A divided City Council decided Tuesday to approve a $21-million parts and services contract to an international auto parts corporation in the midst of opposition from local auto parts businesses. 

Staff with the General Services Department said the new five-year contract with the National Auto Parts Association (NAPA) will yield $2 million in savings for the city.

After hearing from representatives from several local auto parts companies, the City Council voted 6-3 to approve the contract. Mayor Kevin Johnson and Councilmembers Sandy Sheedy and Kevin McCarty voted against the deal. 

“Small business is the backbone of our economy and we have to do everything we can to make sure that we support small business,” Johnson said. “And for me, in this case, if small businesses lose, there’s an impact on their families and the neighborhoods.”

On one hand, the city aims to save money in light of the poor economy. But local companies view the contract as a debate between small local businesses and large firms — they said they would lose contracts with the city to a large non-local corporation.

“We’ve been doing business for the city since 1961,” said Scott White, who spoke on behalf of Norm’s Electric in Sacramento. “We never had a problem keeping up with anything the city needed as far as the electrical end of things.” NAPA will “run us out,” he said.

City staff responded by saying the small businesses would not lose business with the NAPA deal. The contract would merely change the business relationship, staff said. Instead of working with the city government, the local companies would work with NAPA, according to city staff.

The city’s fleet manager, Keith Leech, said Monday the city plans to continue to work with local businesses under the NAPA contract.

“I think another important point is that we’re currently doing in excess of 30 percent small business participation here on our fleet parts,” Leech said. “We expect that to pretty much remain constant because NAPA’s agreed to commit to a 10-percent small business participation goal as part of their overall contract.”

Councilman Steve Cohn asked for a mid-year progress report on the contract.

“I want to be sure that this is really working the way we think it is, and that it is, in fact, saving money,” he said, adding that the city needs to ensure that small businesses can still compete for business with the city’s fleet.

The council approved the contract with the request that city staff provide an update at six months and one year.

At the meeting, Ted Loranza, director of NAPA’s Integrated Business Solutions program, addressed the issue of working with local businesses. He said NAPA would provide inventory management, noting that 20 percent of the products that the company sells to a government agency are NAPA products. The remaining products are purchased from local vendors, he said.

“It’s our job to use existing vendors within that local community and offer the best possible service that we can to a city or county government where we have an IBS location,” Loranza said. He also said his company has paid more than $8 million in salaries in the Sacramento area.

Johnson told General Services Director Reina Schwartz that he would have preferred for city staff to have brought NAPA and local businesses together to form relationships before bringing the issue to the City Council.

Photos by Anthony Bento.

Kathleen Haley is a staff reporter for The Sacramento Press.