Board splits on new small-business preference; SBA LBE provisions sent for further review

The San Francisco Board of Supervisors on Tuesday approved changes to the city's Local Business Enterprise (LBE) contracting rules but removed and set aside the portion that would create a new "SBA LBE" category offering a 2% bid preference to certain small-but-not-micro local firms.

The change to the administrative code that would create a third preference category passed in part: the ordinance's provisions other than the SBA LBE section were approved in a roll call vote, 10-0. Supervisors then voted, 7-3, to sever and continue separate consideration of the SBA LBE provisions so the Land Use Committee and sponsors can take additional input from small businesses and the Human Rights Commission.

Why it matters: The ordinance would keep the existing 10% bid preference for micro and small LBEs and add a secondary 2% preference for a proposed SBA LBE category that would apply only if micro or small LBEs do not win a contract. Supporters say the new category is intended to keep more city contracts in San Francisco during a weak economy. Opponents, including small-business advocates and some supervisors, warned the new category could create a "new universe" of beneficiaries that might divert attention and scarce enforcement resources away from the city's smallest, often…