WEST SACRAMENTO - California awarded nearly $2.3 billion in state contracts to small businesses last year, a new record and a major milestone in the State's efforts to promote entrepreneurship and economic growth.

The awards to small businesses represent a record 30.21 percent of the total eligible contracts reported, exceeding the State's goal of awarding 25 percent of its purchasing dollars to small businesses. Likewise, the State achieved a 3.47 percent participation rate for disabled veteran business enterprises (DVBEs), exceeding its 3 percent goal.

"California's small businesses are the heart of our economy, creating jobs and building prosperity for millions of Californians," said Fred Aguiar, Secretary of the State and Consumer Services Agency. "I'm proud to stand with California's small business and disabled veteran business owners and celebrate the tremendous progress we are making together."

Last year's $2.3 billion figure was up sharply from the year before, when only $1 billion in state contracts went to small businesses, about 17.69 percent of the total dollar value. California also missed its DVBE participation goal in 2002-03, when only $142 million went to DVBEs, 2.7 percent of the total.

"When I came to this department last year, one of the first things to hit my desk was a report that the State of California had fallen well short of its goals for small business and DVBE participation," said Ron Joseph, Director of the Department of General Services. "I knew that we could and must do better."

The new focus on improving small business and DVBE participation extends not only to traditional contracting, but also to the new approaches being pioneered under the California Strategic Sourcing Initiative. The State's new office supplies contract with OfficeMax encourages the company to subcontract at least 25 percent of the work to small businesses and DVBEs.

In addition, ongoing procurements for computer equipment have integrated "partnering workshops" into the bidders' conferences in order to give prime vendors a chance to meet and form partnerships with small businesses and DVBEs. This promising approach will be used for future contracts as well.

"Today, as we modernize our procurement systems to achieve better values for taxpayers, we are also working aggressively to ensure that California's small businesses and DVBEs can seize the new opportunities that are being created," Joseph said. "The Department of General Services and the California Strategic Sourcing Initiative will continue to work to expand small business and DVBE participation."

Historically, small business participation in California state contracts has risen since 1993-94, although there was a major downturn in 2002-03. The denominators for small business and DVBE participation rates are different, reflecting differences in reporting procedures.