Council Panel OKs ‘Buy American’ Rule : Business: Charter change would give domestic firms preference on local contracts.

Los Angeles would create a local version of the “Buy American” movement under a proposed City Charter amendment approved Friday by a City Council committee.

The measure, proposed by City Councilman Zev Yaroslavsky, would grant bid preference to domestic firms competing for local contracts--a practice already followed by dozens of cities and more than half the states in the nation.

The proposal, which would require voter approval in the June election, also seeks to establish a minimum domestic content requirement for city purchases and to prohibit the development of bidding specifications that favor foreign firms.

Unanimously approved by the Rules and Elections Committee, the proposal must be approved by the full City Council by Feb. 12 in order to meet the deadline for the June 2 ballot.

The “Buy American” pitch has been used in an effort to boost domestic sales in the auto, agriculture and apparel industries--especially during economic downturns. Now Yaroslavsky wants Los Angeles to join a spate of similar campaigns being considered by state and county officials for transportation and public works projects ranging from mass transit lines to sewage treatment plants.

“It is our responsibility to protect our job-creating industries,” Yaroslavsky said, “and it would be a horrible mistake for the public sector to accelerate the manufacturers’ plight by turning our backs on them.”

Yaroslavsky’s proposal follows the Los Angeles County Transportation Commission’s recent decision to award to Japanese-owned Sumitomo Corp. of America a $128-million contract to build driverless cars for the Metro Green Line.

The LACTC, which canceled the contract after an outburst of public discontent, is seeking state legislation that would give bid preference to county businesses.

The City Council committee’s action came shortly after Japanese officials--concerned about the Sumitomo rejection--reminded the Bush Administration that international trade agreements require the U.S. government to inform localities of the importance of awarding contracts without regard to nationality.

Twenty-eight states have laws giving preference to American-made products. Although California’s general “Buy American” law was struck down in the 1960s, the state still gives preference when economically feasible to foods grown and processed in the United States. And state officials are now considering a bid preference for California firms, as well as a requirement that at least 51% of the parts and supplies purchased by the state be made in the United States. Another proposal would require that 50% of the workers on any public works project live within the state, officials said.

Los Angeles has no such requirements and is, in fact, constrained by the City Charter to award contracts to the lowest and best responsible bidder.

“The city should be a help to our economy, not a drain on it, by taking into account the impact its purchases will have on the local and regional economy,” Yaroslavsky said. “The only way we can legally do that is change the charter.”

As it stands, the city buys motor vehicles, helicopters, computers, steel, transformers and electrical cables from foreign firms and domestic companies with manufacturing plants overseas--despite the recession and a county unemployment rate of 8.3%.

Some city officials said Yaroslavsky’s concept is worth serious consideration. But they cautioned that city ordinances crafted under the proposed charter changes must ensure that the city would get the best material and services.

For example, certain equipment at the Hyperion Waste Water Treatment Plant in Playa del Rey was manufactured in Europe, where such technology is more advanced than in the United States, city officials said.

Beyond that, Anthony Riolo, director of purchasing for the city, questioned whether the proposal would be legal under a 1969 California Supreme Court decision that killed an earlier attempt to forge a “Buy American” policy in Los Angeles. The court ruled that forcing purchase of only American goods was illegal because it “interfered with foreign trade.”

“I anticipate a lot of legal fights to occur if this passes,” Riolo said.

But Assistant City Atty. John Haggerty said the state Supreme Court decision is not necessarily an obstacle because the U.S. Supreme Court has ruled that states and municipalities are not prohibited from favoring local citizens in contracts and procurements.

“We are not saying to the world, ‘You cannot buy foreign goods,’ ” Yaroslavsky explained. “We are saying when we decide to enter the marketplace for helicopters and pencils we will decide what products are in our best interest.”

In a related effort to ease the recession, Mayor Tom Bradley has asked the city Board of Public Works to determine whether construction of large scale-projects already approved by voters can be accelerated to increase the number of local jobs.

Projects involving more than $516 million in voter-approved bond measures are awaiting construction, including the Central Library, city waste and storm-water systems, police facilities and the expansion of the Convention Center.

“These projects, which are or will be built by private construction firms under contract with the city, provide hundreds of jobs and infuse hundreds of millions of dollars into our local economy,” Bradley said in a letter sent Wednesday to Felicia Marcus, president of the Board of Public Works.

In a separate letter Monday, City Controller Rick Tuttle asked the city engineer to determine how best to remove impediments to certain projects.