Council to Draft a City ‘Buy American’ Policy : Economy: Measure would give domestic firms preference in contracts. It would be on June 2 ballot.

Jumping into the nationwide “Buy American” movement, the Los Angeles City Council on Wednesday ordered the drafting of a City Charter amendment allowing the city to give domestic firms bid preference on local contracts.

The measure, similar to proposals being considered by state and county officials, would also establish a minimum domestic content requirement for city purchases and prohibit bidding specifications that favor foreign firms.

The proposed charter amendment, suggested by City Councilman Zev Yaroslavsky, comes as California and Los Angeles County are experiencing an exodus of manufacturing jobs and suffering from the resulting economic and social problems.

“We can invest in ourselves or sell ourselves out,” Yaroslavsky said after the council voted unanimously to have the city attorney draft the measure. “This proposal would give us the legal vehicle we need to invest in ourselves.”

The proposal, which would require voter approval in the June 2 election, was deliberately left vague so the City Council could later pass ordinances establishing guidelines tailored to individual projects and prevailing economic conditions.

“The details shouldn’t be spelled out in a document that can only be changed twice a year,” Yaroslavsky said. “There may be things we didn’t anticipate, mistakes we made, percentages we want to change. The charter amendment will enable us to react quickly and effectively to any change in circumstances.”

However, a report prepared by the city administrative officer cautioned that the proposal’s ability to provide jobs must be balanced against what it could cost the city to implement additional procurement requirements.

For example, the proposal may require increased staffing--and result in costly delays--to determine whether preferred bids would conflict with an array of existing policies governing procurement of goods and services, the report said.

In addition, even determining what “constitutes a California or Los Angeles County firm or product of significant domestic content may be difficult to define and administer for compliance purposes,” the report said.

Yaroslavsky said the benefits of implementing the proposal would eventually outweigh the costs.

With unemployment in Los Angeles County at 8.3%, the council’s action aims to encourage businesses to stay or locate in Southern California by sweetening the pot with the promise of favored status on city projects.

“Los Angeles is a major purchaser of goods and services. So is the county. So is the state,” Yaroslavsky said. “If all of us were to work together . . . under this kind of legislation it would have an impact on the marketplace and on jobs in Southern California.”

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

The LACTC, bowing to public concerns over rising unemployment in Southern California, canceled the contract and is seeking state legislation that would give bid preference to county businesses.

The actions by the LACTC and the City Council are part of a nationwide trend fueled in recent weeks by outrage over comments made by Japanese officials about American workers. So far, 28 states and dozens of cities have enacted laws giving preference to American-made products.

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.

Los Angeles has no such requirement and, in fact, is required under the City Charter to award contracts to the lowest and best responsible bidder.

So the city buys motor vehicles, helicopters, computers, steel, transformers and electrical cables from foreign countries and from domestic firms whose manufacturing plants are based overseas, Yaroslavsky said.

The Sanitation Department has more than a dozen Toyota four-wheel-drive vehicles, the Los Angeles Police Department owns French-made helicopters and the city fleet includes dozens of foreign trucks, pickups, parking enforcement vehicles and beach cruisers, he said.

The charter amendment requested by the council Wednesday “would change that,” Yaroslavsky said.

“It would not prohibit us from buying foreign goods, or force us to go only domestic,” Yaroslavsky said. “It would allow us to give preference to companies that produce here at home.”

Such talk has Japanese officials concerned.

“We have not had an opportunity to study the implications of this,” said Brian Swords, senior aide for economic affairs at the Japanese Consulate in Los Angeles. But “if decisions are made along non-business lines, it is not the healthiest situation for business.”

The City Council’s action comes after after Japanese officials 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.

One section of General Agreement on Tariffs and Trade, the principle governing international trade, prohibits governments from discriminating on the basis of nationality when awarding contracts. However, the clause applies only to federal governments, not municipalities, so local governments’ “Buy American” policies do not violate the treaty.