Committee advances overhaul of Chapter 14B to set 40% citywide LBE goal, moves ordinance to full Board

Supervisor David Chiu introduced a comprehensive ordinance, co‑sponsored with Mayor Edwin M. Lee, to revise Chapter 14B of San Francisco’s Administrative Code and expand Local Business Enterprise (LBE) participation in city contracting. The committee passed amendments and advanced the ordinance to the full Board as a committee report.

Chiu told the committee the package would establish a citywide small‑business utilization goal of no less than 40%, create a 20% subgoal for micro‑LBEs, require departments to make good‑faith efforts to obtain three bids from local businesses for covered contracts, add a 2% bid discount for LBEs on certain larger procurements, expand coverage to projects requiring development agreements approved by the Board, raise certification thresholds in specified industries, and create a mentor‑protégé program to foster partnerships between established contractors and local firms. “As we had initially proposed, it has a number of major reforms to chapter 14B, including establishing a citywide goal for small business utilization of no less than 40%,” Chiu said.

Chiu said non‑substantive clarifying amendments would be made (for example, separating SBA LBEs from the aspirational 40% goal and setting a 20% micro‑LBE subgoal) and that the City Administrator and contract monitoring staff would promulgate rules and regulations if the ordinance is approved. He also asked the City Administrator to convene a working group to investigate barriers to LBE participation in certain industries (including architecture) and requested several matters for future study by July next year (prompt payment program, expansion of LBE participation in leases/concessions).

Public commenters representing the Coalition for Economic Equity and the Lawyers’ Committee for Civil Rights expressed support while flagging areas for further work. Orin Selstrom (Lawyers’ Committee for Civil Rights on behalf of the Coalition for Economic Equity) said the ordinance contained “aggressive citywide goals” and supported additional studies but raised concerns about LBE architects and CMD’s authority over selection panels. Alex Chu (Coalition for Economic Equity) urged stronger anti‑retaliation remedies and clarity on the government code provisions' applicability to contractors. Small business owner Darylyn Davis asked that the Community Development department be given responsibility for developing rules and that the LBE Advisory Committee have a more meaningful role in rule development and panel‑selection guidelines.

Supervisor Chiu moved the amendments he circulated and, without objection, the committee passed the amendments and forwarded the ordinance to the full Board as a committee report for Tuesday’s meeting.