Pennsylvania Sets New Record with Over $1 Billion in Expenditures with Small and Diverse Businesses

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PENNSYLVANIA — In a historic first, Pennsylvania has spent more than $1 billion with small businesses (SBs), small diverse businesses (SDBs), and veteran business enterprises (VBEs) in the 2022-23 fiscal year. The Department of General Services (DGS) announced this milestone in its 2022-23 Small Business Opportunities Program Annual Report, marking a significant step in the state’s commitment to fostering economic growth and diversity.

The report, prepared by DGS’s Bureau of Diversity, Inclusion and Small Business Opportunities (BDISBO), reveals that spending with SDBs and VBEs reached $690 million, up from last year’s $536.6 million. SDBs alone received a record-breaking $678 million or 12.2 percent of the Commonwealth’s spending for goods and services during the same period. Meanwhile, SBs received $447 million, making up 8 percent of the Commonwealth’s spending on goods and services.

The increase in state contract payments to small businesses led to the creation of over 11,700 jobs, up from nearly 10,000 in the previous fiscal year. This growth underscores the Commonwealth’s significant economic impact as a major purchaser of goods and services within Pennsylvania communities. Additionally, these state contract payments generated an estimated $220 million in tax revenue at the federal, state, and local levels.

To further support small and diverse businesses, the DGS implemented several improvements to its programs and policies through BDISBO. These changes include reducing the certification time for small businesses by 33% and implementing a prompt pay policy to ensure subcontractors receive payment within 10 days of the prime contractor receiving payment from the Commonwealth. The DGS also conducted frequent Supplier Search workshops aimed at educating minority-, women-, and veteran-owned businesses about available contracting opportunities and started notifying businesses of upcoming contracting opportunities on a monthly basis.

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In October, the DGS hosted its inaugural Small Business Empowerment Summit, a two-day conference designed to connect small, diverse, and veteran-owned businesses with state contracting opportunities. The summit provided Pennsylvania’s small businesses with insight into Commonwealth procurement opportunities, resources for capital, and details on how the Shapiro-Davis Administration is working to facilitate state contracting for them.

Building on the progress outlined in the report, Governor Shapiro signed Executive Order 2023-18 in September to increase opportunities for small and diverse businesses to compete for state contracts, streamline the Commonwealth procurement process, promote financing and capital access options, and establish the Pennsylvania Advisory Council for Inclusive Procurement (PACIP). Chaired by Lieutenant Governor Davis, the PACIP held its first meeting last week, marking another step toward creating a more inclusive and diverse business environment in Pennsylvania.

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