The California Department of General Services (DGS) Procurement Division has announced a purchasing threshold increase for IT and non-IT goods and services for state entities with procurement authority.
In a memo issued Friday afternoon, DGS noted that it had increased the purchasing authority of state entities based on their tier classification while also consolidating the tier classifications from four to three.
The increase, DGS noted in its memo, considered “various statutes, a Consumer Price Index (CPI) calculation, consolidation of the tier system, and opportunities to align dollar values with similar contracting processes outside of DGS-PD’s purview.”
Entities in the first tier will have purchasing authority for open-market competitive IT contracts up to $200,000; small business (SB) contracts up to $249,999.99; and disadvantaged business enterprise (DVBE) contracts up to $249,999.99.
Entities in the second tier will have purchasing authority for open-market competitive IT contracts up to $2 million; SB contracts up to $249,999.99; and DVBE contracts up to $249,999.99.
Entities in the third tier will have the purchasing authority for open-market competitive IT contracts up to $8 million; SB contracts up to $249,999.99; and DVBE contracts up to $249,999.99.
According to the memo, state entities are required to update their policies and procedures to reflect the new thresholds by March 31, 2026.
The memo and more information about these increases can be found here.
DGS Increases Departments’ IT Purchasing Authority
What to Know:
- The purchasing threshold has been raised, meaning agencies can spend more without needing to go to formal procurement.
- The Department of General Services has also consolidated its classifications for agencies' purchasing authority, reducing the number of tiers from four to three.
