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California’s Economic Equity Revolution: New Laws Empower Small Businesses


Under Assembly Bill 2019, state agencies are mandated to develop an “economic equity first” action plan and policy to ensure the active participation and benefit of small businesses in the procurement process. A panel organized by Ethnic Media Services explained how these new laws help small business owners. 

“California has invested billions of dollars to help small businesses and entrepreneurs achieve their California Dream,” said Governor Newsom. “These new laws build on our efforts to create a more inclusive economy with renewed opportunity for innovation and growth for the country’s largest small business community. I’m thankful for the Legislature’s leadership and support to help the backbone of our economy thrive.”

Joann Patty, Business Outreach Liaison Office of Small Business and DVBE (Disabled Veteran Business Enterprise) Services, California Department of General Services said that to bolster small businesses and promote inclusivity, the state of California instituted ambitious procurement goals. These mandates required that 25% of all contract dollars be allocated to small businesses, with an additional 3% reserved for disabled veteran business enterprises (DVBEs).

To achieve these objectives, the state embarked on extensive outreach efforts, aiming to engage small businesses and DVBEs in the state’s contracting opportunities.

“The benefits of certification were manifold. Small businesses stood to gain a 5% bid preference on contracts, while DVBEs could receive up to a 5% incentive. Moreover, certification granted access to exclusive contracts reserved solely for certified firms, providing a competitive edge in the bidding process,” Patty said. 

Certification also facilitated prompt payment, ensuring timely and undisputed invoice settlements, with higher interest penalties for late payments.

Furthermore, certifications held reciprocity with various cities, counties, and local governments, simplifying business transactions across different jurisdictions. This umbrella certification extended even to subcontracting arrangements, enhancing the appeal of certified firms as subcontractors.

Eligibility criteria were stringent yet accessible. Small businesses had to be independently owned and operated, with principal offices located in California. Similarly, DVBEs required at least 51% ownership by disabled veterans, with a commitment to daily management and operation by disabled veteran owners.

Certifications were valid for two years, with renewal reminders sent to eligible businesses. Importantly, certification incurred no costs, only requiring the investment of time.

The state’s procurement initiatives encompassed small business certification and small business for public works, each tailored to specific industry needs. While eligibility requirements varied slightly, the overarching goal remained to empower businesses and promote diversity in contracting opportunities.

Furthermore, the Disabled Veteran Business Enterprise (DVBE) certification provided vital support to disabled veterans, offering opportunities for entrepreneurial success and economic independence.

In tandem with these initiatives, the state introduced Cal eProcure, a centralized marketplace facilitating procurement processes. This platform streamlined contracting procedures, fostering transparency and efficiency in the state’s procurement ecosystem.

California’s commitment to small businesses and disabled veteran enterprises underscored the state’s dedication to economic growth, diversity, and inclusive prosperity. Through targeted outreach and robust certification programs, the state aimed to create a level playing field and foster a vibrant and diverse business landscape.

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