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City of Philadelphia

Local Business Preference

Section 17-109 of The Philadelphia Code requires the Procurement Department to establish a bid preference for businesses that qualify and are certified as a Local Business Entity (LBE).

For those vendors that are certified as an LBE it may be possible to reduce their bid price by a pre- determined percentage as part of the bid evaluation process to determine the lowest bidder. If a bid is received in the amount of $1 million or less, the LBE preference is ten percent (10%). For all other bids, the LBE preference is five percent (5%).

If awarded a contract as a result of the LBE preference, the LBE vendor will still be awarded a contract based on the actual bid amount stated in the vendor submitted bid document. The chart below reflects how an LBE certified vendor’s bid is evaluated when that LBE vendor meets all criteria for having a specific bid be evaluated for LBE preference.



Bid Amount

Bid Preference

Amount Reduced from Bid for Evaluation Purposes

Bid Evaluation Amount

 Bid Amount if Awarded the Contract

Bid Amount of $1 million or less






All other bids






In order to be certified as a LBE, the vendor must submit the Local Business Entity Certification Application and submit back up that meets the following criteria:

During the preceding eighteen (18) months, the company has continuously maintained a valid Commercial Activity License and all other licenses and permits necessary to conduct business with the City; and

1. The company has continuously occupied, staffed and conducted business in an office within the City; and

The company satisfies the following requirements:

The company’s principal place of business is located in the City of Philadelphia, or

2. During the preceding eighteen (18) months the company satisfies at least two of the three requirements:

More than sixty percent (60%) of the Business Entity's full-time employees reported as  Philadelphia Residents on the City of Philadelphia Annual Reconciliation of Employer Wage Tax;

More than half of the Business Entity's full-time employees working in the City at least sixty  percent (60%) of the time;

More than three quarters of the Business Entity’s gross receipts reported on the Entity’s business  and income receipts tax return as Philadelphia receipts.

*If the company’s principal place of business is not located in the City, they will be asked to provide both the address for the principal place of business and the address of their City location; such vendors will be required to provide employment and other data necessary to establish qualifications and may be subject to a site inspection of the City location.

To be certified as a LBE, vendors must complete the Local Business Entity Certification Application.  Vendors certified as LBE are required to submit a Continuing Eligibility Affidavit on an annual basis.  The LBE certification is valid for five (5) years. If a vendor is awarded a contract based upon the LBE preference, the vendor is required to maintain its certification throughout the contract term (this is noted in each Bid that includes an LBE preference). However, please note, being certified as an LBE vendor does not guarantee that all bids submitted by an LBE vendor will be evaluated with the LBE preference. LBE is only pertinent on applicable bids.

Please review the full LBE regulations for more information. And, if you are applying for a specific bid opportunity, please be sure to read and fully understand the requirements of each individual bid.