COMMITTEE AGENDA MEMORANDUM
Board Policy and Monitoring Committee
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: title
Receive Information on Valley Water’s Small Business Enterprise (SBE) Program; Discuss Staff Recommendations for SBE Program Enhancements; and Recommend SBE Program Enhancements for Full Board Consideration.
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RECOMMENDATION: Recommendation
A. Receive information on Valley Water’s Small Business Enterprise (SBE) Program;
B. Discuss staff recommendations for SBE Program enhancements;
C. Recommend SBE Program enhancements for full Board consideration.
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SUMMARY:
On July 25, 2026, Director Shiloh Ballard requested that the Board refer an assessment of Valley Water’s Small Business Enterprise (SBE) policy to the Board Policy and Monitoring Committee (BPMC), following the award of the Coyote Creek Flood Protection Project and Anderson Dam contracts, for which the 30% SBE goal was not met despite the contractors’ submission of good-faith-effort documentation. The Board granted the referral.
The SBE policy is a Board policy adopted via two ordinances in October 2023. Changes to the policy, beyond any statutory changes, must be adopted by the Board.
Background:
On September 26, 2023, the Board adopted two ordinances updating Valley Water’s Small Business Enterprise (SBE) Program. The Board adopted Ordinance No. 23-03 to establish an SBE Outreach Program policy for construction contracting and adopted Ordinance No. 23-04 to rescind and replace Ordinance No. 04-01 for professional consultant services. Together, these actions updated Valley Water’s SBE policy framework and directed staff to establish implementing procedures for construction and professional consultant services.
Ordinance No. 23-03 - Construction Contracting
Ordinance No. 23-03 established procedures for the SBE Outreach Program for construction contracting. The construction program establishes eligibility standards for firms seeking an SBE preference, a 30% small-business subcontracting participation goal, and a bid-preference structure for certified SBE bidders and non-SBE bidders that subcontract with certified SBEs. A certified SBE prime bidder may receive a 5% preference, up to $150,000.
Non-SBE bidders may qualify for a preference based on the percentage of work subcontracted to certified SBEs. For bids below $3 million, bidders subcontracting 30%-39% of the work to SBEs receive a 3% preference; bidders subcontracting 40%-49% receive a 4% preference; and bidders subcontracting 50%-100% receive a 5% preference. For bids of $3 million or more, the corresponding preferences are $90,000, $120,000, and $150,000, respectively.
The preference is used only to evaluate bids and determine the lowest responsible bidder; the contract is awarded at the bidder’s original bid amount.
Ordinance No. 23-04 - Professional Consultant Services
Ordinance No. 23-04 rescinded and replaced Ordinance No. 04-01 for professional consultant services. Ordinance No. 04-01 had implemented a 5% small-business preference for professional consultant services and allowed firms that committed at least 30% of the work to SBEs to qualify for a preference ranging from 3% to 5%.
Ordinance No. 23-04 updated Valley Water’s policy to reflect statutory changes to Public Contract Code section 2002 and directed staff to incorporate the Board-adopted policy into the SBE Outreach Program guidelines and related administrative procedures for professional consultant services. The ordinance continues Valley Water’s commitment to maximizing small-business participation while preserving the qualifications-based selection process applicable to professional consultant services.
Good Faith Efforts
Both Ordinance No. 23-03 for construction contracts and Ordinance No. 23-04 for professional consultant services include Good Faith Effort (GFE) requirements. A non-SBE bidder that does not meet the 30% subcontracting goal must demonstrate adequate GFE to be considered responsive for a solicitation. Valley Water considers only documented efforts completed before bid opening and does not consider pro forma efforts sufficient.
Valley Water requires bidders to demonstrate timely, meaningful outreach to certified SBEs. This includes identifying work scopes that create genuine SBE participation opportunities; advertising for SBE subcontractors, suppliers, and vendors; and providing written notice to certified SBEs before bid opening. Valley Water requires bidders to contact a sufficient number of certified SBEs in each applicable work category.
Valley Water also requires bidders to follow up with firms contacted and provide documentation of their outreach and responses. Valley Water reviews the submitted GFE documentation as part of its bid evaluation to determine whether the bidder made adequate efforts to meet the SBE participation goal.
With an eye towards optimization and achieving policy objectives, staff will provide BPMC members with a brief history of Valley Water’s SBE policy and program, the program’s success over the past few years since the adoption of the ordinances, barriers to SBE participation, benchmark research based on comparator agencies, and recommendations for policy enhancements.
ENVIRONMENTAL JUSTICE IMPACT:
The recommended action does not constitute a project under CEQA because it does not have the potential for resulting in direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS:
Attachment 1: SBE BPMC PowerPoint
UNCLASSIFIED MANAGER:
Manager
Tony Ndah, 408-630-2208