Small Business Certification Benefits

SB Preference Calculation

Under Government Code 14838 (b) (1), the Small Business Contract Act, certified small businesses are entitled to the application of a Five Percent Small Business Preference to their bid to determine if they are eligible for bid award as the low bidder. Additionally, SB firms must meet all other criteria identified within the bid scope, and be determined responsive and responsible at the time of bid submission to be eligible for SB preference application. The SB preference is for bid evaluation purposes only and firms awarded using the SB preference will be awarded the bid at their bid price.

Prompt Payment

The Prompt Payment Program was enacted January 1, 1999 through implementation of AB 2275. The Act entitles certified small businesses, and recognized nonprofit organizations, to collect penalties from state agencies if an undisputed invoice is not paid within 45 days of the invoice receipt date. Certified small businesses may obtain the Prompt Payment Stamp to identify their invoice as being that of a small business. The rubber-stamped invoice alerts a state agency of the firm's small business/nonprofit status and that special handling is required. Late payment by a state agency results in interest penalties incurred by the agency and it must be automatically included and paid to the supplier. Go to the DGS, Office of Small Business and DVBE services for information regarding Prompt Payment , the prompt payment stamp, invoice dispute or program advocacy. Please contact us for assistance regarding DOR invoice payment issues.

Non-Small Business Calculation Preference

Under Government Code 14838 (b) (1) non-small businesses that commit 25 percent of the overall contract value to a certified small business subcontractor at the time of bid submission may be eligible for a five (5) percent preference calculation during bid evaluations. Application of the non-small business preference may not be used to displace a certified firm that is the low bidder. The preference calculation is applied for bid evaluation purposes only and any firm awarded using the non-small business calculation preference will be awarded at their bid price.

Small Business Option

Under Government Code 14838.5 departments may directly solicit certified small businesses for goods, personal services, and IT Goods/Services between $5,001 and $249,999.99. A department may also solicit for public works projects up to $147,000. In order to award a contract through the Option process, a department must solicit and receive at least two price quotes from certified small businesses. The Option bid process is considered an "informal" process and departments may, but are not required to advertise option solicitation opportunities. Additionally, the Option process does not include provisions for protest.

Additional Small Business Resources

DGS-PD SB/DVBE Information

The following link is the official DGS Website with comprehensive SB and DVBE program information including: communication and outreach, SB/DVBE Advocates, Small Business Advisory council and other information links.

The following link provides information about SB certification, requirements and the expedite certification process.