deliver by date requested by staff, then the City may award the <br /> contract to the Pleasanton-based company. <br /> A local business would be defined as a business with a physical location in Pleasanton, <br /> a city business license, and which reports the City of Pleasanton as the point-of-sale to <br /> the State Franchise Tax Board.4 <br /> This tie bid local preference does not create any additional costs for the purchase of <br /> supplies and equipment. The City would receive a sales tax benefit, as well as <br /> increased local economic activity. <br /> 2. Local Bid Calculation Preference of 5% up to $5,000. A bid calculation preference is <br /> when suppliers, vendors or contractors submit bids for supplies, equipment, and trade <br /> services, and a local preference / reduction is applied when comparing the bids. Here <br /> are two examples: <br /> Example 1 5% local bid Example 2 5% local bid <br /> Bid Amount preference Bid Amount preference <br /> Pleasanton- $49,895 $100,000 <br /> based company $52,500 low bidder $105,000 low bidder with tie <br /> bid preference <br /> Modesto-based $51,000 $51,000 $100,000 $100,000 <br /> company low bidder low bidder <br /> In Example 1, the application of the proposed 5% local bid calculation preference <br /> results in the Pleasanton-based company having the lowest bid. The local company <br /> benefitted from a $2,605 bid calculation preference, which amount is within the <br /> proposed $5,000 limit per transaction <br /> In Example 2, the application of the proposed 5% local bid calculation preference <br /> results in a tie bid, so the tie bid local preference would be applied to award the contract <br /> to the Pleasanton-based company. <br /> Note: The City would still be paying the actual bid amounts in Example 1 of $52,500 and <br /> Example 2 of $105,000, so while the supplies, equipment or trade services being <br /> purchased create a sales tax benefit to the City of 1% x $52,000 = $520 and 1% x <br /> $105,000 = $1,050 as well as additional stimulus to the local economy, the City would <br /> still pay more to the Pleasanton-based business rather than the Modesto-based <br /> business using the original bid amounts. Staff cannot clearly estimate how many bid <br /> situations might arise when the local bid calculation preference or tie bid will be a <br /> deciding factor. <br /> See Attachment 1, §3.28.020.C.3.c. <br /> Page 3 of 4 <br />