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SB/DVBE Eligibility

Certification Types

Small Business for the purpose of Public Works Certification

Effective January 1, 2019, the Office of Small Business and DVBE Services (OSDS) will also administer the new Small Business for the purpose of Public Works (SB-PW) certification. The new certification type was created by Senate Bill 605 (Chapter 673, Statute of 2017), passed in October 2017. This certification type is solely for the purpose of Public Works contracts and/or projects. SB-PW expands the opportunities for small businesses to compete in the public works arena. For the purpose of this certification, public works is defined as in Public Contract Code 1101: An agreement for the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind.

 

SB-PW Eligibility Requirements

In order for a firm to be eligible for the new SB-PW certification, the applicant firm including manufacturers must meet the following requirements:

  • Be independently owned and operated;
  • Not dominant in field of operation;   
  • Principal office located in California; 
  • Owners, Officers, Members/Managers, Partners must be domiciled in California;
  • Average $43 million or less in gross annual receipts over the last three tax years (including affiliates);
  • A business with 200 or fewer employees (including affiliates)

 

Resources

 

Authority

If you have any questions regarding the SB-PW Certification eligibility requirements and benefits, please contact OSDS Help at (916) 375-4940 or SBPublicWorks@dgs.ca.gov.

Small Business (SB) Certification Eligibility Requirements and Benefits

In order for a small business to be eligible for certification, the small business must meet the following requirements:

  • Be independently owned and operated;
  • Not dominant in field of operation;
  • Principal office located in California;
  • Owners (officers, if a corporation) domiciled in California; and,
  • Including affiliates, be either,
    • A business with 100 or fewer employees; an average annual gross receipt of $18 million or less, over the last three tax years;
    • A manufacturer* with 100 or fewer employees; or,
    • A micro business – a small business will automatically be designated as a micro business, if gross annual receipts are $6,000,000 or less; or the small business is a manufacturer with 25 or fewer employees

*For Small Business Certification purposes, a manufacturer is a business that is both the following:

(1) Whether the business, with its own facilities, performs the primary activities in transforming inorganic or organic substances into the end item being acquired, and is not a packager or, in the case of kits, a final assembler. The end item must possess characteristics that did not exist, before the original substances, parts, or components were assembled or transformed, as a result of mechanical, chemical, or human action. The end item may be finished and ready for utilization or consumption, or it may be semi-finished as a raw material to be used in further manufacturing, and

(2) Whether more than fifty percent (50%) of its annual gross receipts, as determined by the Department, result from the manufacture and sale of products manufactured by the business.

Small Business Certification Benefits

Upon meeting the Small Business Certification eligibility requirements, certified small business (SBs) and micro businesses (MBs) are entitled to the following benefits:

  • A 5 percent bid preference on applicable State solicitations;
  • As a certified small business/micro business, you are eligible for the State's Small Business Participation Program. This program sets a goal for the use of small businesses in at least 25 percent of the State's overall annual contract dollars;
  • Under the Prompt Payment Act, the State must pay a certified SB/MB higher interest penalties for late payment of an undisputed invoice. Prompt payment penalties for construction firms are addressed separately under Public Contract Code, Section 10261.5);
  • State agencies may use a streamlined process, known as the SB/DVBE Option, by contracting directly with a California certified small business/micro business for goods, services, information technology and Public Works projects. The solicitation must be valued at more than $5,000 and the State agency must obtain price quotes from at least two California certified small business/micro business;

