SB 70 amends the Small Business Procurement and Contract Act to expand the universe of state purchases that can be awarded to certified small businesses, microbusinesses, and disabled veteran business enterprises (DVBEs) outside the state’s full competitive bidding process. The bill keeps a lower threshold for small purchases, preserves a two‑quote practice for the streamlined awards, and gives the Director of General Services (DGS) authority to review and adjust the upper dollar limit based on inflation.
This change redirects a larger slice of mid‑range procurement dollars toward certified small firms and DVBEs, and it shortens procurement timelines for many routine acquisitions. Procurement officers, prime contractors, and compliance teams will need to update workflows, documentation, and outreach to reflect the larger set‑aside window and the DGS review mechanism.
At a Glance
What It Does
Allows state agencies and the California State University to award many mid‑value contracts to certified small businesses or DVBEs without following full advertising and bid protest rules, provided agencies obtain at least two price quotations. It also empowers DGS to review and adjust the contract‑value ceiling to reflect inflation on a set schedule.
Who It Affects
State procurement offices, campus procurement teams at the California State University, certified small businesses (including microbusinesses) and DVBEs seeking state contracts, and incumbent prime contractors that compete for medium‑sized state work.
Why It Matters
The bill materially expands the value range of procurements that can be steered toward small, certified vendors, increasing market access while reducing procedural overhead for many transactions. The CPI‑linked review shifts some routine adjustment authority from the Legislature to DGS, which affects how the program scales over time.
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What This Bill Actually Does
SB 70 revises two Government Code sections that govern set‑asides for certified small businesses and disabled veteran business enterprises. Under current law, agencies (and the California State University under a parallel provision) may bypass standard advertising, bidding, and protest requirements to award contracts within a mid‑range dollar band to certified small businesses or DVBEs; the bill raises the upper dollar limit of that band and leaves the lower boundary in place.
The streamlined route still requires agencies to solicit price quotations from at least two certified small businesses or two DVBEs and to consider any timely, responsive offers from responsible firms.
The bill also inserts a standing review process run by the Director of General Services: DGS must review the upper dollar threshold on a schedule the bill specifies and may adjust that threshold to account for changes in the California Consumer Price Index. Practically, that means the cap will be revisited periodically and can increase (or decrease) to preserve the real purchasing power of the set‑aside band without a separate statutory amendment.Separate clauses address very small purchases: when an acquisition’s estimated cost is below the specified lower amount, agencies must still obtain two price quotations whenever there is reason to suspect a single quote won’t be fair and reasonable; the director also retains the ability to administratively set a different lower threshold.
The bill updates the parallel California State University provision to mirror the state agency rules, so CSU campuses follow the same streamlined procedures and DGS review authority.
The Five Things You Need to Know
The bill raises the maximum estimated contract value eligible for award under the Small Business Procurement and Contract Act to $350,000.
Agencies and the California State University must obtain price quotations from two or more certified small businesses (including microbusinesses) or two or more disabled veteran business enterprises before using the streamlined award path.
The Director of General Services must begin a formal review of the dollar cap on January 1, 2026, again on January 1, 2028, and biennially thereafter, and may adjust the cap to reflect changes in the California Consumer Price Index.
Awards under this provision are exempted from the advertising, bidding, and protest requirements of specified chapters of the Government Code and the Public Contract Code, subject to the two‑quote requirement and consideration of responsive offers.
For acquisitions estimated under $5,000 (or a higher administrative threshold DGS sets), agencies must obtain at least two quotes whenever relying on a single source might not produce a fair and reasonable price.
Section-by-Section Breakdown
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State agency streamlined awards to certified small businesses and DVBEs
This is the core operative provision for state agencies. It authorizes agencies to award procurements within the specified mid‑range dollar band directly to certified small businesses or DVBEs without following the usual advertising and formal bid protest procedures, but only after obtaining two or more price quotations from eligible firms. Agencies must consider timely, responsive offers from responsible certified firms, which preserves a basic standard of responsibility and responsiveness while shortening procurement timelines.
Very small purchases and administrative lower threshold
This subsection keeps a safety valve for low‑dollar purchases: when the estimated cost is below the stated lower threshold, agencies must still get two quotes whenever relying on a single source could produce an unfair price. It also authorizes the Director of General Services to set a different lower threshold administratively, which gives DGS discretion to tailor the rule to operational realities across agencies.
California State University parity
This section mirrors the state agency rule for the California State University system, permitting campuses to use the same streamlined award route for mid‑range procurements and requiring the same two‑quote practice. Bringing CSU into parity reduces cross‑system complexity for vendors who market to multiple public buyers and forces uniformity in how mid‑range awards to small businesses and DVBEs are handled across state government.
Periodic review and indexing of the cap
The bill requires DGS to review the maximum contract value at fixed dates and authorizes adjustments tied to the California Consumer Price Index. That creates an administrative mechanism for preserving the cap’s real value over time; however, the provision vests substantial judgment in DGS about timing, indexing details, and rounding, which will translate into implementing guidance and potential changes in procurement planning cycles.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Certified small businesses (including microbusinesses): The larger dollar band increases the number and value of state opportunities they can pursue without competing in full formal procurements, improving wins for firms that qualify.
- Disabled veteran business enterprises (DVBEs): DVBEs gain access to a wider set of awards via the same streamlined route, which can accelerate contract awards and cash flow for these firms.
- CSU procurement units and campus programs: Campuses can move routine mid‑value purchases faster and align their small‑business outreach with statewide practice, reducing transactional overhead.
- Procurement officers with workload pressures: The expanded noncompetitive band can shorten procurement cycles for many mid‑range buys, freeing staff time for high‑value or complex procurements.
Who Bears the Cost
- State agencies and CSU procurement teams: They must revise policies, train staff, and update systems to track set‑aside use, ensure two‑quote documentation, and incorporate DGS adjustments, generating administrative costs.
- Prime contractors and larger vendors: Firms that historically won mid‑range work through open competition may lose opportunities as more awards flow to certified small businesses and DVBEs.
- Director of General Services (DGS): DGS absorbs the implementation burden of running scheduled reviews, calculating CPI adjustments, issuing guidance, and potentially defending indexing decisions.
- Oversight bodies and auditors: Expanded use of noncompetitive awards increases the monitoring load for watchdogs who must verify that agencies followed the two‑quote rule and considered responsible offers.
Key Issues
The Core Tension
The bill pits two legitimate goals against each other: broadened access for certified small businesses and DVBEs (by expanding the set‑aside band and speeding awards) versus the need to preserve robust competition, price reasonableness, and transparent legislative oversight—especially once DGS gains authority to index the cap for inflation.
The bill pushes procurement discretion toward agencies and DGS while attempting to preserve a minimum level of competition via the two‑quote requirement. That two‑quote floor is blunt: it lowers transaction costs compared with full advertising and formal competition, but it does not guarantee market testing.
Agencies could repeatedly award within the band to familiar vendors, which risks higher unit prices over time or reduced participation if certified small firms are scarce in particular commodity areas.
The CPI adjustment mechanism solves the problem of inflation eroding the cap’s purchasing power, but it creates its own complexities. The statute leaves open key implementation details—such as which CPI series DGS must use, how to round dollar amounts, and whether adjustments take effect automatically or after notice and a waiting period.
Those design choices matter because small variations change which procurements fall inside the streamlined band. Finally, shifting indexing authority to an administrative actor reduces the need for repeated legislative fixes but raises questions about accountability and whether future caps will grow without sufficient legislative scrutiny.
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