South Dakota Bidder Preferences: Status and What to Do

What it is

South Dakota does not run its own MBE, WBE, small business or veteran-owned certification for state purchasing. The Bureau of Administration's Office of Procurement Management applies preferences set in state law instead. Resident businesses win tied bids (SDCL 5-18A-25). A resident bidder also gets a preference against bidders from any state or foreign province that favors its own residents, equal to that state's preference (SDCL 5-18A-26).

Who qualifies

• A resident is a business licensed to do business in South Dakota with a "substantial and bona fide place of business" in the state, operating from within the state for at least 1 year before the award (SDCL 5-18A-1).
• Partnership or association members must have been residents for at least 1 year before bidding (per the Texas Comptroller's summary of SDCL 5-18A-1).
• An out-of-state corporation is not a resident if its home state enforces or prefers resident bidders.
• Qualified agencies are South Dakota nonprofits serving people with disabilities and certified by the Department of Human Services. They rank ahead in ties.
• No ownership, race, sex, size or veteran test applies.

What it means for your bids

• Ties (equal price and quality, with delivery cost counted) are broken in this order: qualified agency, resident over nonresident, resident manufacturer over resident non-manufacturer, resident with its principal place of business in South Dakota, then a nonresident that provides or uses South Dakota supplies or services.
• Out-of-state bidders from states with in-state preferences can lose to a resident by the amount of their own state's preference.
• If no preference breaks a tie, the office may award by lottery among the tied low bidders or rebid (Vendor Manual).
• Public improvement contracts: before signing, the winning bidder certifies that nonresident subcontractors provide no more than 20% of the labor cost, or more only because resident contractors were not available at competitive prices (SDCL 5-18B-6).
• Motor vehicles must be bought or leased from licensed South Dakota dealers (Vendor Manual).

How to get certified

There is no certificate.

1. Register in the ESM Source system through the "Register to Bid" link on the vendor page: https://boa.sd.gov/central-services/procurement-management/procurement-management-vendorInfo.aspx. The Vendor Manual says "No registration fees are required" for the bidder list. Optional ESM services cost extra.
2. Pick your commodity codes. You get notices for the categories you select.
3. Corporations and similar entities must register with the Secretary of State before a contract can be awarded.
4. Keep proof of your South Dakota place of business and 1-year history.

Watch out for

• State highway construction contracts fall outside the state procurement chapters (per the Texas Comptroller's summary of SDCL 5-18A-22).
• The Vendor Manual includes a contract clause asking contractors to use "best efforts" to subcontract with minority business enterprises on some contracts over $5,000. It is not a certification or a bid preference.
• The Vendor Manual is dated August 2024. It also mentions an annual fee "if required," which conflicts with its no-fee line. Ask the office.
• Bid emails come from noreply@esmsolutions.com and may land in junk mail. ESM support: 877-969-7246.
• Federal DBE certification is separate and has its own page.
• Help from the Office of Procurement Management: 605-773-3405.

Programs in other states →

Put South Dakota's certification programs on your website

Free for chambers, associations, APEX Accelerators, SBDCs and anyone else. Paste one line where you want it. It updates itself every day and works on phones.

<script src="https://findmybids.com/embed.js" data-kind="programs" data-state="SD" async></script>

Copy codePreview

Your site doesn't allow scripts? Use this instead

<iframe src="https://findmybids.com/embed/programs?state=SD" title="FindMyBids" loading="lazy" style="width:100%;max-width:720px;height:520px;border:0"></iframe>

Copy code

Add data-theme="dark" for a dark page. A small "from FindMyBids" line stays at the bottom.

Sources

• boa.sd.gov/central-services/procurement-management/procurement-management-vendor
• boa.sd.gov/central-services/procurement-management/docs/SDVendorManual_20240822.
• sdlegislature.gov/Statutes/5-18A-25
• sdlegislature.gov/Statutes/5-18A-26
• sdlegislature.gov/Statutes/5-18A-1
• sdlegislature.gov/Statutes/5-18B-6
• comptroller.texas.gov/purchasing/bidder-preference/south-dakota.php

FindMyBids isn't affiliated with any certifying agency, and this isn't legal advice. Status can change quickly with court orders and new laws, so confirm with the program office before you rely on it.