Encouraging small for-profit businesses in state procurement
According to Assembly Bill 2019, state agencies in California are required to create an “economic equity first” policy and action plan to ensure that small businesses, including ethnic media outlets, actively participate and benefit from the procurement process.
On March 21, 2024, Ethnic Media Services held a training session to cover the essential aspects of registering such small for-profit businesses in state procurements.
Joann Patty, a Business Outreach Liaison at the California Department of General Services, explained the benefits and opportunities of obtaining Small Business (SB) certification, Disabled Veteran Business Enterprise (DVBE) certification, and contract opportunities with the state of California.
Benefits of Certification
Patty discussed the requirements, benefits, and how they can assist in navigating the process effectively.
“The State of California as a whole, along with each department and agency, is mandated to spend 25% of all contract dollars on small businesses and 3% of all contract dollars on disabled veteran business enterprise (DVBE) services. Therefore, the state wishes to conduct outreach programs to fulfill these requirements and increase the involvement of small businesses and DVBE in state contracting,” she explained.
Who is eligible?
Patty mentioned that getting businesses certified by the state is free and the certifications last two years. However, there are important things that Small Businesses (SBs) and Disabled Veteran Business Enterprises (DVBE) should know before starting the registration process.
First, for small businesses, the firms must be independently owned and operated, not be dominant in their field of operation, have their principal office in California, and have owners (or officers for a corporation) domiciled in California.
Additionally, they should have 100 or fewer employees and their Gross Annual Receipts (GARs) should be less than 16 million dollars (including any affiliates). Patty stated that “the firms must show their taxes for the last three years and the average should be less than 16 million dollars.”
Lastly, there is no GARs cap for manufacturers with less than 100 employees.
Public works businesses
For SBs in public works, eligibility requirements are mostly the same except for the number of employees, which should be fewer than 200, and their GARs should be less than $38 million dollars, as compared to the $16 million dollars mentioned earlier.
Disabled Veteran Business Enterprises (DVBEs) must also fulfill certain criteria to qualify for certification. The business should have a service-connected disability of at least 10%, and the owners should be disabled veterans with at least 51% ownership of the company, residing in California. The business should also be managed and operated by disabled veterans, with its headquarters located in the United States.
Registration and Certification
Patty highlighted several advantages of being certified. These include a 5% bid preference on contractors for Small Businesses (SBs) and up to 5% incentive for Disabled Veteran Business Enterprises (DVBEs) on contracts. Certified firms also can secure exclusive contracts, which gives them an advantage when competing with non-certified firms.
For instance, by being certified and registered on the emergency registry, firms become eligible to sell products or services to the state of California during an emergency. State of California buyers will go to this registry during emergencies and choose from a list of certified firms.
Small Businesses can also enjoy the benefits of the Prompt Payment Act and Reciprocity Partnership. Additionally, when working as a subcontractor with any prime contractors, the private contractor gets the benefit of certification.
“This makes you look like a much more desirable subcontractor than somebody who is not certified,” shared Patty.
How to Register
To register your small business or DVBE, simply visit www.caleprocure.ca.gov and fill in company details under the ‘Bidder Registration’ section. The registration process involves six simple steps, which will enable firms to be listed successfully on the state registry.
It is important to keep the ‘CSCR option’ turned on. This will ensure that firms receive notifications on contract opportunities within the state that match their goods and services. Notifications will only be sent to bidders whose offerings closely match the contract opportunities available within the state.
Matching with opportunities
To ensure that they are matched with the correct opportunities, businesses should have the correct United Nations Standard Products and Services Code (UNSPSC) associated with them. The UNSPSC is an eight-digit code that should be entered along with a description that accurately represents the firm’s services.
“Finding the right codes is easy. Simply type in the UNSPSC description field the terms that accurately describe your business. For example, if you supply ‘paper,’ type ‘paper’ in the UNSPSC description field and all the codes related to your firm will appear below. Once you have found the relevant codes, simply select as many UNSPSC codes you need and add them to your profile,” explained Patty.
To research more UNSPSC codes, go to: https://unspscsearch.apps.dgs.ca.gov or send an email to HelpUNSPSC@dgs.ca.gov
Certification Process
Once registered, log back into your account and start the certification process. The certification process will require the firms to upload their taxes and business license information. Usually, the certification for small businesses and small firms for public works will be approved instantly. However, for DVBEs it usually takes about 4-6 weeks depending on the backlog.
For more information, schedule a consultation to get help with registration and certification. Follow them on LinkedIn at: linkedin.com/company/dgs-osds.