SB/DVBE Option - 1405.3

(Revised: 05/2025)

The Small Business or Disabled Veteran Business Enterprise (SB/DVBE) Option acquisition method is allowed by Government Code, Section 14838.5(a) and (b).  When using the SB or DVBE Option, contracts may be awarded for goods, services or information technology (IT) goods and services, valued from $5,000.01 to $249,999.99 to a California certified SB, including microbusiness (Micros) or a California certified DVBE, without advertising as long as price quotations are obtained from two or more certified SB/Micros or two or more DVBEs.

Departments granted SB/DVBE Options purchasing authority are authorized to conduct SB/DVBE Option competitive solicitations as follows:

1. Create the solicitation; verbal or written (as specified in this chapter).
2. Consider the use of best value award criteria to select a contractor. Best value can be determined using any one or all the criteria but not limited to the ones noted below.
3. Expand the pool of SB, Micros, and DVBE firms participating in state contracts by regularly seeking out and identifying certified firms that have not previously done business with, or that are not regularly used by the awarding department and other state agencies, and include those SBs, Micros, and DVBEs when using this acquisition method. This requirement is not meant to exclude previously contracted SBs, Micros, and DVBEs businesses from future contracting opportunities.
4. Although not required, consider advertising the contracting opportunity in the California State Contracts Register (CSCR) to send automatic notifications to vendors including all SB/DVBE with UNSPSCs matching the ones in the advertised opportunity. Advertising less than 10 days is allowed for the SB/DVBE Option Acquisition Methods without approval from DGS. Effective immediately, DGS exempts the SB/DVBE Option Acquisition Method advertised in CSCR from DGS fees.
5. Verify SB or DVBE certification status through FI$Cal (certification status is maintained in “real-time” in FI$Cal).
6. Release the solicitation only to California certified SBs/Micros or DVBEs.
7. Contract award may be made upon receipt of responsive price quotations from at least two (2) responsible California certified SB/Micros or DVBEs and award must be made based upon the solicitation format used.
8. The procurement file must be documented to support the contract award and the action taken.
9. The DVBE participation exemption requirement is not applicable.

Possible Best Value Criteria

Best value can be determined using any one or all of the following criteria as applicable to the effort:

1. The price of the product or service
2. The operational cost that the State would incur if the offer is accepted
3. The quality of the product or service, or its technical competency
4. The reliability of delivery and implementation schedules
5. SB/DVBE participation as prime or subcontractor (advertising and DVBE forms not required for LPAs) to meet department goals
6. Environmentally Preferable Purchasing (EPP) criteria
7. The maximum facilitation of data exchange and system integration
8. The warranties, guarantees, return policy and take-back for reuse or recycling
9. The supplier financial stability
10. The consistency of the proposed solution with the state's planning documents and announced strategic program direction
11. The quality and effectiveness of business solution and approach
12. The industry and program experience
13. The prior record of supplier performance
14. The supplier expertise with engagements of similar scope and complexity
15. The extent and quality of the proposed participation and acceptance by all user groups
16. The proven development and methodologies and tools
17. The innovative use of current technologies and quality results

Regardless of other criteria being used to accept an offer, price must always be used as best value criteria.

Legal Reference

Assembly Bill No 1574, Chapter 756

Government Contract Code, Section 14838(f)

Government Contract Code, Section 14838.5(a) and (b)

Related Policy, Procedures & Resources

Broadcast Bulletin, P-11-22, NEW Requirement to Expand the Pool of Small Businesses and Microbusinesses in State Contracts/Procurements

State Contracting Manual (SCM), vol. 2, Section 1405.3, SB/DVBE Option

State Contracting Manual (SCM), vol. 2, Section 1602, Leveraged Procurement Agreement (LPA) Basics

State Contracting Manual (SCM), vol. 2, Section 1510, Fair and Reasonable (F&R) Acquisition Method Purchases

Attachments

None.