Oregon small businesses now have a new advantage when competing for certain state contracts, but the opportunity comes with one major requirement: They must be certified first.
Gov. Tina Kotek announced last week that state agencies operating under the Oregon Department of Administrative Services’ procurement authority will begin applying a preference for certified Oregon small businesses when buying goods and services.
For Salem-area businesses, the change could open the door to more public contracting opportunities, especially for companies that provide services, supplies, consulting, technology, maintenance, food, janitorial work, marketing, construction-related support or other products the state regularly buys.
But it is not an automatic win. The preference applies to businesses certified through Oregon’s Small Business Enterprise program, known as OSBE. Companies that are not certified will not receive the preference.
The program comes from House Bill 2337, passed by the Oregon Legislature in 2025, which directed the state to create a small business preference program for public procurement. Business Oregon handles the certification side through its Certification Office for Business Inclusion and Diversity, known as COBID, while DAS oversees the procurement rules for state agencies under its authority.
The first phase focuses on smaller state purchases. According to DAS, the rules apply to small procurements of up to $25,000 and intermediate procurements between $25,000 and $250,000.
That matters because those are the types of purchases where many local businesses may have a realistic shot at competing. Instead of only seeing major state contracts that feel out of reach, smaller vendors could be considered earlier in the buying process.
For purchases under $25,000, agencies must check whether a certified Oregon Small Business Enterprise can meet the need before turning to statewide price agreements. For intermediate purchases, agencies using informal quotes must seek bids from three certified OSBE firms before moving to non-certified vendors, when those businesses are available.
For written solicitations, agencies can apply a preference of more than 0% and up to 10% to certified OSBE offers. That preference is used for evaluation purposes. It does not mean the state automatically lowers the contract price, but it can help a certified small business compete against larger firms.
The state says the goal is to keep more public spending in Oregon and give small businesses a better chance at government work. DAS says small businesses make up 99.4% of Oregon’s economy and employ 53% of Oregon workers.
To qualify for OSBE certification, a business must be for-profit, have its principal place of business in Oregon, be registered domestically with the Oregon Secretary of State, have 50 or fewer employees on an annual average and have at least one year of federal tax returns filed.
The program is race- and gender-neutral. Certification is based on Oregon location and business size standards, not the owner’s race or gender.
For small businesses in Salem, Keizer and the Mid-Willamette Valley, the key question now is whether they are ready to participate. State contracting can require paperwork, registration and attention to bid systems such as OregonBuys. Certification may also require tax documents, employee count information, company details, licenses or other proof depending on the business.
That may create a barrier for some small companies, especially those that have never pursued government work before. But for businesses willing to go through the process, the new rules could make state contracts more accessible than they have been in the past.
The change does not apply to every public contract, and not every agency is required to follow it. Agencies that operate under DAS procurement authority must apply the preference. Agencies with independent procurement authority are encouraged to adopt the same approach but are not required under Kotek’s announcement.
Still, the shift gives Oregon small businesses a clearer path into a system that can be difficult to navigate.
For local business owners, the takeaway is simple: If they want the new preference, they need to get certified. Without OSBE certification, they may be watching the opportunity from the outside.