It is the law. All California-certified Small Businesses (SB) and Disabled Veteran Business Enterprise (DVBEs) doing business with the state must perform a Commercially Useful Function (CUF). Performing CUF is a critical requirement for all California-certified firms - SB and DVBE - that do business with the state (Government Code Section 14837 and Military and Veterans Code Section 999).

Commercially Useful Function Definition

A SB/DVBE certified firm performs CUF when doing all of the following:

  • Executes a distinct element of the contract scope of work including supplying of goods/services.
  • Performs, manages, or supervises the work including supplying of goods/services.
  • Performs work that is normal for the firm’s business services and functions.
  • Is responsible, with respect to products, inventories, materials and supplies required for the subcontract, negotiating price, determining quality and quantity, ordering, installing (if applicable), and paying for the material.
  • Does not subcontract a portion of the work greater than expected by industry practices.


A SB/DVBE certified firm does NOT perform CUF when:

  • The firm is an extra participant involved in a transaction, contract, or project through which funds are passed through in order to obtain the appearance of SB/DVBE participation.
  • The firm is not being used to perform the work as stipulated in the bid.
  • The firm is no longer used to provide good/services listed in initial bid response.



Carl Josephson

Department of General Services
Procurement Division

707 Third Street
West Sacramento, CA 95605

Phone: (916) 375-5936