Small Business and DVBE Services Branch Procurement Division Department of General Services

Session Highlights  Overview of Small Business –Certification –Benefits  Reciprocity

Each year… the State awards over $5 billion in contracts for goods, services, and construction.

Small Business Participation Program

Small Business Preference  Created in 1973 by the Small Business Procurement and Contract Act  Administered within the Department of General Services  Established to further the participation of small business in State contracting

Small Business Preference continued  Furthers SB participation utilizing: –A 5% bidding preference—Small Businesses must be certified by the OSDC to be eligible –A 25% participation goal—State agencies are to award at least 25% of annual contracting dollars to certified firms

SB Certification Eligibility  Principle office must be located in California  Officers/owners must be domiciled in California  Business must be independently owned and operated  Business must not be dominant in its field of operation

SB Certification Eligibility continued  Construction, Service and Non-manufacturer firms: –100 or fewer employees –Average annual gross receipts of $10 million or less per year for each of the most recent three years

SB Certification Eligibility continued  Manufacturer firms: –100 or fewer employees –Primarily engaged in the chemical or mechanical transformation of raw materials or processed substances into new products –Standard Industrial Classification (SIC) Codes 2000 through 3999

Program Benefits  Certified firms are eligible for a 5% bidding preference5% bidding preference  Certified firms are eligible for consideration in the streamlined contracting processstreamlined contracting process  Certified firms are entitled to higher Prompt Payment penalty interest Prompt Payment

Applying the 5% Preference $102,000 The Contract is Awarded to Bidder B for the original bid amount of $102,000original It pays to get certified!!! Bidder A Bid = $100,000 Adjusted Bidder B Bid = $97,000 Bids $102,000 Bidder B Is a Certified Small Business Bidder A Not a Certified Small Business Bids $100,000 $102, ,000 $ 97,000 $100,000 x.05 (5%) $ 5,000

Streamlined Contracting Process  For service and commodity purchases between $5,000 and up to $100,000.  For construction up to $120,000. Agencies obtain quotes from two certified small businesses or two certified DVBEs, and award to a certified small business or a certified DVBE. certified small businesses

Prompt Payment Program  All businesses are entitled to receive payment within 45 days of undisputed invoice and/or receipt of goods.  Certified Small Businesses receive higher penalty interest. Certified Small Businesses

Program Benefits continued  Certified firms are listed in detail on the Internet—Certified Firm Listing  Other entities may “honor” the State’s Small Business certification (known as Reciprocity)

Application  Internet –   Phone –

Reciprocity

 The program’s goal is to attain One-Stop Certification in California  Reciprocity is achieved when: –A local program “honors” State Small Business or DVBE certification, And, if needed: –Adds local program requirements

SB Reciprocity Partners  Sacramento Municipal Utility District  Sacramento Housing and Redevelopment Agency  County of Los Angeles  City of San Diego  County of Sacramento  San Diego Water Authority

 City of Sacramento  San Diego Airport Authority  Contra Costa County  Los Angeles Unified School District  Plus, more forthcoming Reciprocity Partnerships SB Reciprocity Partners

Small Business and DVBE Services Branch 707 Third Street, First Floor West Sacramento, CA Tel: (916) Fax: (916) Website: Office Hours: M-F 8:00 A.M. – 5:00 P.M. Business Card

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