    • Effective February 22, 2018, the maximum thresholds are:
      Goods, Services, or Information Technology - $249,999.99
      Public Works - $314,000.00 (Effective 2/22/18: BL 18-03)
    • Effective February 4, 2020, the maximum thresholds are:
      Goods, Services, or Information Technology - $249,999.99
    • Public Works - $388,000.00 (Effective 2/4/20: BL 04-20)
      Effective February 1, 2024, the maximum thresholds are:
      Goods, Services, or Information Technology - $249,999.99
      Public Works - $461,000.00 (Effective 2/1/24: BL 24-04)
  • The Department of General Services, Procurement Division (DGS-PD) charges State and local agencies an administrative fee, when contracting with a California Multiple Award Schedules (CMAS) vendor. As an incentive, the fee is waived, if the CMAS vendor is a certified small business/micro business;
  • As an incentive, a non-small business prime contractor, who uses certified small business/micro business subcontractors for at least 25 percent of its net bid price, is eligible for a bid preference of 5 percent of the lowest responsible bid, when competing against another non-small business; and, when applying bidder preferences, in which non-small business bidders may be eligible, certified small business/micro business bidders have precedence over non-small business bidders.

NOTE: Small business/micro business bids cannot be displaced by non-small business/micro business bids, when applying any applicable lawful preferences.

You can now become a certified SB/DVBE online! Go to Cal eProcure to register your business. Also view online certification instructions.

If you have any questions regarding the Small Business Certification eligibility requirements and benefits, please contact OSDS Help at (916) 375-4940 or by email.

Disabled Veteran Business Enterprise (DVBE) Certification Eligibility Requirements and Benefits

For DVBE certification purposes, a "disabled veteran" is:

  • A veteran of the U.S. military, naval, or air service;
  • The veteran must have a service-connected disability of at least 10 percent or more; and
  • The veteran must reside in California.

To be certified as a DVBE, your firm must meet the following requirements:

  • Your business must be at least 51 percent owned by one or more disabled veterans;
  • Effective 1/1/2004, per Public Contract Code – DVBE limited liability companies must be wholly owned by one or more disabled veterans.
  • Your daily business operations must be managed and controlled by one or more disabled veterans

NOTE:

The disabled veteran who manages and controls the business is not required to be an owner of the applicant business; and

  • Your home office must be located in the U.S. (the home office cannot be a branch or subsidiary of a foreign corporation, foreign firm, or other foreign based business).
  • All existing and all new DVBE applicants must submit to the Office of Small Business and DVBE Services (OSDS) complete copies of the DVBE's federal income tax returns for the previous three years. DVBEs who have been in business for less than three years shall submit the federal tax returns for each year they've been in business.
  • A DVBE applicant that is not a sole proprietorship and rents equipment to the state must provide the federal income tax returns for each of their disabled veteran owners or your firm will be deemed to be an equipment broker.
  • DVBE limited liability companies must be wholly owned by one or more disabled veterans.

DVBE Certification Benefits

Upon meeting eligibility requirements, certified DVBEs are entitled to the following:

  • State certified DVBEs are eligible for the state's DVBE Participation Program. The program sets the goal to use DVBEs in at least 3 percent of the state's overall annual contract dollars.
  • State agencies may use a streamlined process known as the "SB/DVBE Option" by contracting directly with a California certified DVBE business for goods services, information technology and public works projects. The solicitation must be valued at more than $5,000, and the State agency must obtain price quotes from at least two California certified DVBE businesses. For more information, see Government Code Sections 14838.5 and 14838.7.

    • Effective February 22, 2018,the maximum thresholds are:
      Goods ,Services, or Information Technology-$249,999.99
      Public Works-$314,000.00 (Effective 2/22/18: BL 18-03)
    • Effective February 4,2020,themaximumthresholdsare:
      Goods, Services, or Information Technology-$249,999.99
      Public Works-$333,000.00(Effective2/4/20:BL04-20)
    • Effective January 26, 2022, the maximum thresholds are:
      Good, Services or Information Technology - $249,999.99
      Public Works - $388,000.00 (Effective 1/26/22: BL 20-02)
    • Effective February 1, 2024, the maximum thresholds are:
      Good, Services or Information Technology - $249,999.99
      Public Works - $461,000.00 (Effective 2/1/24: BL 24-04)

If you have any questions regarding the DVBE Certification eligibility requirements and benefits, please contact OSDS Help at (916)375-4940 or by email.