"To put this in perspective, a company with a $10,000 contract with the City might charge $10,002 to $10,012 for the same contract after offering domestic partner benefits to its City-contract employees..."

uhm, you're not suggesting that it only costs $2-12 to provide benefits/coverage for an employee are you?

No. It gets a bit complicated, but from the analysis performed by IGLSS:

This cost assumes that employers will pass along the .03% to 0.18% increases in cost they may experience [from the EBO] to all clients uniformly in order to minimize the risk of losing any one particular contract due to price increases, and/or (2) that employers that only conduct a very small fraction of their business with the city are located outside the limits of that city, and are not on city-owned property. If neither of the assumptions above applies to a company that conducts a small portion of its business with an equal benefits city, that company might want to pass along higher prices to that city. For example, a company that plans to conduct only 1% of its business with a given city would experience cost increases of 3% to 18%, relative to the size of its city contract (0.03%/1%, 0.18%/1%). A company that was determined to recover all of its potential increased costs from its city contracts might charge $10,300 to $11,800 on a $10,000 contract. But if other bidders are not trying to pass along the full cost increase to the city, then companies will face competitive pressure to keep bids low.Thus potential bidders are more likely to either absorb whatever their profit margins would bear, or simply not bid.

Does the City of Porland currently require its vendors or contractors to offer any partcicular level of benefits to their employees? If some company currently gives zero benefits to all its employees, a requirement that everyone be treated "equally" is not really accomplishing anything, is it? For example, if Wal-Mart was the low bidder on supplying toilet paper to the City, could the City reject Wal-Mart's bid because of Wal-Mart's dismal employee benefit program? I agree that non-discrimination is important, but I would also be interested in a requirement that anyone wanting to sell goods or services to the City be required to offer their own employees the same level of benefits as City workers currently receive. I don't think that policy is currently in effect, which is the reason why "outsourcing" is so popular right now.