Commonwealth Sets Record, Spends More Than $1 Billion with Small and Small Diverse Businesses for First Time Ever
December 22, 2023
The Department of General Services releases annual small business opportunities program report, highlighting record spend with small and small diverse businesses and increased economic impact during the 2022-23 fiscal year.
Opening up new doors of opportunity for small and small diverse businesses is a top priority for the Shapiro-Davis Administration – and DGS will continue to work with Commonwealth agencies to make the state’s procurement process more accessible.
HARRISBURG – Today, the Pennsylvania Department of General Services (DGS) released its 2022-23 Small Business Opportunities Program Annual Report, announcing that for the first time in Pennsylvania’s history, the Commonwealth spent more than $1 billion with small businesses (SBs), small diverse businesses (SDBs), and veteran business enterprises (VBEs) during the 2022-23 fiscal year.
The report was prepared by DGS’s Bureau of Diversity, Inclusion and Small Business Opportunities (BDISBO) and highlights record spending, including:
- Spending with SDBs and VBEs reached $690 million – an increase from last fiscal year’s reporting of $536.6 million.
- SDBs received a record high $678 million, or 12.2 percent, of Commonwealth spending for goods and services during the 2022-23 fiscal year.
- SBs received $447 million, or 8 percent, of Commonwealth spending for goods and services during the 2022-23 fiscal year.
“Securing state contracts has historically been a challenge for small businesses in Pennsylvania. Obstacles – including a lack of awareness and technical resources – have made it difficult for small businesses to compete for contracts. I can confidently say that this is changing – and the annual report reflects this,” said DGS Secretary Reggie McNeil. “The Shapiro-Davis Administration is committed to removing barriers to state contracting opportunities and opening up new doors of opportunities, and in this first year we are already seeing the positive impacts of the improvements we have made to the Commonwealth’s policies and programs related to this work – and we are focused on building on this progress.”
In 2022-23, state contract payments to small businesses created more than 11,700 jobs, increasing from nearly 10,000 jobs in 2021-22. This demonstrates the Commonwealth’s significant economic impact in Pennsylvania communities as a major purchaser of goods and services. These same state contract payments resulted in an estimated $220 million in taxes revenue at the federal, state, and local levels.
“Governor Shapiro kicked-off his first year by directing his cabinet members to place a concerted effort to increase Commonwealth agencies’ direct spend with small and small diverse businesses, and our agency thanks him for that,” said Kerry Kirkland, DGS Deputy Secretary for Diversity, Inclusion, and Small Business Opportunities. “This Administration has demonstrated an unwavering support of Pennsylvania’s small business communities, and the high value they place on strengthening BDISBO’s programs, processes, and operations is critical to ensuring Pennsylvania’s communities and economy continue to thrive.”
Under the Shapiro-Davis Administration, DGS has also implemented several improvements to its programs and policies administered by BDISBO that will enhance the overall experience of small, diverse and veteran businesses looking to do business with the Commonwealth and increase the number of opportunities available to them. These improvements include:
- Reducing the time it takes to certify a small business with DGS by 33%;
- Implementing a prompt pay policy to ensure non construction prime contractors pay subcontractors within 10 days of receiving payment from the Commonwealth;
- Conducting frequent Supplier Search workshops aimed at educating small minority-, women- and veteran-owned businesses on the available contracting opportunities within DGS’s construction and commodities bureaus; and
- Notifying businesses of upcoming contracting opportunities on a monthly basis to allow for better resource planning and statewide outreach efforts to grow the pool of registered SBs/SDBs/VBEs.
In October, DGS hosted its inaugural Small Business Empowerment Summit, a two-day conference to help connect small, small diverse, and veteran-owned businesses with state contracting opportunities in the Commonwealth. The summit gave small businesses in Pennsylvania a better understanding of Commonwealth procurement opportunities, available resources to capital, and how the Shapiro-Davis Administration is working to make state contracting easier for them.
To build on the progress outlined in the report and the work done by BDISBO, GovernorShapiro signed Executive Order 2023-18 in September, directing Commonwealth agencies to increase opportunities for small and small diverse businesses to compete for state contracts, make the Commonwealth procurement process more accessible by prioritizing small businesses, promote financing and capital access options, and establishing the Pennsylvania Advisory Council for Inclusive Procurement (PACIP). Lieutenant Governor Davis, who chairs the PACIP, convened the first meeting of the council earlier this week.
“It’s important to know where you’re starting from whenever you’re planning where you want to go, and this report shows us that the Commonwealth has made significant strides to expand contracting opportunities for small businesses, including those owned by women, veterans and Black and brown Pennsylvanians,” said Lieutenant Governor Austin Davis. “However, there is much more work that needs to be done, and that’s why we’ve convened the Pennsylvania Advisory Council for Inclusive Procurement. I look forward to hearing from our council members in the coming months, as we strategize a path forward to create ladders of opportunity for every Pennsylvanian, no matter what they look like or where they live.”
For more information about DGS Bureau of Diversity, Inclusion and Small Business Opportunities, visit the Department of General Services website.