Small businesses can now compete with the big boys after Gov. Josh Shapiro signed an Executive Order increasing opportunities for them to compete for state contracts.
Shapiro signed Executive Order 2023-18 that will make the Commonwealth procurement process more accessible, and take actionable steps to help small businesses and small diverse businesses grow, succeed, and create good-paying jobs.
“We need to do more to help our small and small diverse businesses compete for state dollars,” said Shapiro. “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. 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.”
“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 Lt. Governor Austin Davis. “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.”
The Executive Order directs the Department of General Services (DGS) to lead and coordinate efforts with agencies to increase their total operational spend and participation in the Commonwealth’s Small Business Reserve (SBR) program, foster more competitive procurement, and increase the amount of money that goes into the hands of small and small diverse businesses. As part of the Shapiro Administration’s commitment to transparency and accountability, DGS will post semiannual data for each agency’s total operational spend for SBR procurements.
“Since day one of this Administration, Governor Shapiro has prioritized the need to improve the experience for Pennsylvania’s small business community and widen the gate of opportunity to state contracts,” said DGS Secretary Reggie McNeil. “With that mandate, DGS has held 18 stakeholder events to engage close to 800 small businesses Commonwealth-wide, and I have personally met with countless potential vendors and partners. Based on the feedback that we have received from these interactions, I am certain that this new Executive Order is going to fill many gaps for our small business community. Actions like this will continue changing the narrative around doing business with the Commonwealth and build up Pennsylvania’s small business community – and we are moving at the speed of business.”
DGS and PennDOT will also work in partnership to further improve the Commonwealth’s open, inclusive, and accessible contracting environment to increase its small business and small diverse business spending as a percentage of all dollars paid for goods and services by the agencies for their respective programs. Under the Executive Order, both agencies will also conduct significant outreach to the small diverse business community and provide key technical support to qualifying 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 the PACIP as set forth in the Executive Order.
Effective upon the Governor’s signing, DGS will develop a new methodology for determining the revenue limit for small businesses that will result in an increase in the number of businesses that qualify as small businesses. As a first step, McNeil will update the Commonwealth’s definition of a small business by raising the revenue limit from $38.5 million to $47 million, ensuring more small businesses can qualify.
“Opening the doors wider to lift up small and diverse businesses requires institutional buy-in at all levels,” said Della Clark, President and CEO of The Enterprise Center. “We view this Executive Order as the first step to combining contracts, capital, and expertise to intentionally grow small and diverse led businesses across the Commonwealth.”
Read Executive Order 2023-18, Improving State Government Contracting Opportunities for Pennsylvania’s Small Business and Small Diverse Businesses.