How To Do Business With The State Of California

There are several procurement opportunities available for businesses interested in winning government contracts with the state of California. Each year California purchases almost 10 billion dollars-worth of goods and services that range from office supplies to specialized temporary labor.

All government procurement in California is administered by the Procurement Division of the California Department of General Services (DGS). They make all purchases for all state departments, agencies, institutions, community colleges, technical institutes and city and local boards of education.

All bid opportunities are advertised in the California State Contracts Register (CSCR). Interested business owners can view and download procurement opportunity information from here. Owners can also subscribe to receive automated emails or faxes of CSCR advertised opportunities.

To start doing business with the state of California businesses must first register through the state’s eProcurment system. The process is simple, requiring a business applicant to create a supplier profile with contact information, company information, tax information as well as goods and services offered. The registration process is free and will allow interested firms to search for all procurement opportunities administered by the state.

Small businesses and disabled veteran-owned businesses can take advantage of set-aside awards available each year to certified firms. The procurement division understands the important role small businesses play in improving local economies and communities and therefore makes a tremendous effort to encourage more and more small businesses to apply for these state government contracts. In fact, the state of California requires state agencies to award at least 25% of their annual contracting dollars to certified small businesses and at least 3% to certified disabled veteran-owned businesses.

The procurement division website features a simplified way to get certified as a California Small or Disabled Veteran Business Enterprise vendor or supplier. Additionally, once certified by the state business firms will find many local agencies will honor the state’s designation when bid opportunities arise for any of these two business classifications.

In order for firms to qualify as a small business they must meet the following criteria:

  • Be independently owned and operated;
  • Cannot be dominant in the field of operation;
  • Must have its principle office located in California
  • Owners must live in California, and together with affiliates be either:
    • A business with 100 or fewer employees and have an average annual gross income of $14 million or less over the previous 3 tax years, or
    • A manufacturer with 100 or fewer employees

Small businesses are also encouraged to apply for state contracts as co-ventures or partners with other small business. It’s important to note, however, that each business in a partnership must be certified as a small business when applying for these set-aside awards.

In order for firms to qualify as disabled veteran-owned business they must meet the following criteria:

  • Be at least 51% owned by one or more disabled veterans (as declared by the U.S. Department of Veteran Affairs or the U.S. Department of Defense)
  • Daily business operations must be managed and controlled by one or more disabled veterans.
  • Primary office must be located in the U.S. and cannot be a branch or subsidiary of a foreign firm or business

It’s also important to note that most DVBEs can also qualify for small business status, so it’s important that business owners explore all options in order to increase the number of available opportunities.

Businesses of all sizes should also look into California Multiple Award Schedules (CMAS) contracts. These contracts are awarded to two or more businesses that offer a variety of products and services at pre-approved pricing and can be used by any state and local government agencies making purchases.

CMAS contracts are not awarded on a competitive basis directly by the state, but rather are based on existing Federal GSA Schedule contracts. Businesses need not hold a GSA Schedule contract, but they must cite an existing contract and substantiate that they are authorized to sell the same products and provide the same services offered in the “base” federal contract.

Businesses just getting started in government contracting shouldn’t ignore the wealth of opportunities available in doing business at the state level. State and local contracts are often easier to understand and less cumbersome than their federal brethren. Knowing where to get started can make all the difference between a thriving and growing business and one that struggles to make ends meet.

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