Seeking to increase opportunities for small and diverse small businesses to compete for state contracts, make the Commonwealth procurement process more accessible, and take practical steps to help these businesses grow, succeed, and create good-paying jobs, the Pennsylvania Governor Josh Shapiro signed Executive Order 2023-18.

Shapiro said in a press release:

We need to do more to help our small and small diverse businesses compete for state dollars.

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During their campaign, Governor Shapiro and Lt. Governor Davis spoke often about empowering small businesses and diverse small businesses to expand economic opportunity and help build generational wealth.

“That will require policies like those I’m announcing today, but most importantly, it will require a Governor who gives a damn and makes sure these businesses are part of our collective progress. It’s not just the right thing to do – it's the smart thing to do,” added Shapiro.

What is it about?

According to the announcement, the Executive Order directs the Department of General Services (DGS), under the leadership of Secretary Reggie McNeil, to lead and coordinate efforts with agencies to increase their total operating spending and participation in the Small Business Reserve program (SBR) of the Commonwealth, encourage more competitive acquisitions, and increase the amount of money going into the hands of small and diverse small businesses.

Already with the governor's signature, the DGS will develop a new methodology to determine the income limit for small businesses, which will result in an increase in the number of businesses that qualify as small businesses.

To this end, Secretary McNeil will update the Commonwealth small business definition, increasing the revenue limit from $38.5 million to $47 million, ensuring that more small businesses can qualify.

“By supporting our small diverse businesses, we’ll not only grow our economy and strengthen our communities – we’ll also create more competition for Commonwealth business and secure higher quality products and better results for all Pennsylvanians,” highlighted Shapiro. 

Our small businesses told me loud and clear — they've built successful businesses, but it's still too hard and too confusing to compete for state contracts.

And it's especially true for women, minority, and veteran-owned businesses.

WATCH: https://t.co/QdbSeDuguN

— Governor Josh Shapiro (@GovernorShapiro) September 5, 2023

In addition, the Executive Order also establishes the Pennsylvania Advisory Council for Inclusive Procurement (PACIP) to advise Commonwealth agencies on ways to make state contracting opportunities more inclusive.

PACIP will be chaired by Lieutenant Governor Austin Davis, with DGS Secretary Reggie McNeil and PennDOT Secretary Mike Carroll as co-vice chairs.

As part of the Shapiro Administration's commitment to transparency and accountability, DGS will publish semi-annual data on each agency's total operating expenditure for SBR procurement.

"I’ve seen firsthand that small businesses owned by women and Black and brown Pennsylvanians are vital to our communities. They are gathering places – centers for connection and conversation, and they are job creators and innovators," said Lieutenant Governor Davis.

Working for small businesses

According to data released by the state office, since Executive Order 2015-11 was signed under the Wolf Administration in 2015, the Commonwealth has moved to increase total Commonwealth spending on contracts with miscellaneous small businesses, increasing the total amount spent by diverse small businesses from 4.9% in 2015 to 11.3% in 2022.

Under the Shapiro administration, DGS has already made significant strides in supporting diverse small businesses by reducing the time it takes for BDISBO to certify a small business by 33% and implementing a timely payment policy so that payments are received faster in state contracts.

"We must support small-business owners by cutting red tape and putting resources into economic development and innovation. That’s why today’s Executive Order is so important. We’re going to go out and actively encourage small businesses and small diverse business owners to compete for government contracts and become Commonwealth vendors. Small and small diverse businesses deserve a better shot at competing for state contracts – and the Shapiro-Davis Administration is going to make sure they get it,” underscored Davis. 

DGS and PennDOT will also work in partnership to further enhance the Commonwealth's open, inclusive, and accessible contracting environment to increase small business and diverse small business spending as a percentage of all dollars paid for goods and services by agencies for their respective programs.

Under the Executive Order, both agencies will also conduct meaningful outreach activities for the diverse small business community and provide key technical support to qualified small businesses interested in competing for state contracts.

DGS and PennDOT will also designate employees to serve on an interagency working group that will assist PACIP as set forth in the Executive Order.

"I look forward to working with Secretary McNeil to engage small businesses and ensure partnerships are in place to provide technical assistance so they can compete for state contracts, including financial assistance programs, and make it easier for them to do business with the Commonwealth and its contracting partners,” pointed out Mike Carroll, PennDOT Secretary.