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California Small Business Certification - and Microbusiness Certification

California Small Business and Microbusiness certification with online application for sustainable regional business

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Certification as a Small Business with the California state government provides small and micro businesses with greater access to purchasing opportunities with the state. Some large corporations, such as utility companies, that have government contracts are also mandated to work with small companies for a portion of their purchases or to fulfill specific criteria of a government contract.

In most cases, your California Small Business certification or Non-Profit registration will be completed online in one business day or less when you have at hand the necessary information from your tax returns and business documents to enter into the online system.

Companies can find certified California Small Businesses (SB), Microbusinesses (MB), and/or Disabled Veteran Business Enterprises (DVBE) or check the certification status of a firm or application at the California Department of General Services website.

Small Business and Microbusiness Certification Benefits

Upon meeting eligibility requirements, certified small businesses (SBs) and microbusinesses (MBs) are entitled to the following:
  • A 5% bid preference on applicable state solicitations.
  • 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 seperately under Public Contract Code, Section 10261.5). (See Prompt Payment Program.)
  • State agencies may use a streamlined process known as the "SB/DVBE Option" by contracting directly with a California-certified small business for goods, services, and information technology valued between $5,001 and $99,999 after obtaining price quotes from at least two California-certified small businesses. For public works projects, the contract value can be up to $131,000.
  • The Department of General Services, Procurement Division 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.
  • As an incentive, a non-small business prime contractor who uses certified small business subcontractors for at least 25% of its net bid price is eligible for a bid preference of five percent (5%) of the highest responsible bid (or score) when competing against another non-small business.

When applying bidder preferences in which non-small business bidders may be eligible, certified small business and microbusiness bidders have precedence over non-small business bidders. (Small business bids cannot be displaced by non-small business bids when applying any applicable lawful preferences).

  • As a certified small business you are eligible for the state's Small Business Participation Program. The program sets a goal for the use of small businesses in at least 25% of the state's overall annual contract dollars.
  • Certified small businesses increase their visibility and expand their business networking opportunities by being automatically listed in the online Certified Firm and Application Status Search.

Small Business Certification Eligibility Requirements

  • Must be independently owned and operated;
  • Cannot be dominant in its field of operation;
  • Must have its principal office located in California;
  • Must have its owners (or officers in the case of a corporation) domiciled in California; and
  • Together with its affiliates, be either:
    • A business with 100 or fewer employees, and an average annual gross receipts of $12 million or less over the previous three tax years, or
    • A manufacturer with 100 or fewer employees.

A microbusiness is:
  • A small business that, together with affiliates, has an average annual gross receipts of two million seven hundred fifty thousand dollars ($2,750,000) or less over the previous three years, or
  • Is a small business manufacturer with 25 or fewer employees.
California Department of General Services

Edited by Carolyn Allen, owner/editor of California Green Solutions
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