PHILADELPHIA, PA — On Tuesday, September 5, Governor Josh Shapiro signed Executive Order 2023-18 to increase opportunities for small and small diverse businesses to compete for state contracts, 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.

This Executive Order directs DGS, under the leadership of Secretary Reggie McNeil, 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.

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, Secretary 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.

Furthermore, 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. The PACIP will be chaired by Lieutenant Governor Austin Davis, with DGS Secretary Reggie McNeil and the Department of Transportation (PennDOT) Secretary Mike Carroll serving as co-vice chairs.

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.

DGS and PennDOT’s work to create an inclusive and accessible contracting environment to increase small and small diverse business spending by Commonwealth agencies will include partnering withthe Department of Community and Economic Development (DCED) to connect businesses with resources and promote financing and capital access options, regularly reporting on agencies’ procurement spending levels, more efficient matching of prime contractors with available small and small diverse subcontractors, increased participation in mentor-protegee programs across the Commonwealth, and partnering with the Commonwealth Office of Digital Experience (CODE PA) to improve small businesses’ online interactions with the Commonwealth.

“We need to do more to help our small and small diverse businesses compete for state dollars,” said Governor 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.”