Demystifying California and Federal Small Business Certifications

The Value of Certification in California

For small businesses, obtaining official government certifications can be the key to rapid growth. California state agencies are mandated to strive for specific contracting goals: awarding 25% of contract dollars to certified Small Businesses (SB) and 3% to Disabled Veteran Business Enterprises (DVBE).

California State Certifications (SB & DVBE)

Administered by the Department of General Services (DGS), the SB and DVBE programs are the two primary certifications recognized by the State of California.

• Small Business (SB): Generally, firms must be independently owned, located in California, have 100 or fewer employees, and average gross receipts of $19 million or less over the last three years. Microbusinesses (under $5 million) receive an automatic designation.
• Disabled Veteran Business Enterprise (DVBE): The business must be at least 51% owned by a disabled veteran with a service-connected disability of 10% or more, residing in California.

The Benefits: Certified firms receive a 5% preference on competitive state bids. More importantly, agencies can use the "SB/DVBE Option" to bypass formal advertising and contract directly with certified firms for purchases between $5,000 and $249,999, provided they get quotes from at least two certified businesses.

Federal SBA Certifications

If you are targeting federal contracts, the U.S. Small Business Administration (SBA) offers powerful certification programs that provide access to set-aside contracts:

• 8(a) Business Development: A nine-year program assisting socially and economically disadvantaged business owners.
• HUBZone: For businesses located in historically underutilized business zones, requiring that at least 35% of employees also reside in a HUBZone.
• Women-Owned Small Business (WOSB): Helps level the playing field for female entrepreneurs in historically underrepresented industries.
• Service-Disabled Veteran-Owned Small Business (SDVOSB): Offers contracting preferences to veteran-owned firms at the federal level.

Getting Started

To apply for state certifications, register on Cal eProcure and submit your application and supporting documents online. For federal certifications, utilize the SBA's certify.sba.gov portal. Free assistance is often available through local APEX Accelerators (formerly PTACs) to help you navigate the application processes.