Small Business Certification in California: How to Apply

California’s small business certification gives qualifying firms a 5% bid preference on applicable state contracts. Here is who qualifies, how to apply and what it is worth.

Small business certification in California, issued by the Department of General Services (DGS), is the foundation of a public contracting plan: it brings a 5% bid preference on applicable state solicitations and is the first step toward SMUD SEED verification.

Small business certification is the first certification most California firms should get. The Department of General Services (DGS) certifies small businesses (SB) and microbusinesses (MB) for state contracting, and many local agencies, including SMUD, use the DGS certification as a starting point for their own programs.

What small business certification is worth

5% bid preference: certified small businesses and microbusinesses receive a 5% bid preference on applicable state solicitations (DGS).
Subcontracting demand: a non-small prime contractor that subcontracts at least 25% of its net bid price to certified small businesses can also earn a 5% preference, so primes look for certified partners.
Local programs: SMUD requires DGS small business registration as step one of SEED verification.

Who qualifies

DGS sets limits on employees and average annual revenue, and the business must be independently owned and operated, with its principal office in California. Check the current limits on the DGS certification page before you apply; they are adjusted over time.

How to apply

Create a Cal eProcure account and start the SB/DVBE certification application.
Have ready: tax returns, ownership documents and employee counts.
Questions: DGS Office of Small Business and DVBE Services, (916) 375-4940 or certification@dgs.ca.gov.

Federal small business status

For federal contracts, most firms represent their small business size in SAM.gov against SBA size standards. Separate SBA certifications (8(a), women-owned, HUBZone and veteran-owned) add access to set-aside contracts.

Key takeaways

DGS small business certification brings a 5% bid preference on applicable state contracts.
Prime contractors seek certified subcontractors to earn their own 5% preference.
It is step one for SMUD SEED verification.