Pennsylvania Launches New Policies to Increase Diversity Among State Contractors
June 15, 2020
Continuing his commitment to small businesses (SBs) and small diverse businesses (SBDs), Governor Tom Wolf announced new procurement changes to improve opportunities for minority-, women-, LGBT-, veteran- and disabled-owned businesses ¬– to compete for state government contracts and succeed in the commonwealth’s economy.
“This is another important step forward in the ambitious project my administration launched five years ago to open doors for small and diverse businesses in state contracting and to make the process more inclusive and diverse,” said Governor Wolf. “We have made progress, but there is more work to do. We cannot allow some people to be shut out of a chance to get a state contract. Our economy and our communities work best when everyone has a fair chance of success.”
Today’s actions are the direct result of the governor’s Diversity, Inclusion and Small Business Opportunities in Commonwealth Procurement and in Pennsylvania’s Economy executive order signed in 2015. The order created the Bureau of Diversity, Inclusion and Small Business Opportunities (BDISBO) within the Department of General Services, the Governor’s Advisory Council on Diversity Inclusion and Small Business Opportunities and led to the 2018 Statewide Disparity Study which examined disparities in the commonwealth’s contracting system and made recommendations for improvement.
“These policy and program changes will allow us to increase opportunities for small diverse businesses in state contracts,” said Department of General Services Secretary Curt Topper. “Historically, the state contracting process has been uneven, inconsistent and unfair in providing opportunities for SBs and SDBs to do business with the commonwealth.”
There are three new changes taking effect.
First, each competitive state procurement will use goal setting for SDB participation on each solicitation with the intent to achieve a 26.3 percent state contract spending with SDBs .The goals are determined using an analysis and calculation of the percentage of DGS verified SDBs available to do the specific work as determined by the Disparity Study and other factors. Goal setting replaces the previous scoring process used to evaluate proposals and starts today for construction solicitations over $300,000 and on August 17, 2020 for goods and services solicitations over $250,000.
Second, the department has set a goal of 4.6 percent of state contract spend to veteran-owned businesses through the new Veteran Business Enterprise (VBE) program as recommended by the Commonwealth Disparity Study. To increase the availability of VBEs, the commonwealth will now consider a Service-Disabled Veteran-Owned Small Business Enterprises as both an SDB firm and a VBE firm. This consideration is granted providing the applicant holds approved third-party certification from the Veterans Affairs Vets First Verification Program and eliminates the need to go through an additional third-party SDB certification process. The department will consider contract-specific goals for VBE participation on each individual solicitation over the dollar thresholds identified for SDB goal setting, and the VBE contract specific goals will be calculated based upon availability of VBE firms.
Third, the administration has tasked all state agencies under the governor’s jurisdiction to have at least 15 percent of their contract spending go to eligible, state-certified small businesses through the Small Business Reserve (SBR) Program. The program helps all DGS-certified small businesses to compete as prime contractors on state contracting opportunities. Each agency has an executive-level employee responsible for ensuring the goal is achieved.
“We are committed to achieving the commonwealth’s goal to do 26 percent of our business with small diverse businesses has truly been a group effort,” said Deputy Secretary for Diversity, Inclusion and Small Business Opportunities Kerry Kirkland. “Through the hard work of the Bureau of Diversity Inclusion and Small Business Opportunities staff along with the Advisory council and our legislative supports, we are positioning our small and small diverse businesses for success and sustainability in our economy.”
Kirkland praised the hard work of the BDISBO staff and involvement of the Governor’s Advisory Council on Diversity, Inclusion and Small Businesses Opportunities has led to the implementation of key policy and program changes such as: using the best value contracting method to increase SDB participation in contracting opportunities; creating the Agency liaison Program to ensure that SB/SDB contracting opportunities are part of all annual commonwealth agency purchasing plans; and creating the Mentor-Protégé Program that pairs prime contractors and/or suppliers with DGS-verified SDBs to provide developmental assistance and help them successfully solicit and perform on commonwealth contracting opportunities.
Visit the Bureau of Diversity, Inclusion, and Small Business Opportunity for more detailed information on the new policies and programs as well as the Wolf Administration’s efforts to diversity state contracting and opportunities for small and diverse businesses.