Deriding it as “performative,” San Francisco Supervisors voted Tuesday to walk back part of its law that prohibits The City from doing business with companies based in states that discriminate against the LGBTQ community, restrict abortion rights, or adopt voter suppression laws.
Enacted in 2016, The City’s law is intended to serve as a rejection of the laws passed across the country that restrict individual liberties. But, in practice, it prohibited The City from contracting with companies — even those owned by women, people of color and LGBTQ people — in more than half the country.
The effect, the repeal’s proponents argue, is less competition for city contracts.
The revision adopted on Tuesday would exclude contracts related to public works projects from the law, referred to by its chapter in city code, 12X.
“I think 12X provides an easy way to pretend like we’re doing something on an issue without actually doing anything at all, and that’s the kind of legislation I can’t stand,” said Supervisor Hillary Ronen. “I think if we’re involved in a national boycott with other cities that’s well thought out that has community support and backing, that’s a great way using our market power to engage and assert our morals and our stand on issues. But that’s not what’s happened with 12X.”
Supervisor Ahsha Safai, who sponsored the legislation, noted city contractors will still have to abide by its nondiscrimination laws following Chapter 12X’s partial repeal. He argued the repeal would increase competition, lower prices, and improve the quality of public works projects in San Francisco.
San Francisco International Airport alone has projects valued at hundreds of millions of dollars planned for 2023, which will now be open to bidding for a broader range of eligible contractors.
Safai’s proposal is relatively narrow, and applies only to public works and improvement contracts. It does not repeal prohibitions on, for example, city-funded travel to states on the banned list.
A separate proposal, sponsored by Supervisor Rafael Mandelman, would repeal all of Chapter 12X in the City’s Administrative code, including the city-funded travel prohibition.
Safai’s proposal passed with support from seven of the board’s 11 members, with Supervisors Shamann Walton, Connie Chan, Dean Preston and Myrna Melgar voting against it.
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Much of the debate Tuesday was over its potential impact on San Francisco businesses, which ostensibly benefit from 12X’s de facto limitation on competition for contracts.
Both Safai and Mandelman’s 12X proposals have raised concerns from local labor organizations.
“We support the intent of the original ordinance and the support that it offers to LGBTQ communities throughout the country. We also agree with the notion of supporting local and California businesses,” Anne Cervantes, founder and co-chair of the San Francisco Latino Black Builders Association, wrote in a letter to Supervisors last month.
Despite its relative economic heft as a City, San Francisco’s laws proved incapable of deterring a litany of states from passing laws that target LGBTQ people and other marginalized groups.
A review of the City law’s impacts by the Supervisors’ Budget and Legislative Analyst last October also called into question its implementation.
“In spite of the new law and the substantial value of the City’s contracts and purchase orders, a system was not established to identify whether departments were complying with the Chapter 12X bans or whether they had issued waivers from the requirements when their contractors and vendors were headquartered in banned states,” the review stated.
More than half of the city’s contracts issued between February 2017 and June 2022 were in states outside California, including some on the banned list, the Budget and Legislative Analyst found.
And by making the pool of potential companies bidding smaller, the report noted, The City is likely spending millions of dollars more on contracts.
The list of states in which The City is prohibited from contracting is regularly updated by the city administrator. Several states were added to the list last fall after they passed legislation related to transgender students’ ability to play sports consistent with their gender identity, for example.
