California Code, Penal Code - PEN § 11148

The agencies listed in Section 11146 may contract with any vendor demonstrating the capability to conduct such background searches in a timely manner and with the assurance of complete confidentiality. Any such vendor shall (a) be a licensed private investigator as defined in Section 7521 of the Business and Professions Code; (b) have been in business for at least five years; (c) be able to furnish bank references; (d) provide a minimum of one million dollars ($1,000,000) in liability insurance, with the contracting agency being named as an additional insured; and (e) be able to provide services, via subcontracts if necessary, in all areas of the state.

No contract shall be let unless it provides therein that the cost per applicant for a search, including administrative costs, shall not exceed forty dollars ($40). The state shall not be liable for any amount in excess of forty dollars ($40) per applicant.