Record amount spent on contracts with Pa. small, diverse, and veteran businesses

The Pennsylvania Department of General Services (DGS) announced Wednesday an additional $1.24 billion was spent on contracts with small businesses, small diverse businesses, and veteran-owned business enterprises for a second consecutive year. 

This surpasses the $1.1 billion spent in the 2022-23 fiscal year – and marks another record investment after Gov. Josh Shapiro implemented improvements to the contracting process. 

“This record-breaking $1.24 billion investment in small, diverse, and veteran-owned businesses reflects the Shapiro-Davis Administration‘s unwavering commitment to fostering economic growth across the commonwealth,” DGS Secretary Reggie McNeil said in a statement. “By reducing certification times, implementing prompt pay policies, and hosting events like the Small Business Empowerment Summit, we are breaking down barriers and creating real opportunities for these businesses to thrive. 

“This is about more than contracts—it’s about building stronger communities, creating jobs, and ensuring every business has a fair shot at doing business with the commonwealth,” added McNeil. 

According to a release, DGS has implemented improvements to its programs and policies administered by the Bureau of Diversity, Inclusion, and Small Business Opportunities (BDISBO) that enhances the overall experience of small, small diverse, and veteran-owned businesses looking to do business with the state and increase the number of opportunities available. 

Steps taken by the DGS include the following: 

• Reducing the time taken 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. 

• Implementing a new communication practice to proactively notify over 5,000 registered small businesses and over 300 small business advocates and stakeholder organizations of upcoming procurement opportunities. 

• Partnering with the Department of State to collect voluntarily submitted information from businesses so that BDISBO can determine if they qualify as SBs, SDBs, or VBEs and connect interested businesses with commonwealth contracting opportunities. 

• Conducting 64 virtual and in-person outreach events that reached over 3,000 participants across Pennsylvania aimed at educating the small business community on how to do business with the commonwealth. 

• Launching a mentor-protégé program to connect 12 Pennsylvanian small businesses with six prime contractors to equip them with the tools they need to better compete for state contracts. 

• Implementing a new virtual business development training curricula containing six modules on the commonwealth’s procurement process and policies for small businesses to access at no cost.  

The Shapiro-Davis Administration has launched a series of targeted efforts to help small, small diverse, and veteran-owned businesses submit successful bids and deliver better services for Pennsylvanians. 

“Small businesses are the economic engines and lifeblood of our communities, and they represent more than 99 percent of the businesses here in Pennsylvania and across the country,” said Lt. Governor Austin Davis. “As we’ve travelled the commonwealth, Governor Shapiro and I have heard over and over again that small-business owners want a level playing field to compete for state contracts. 

“That’s why we’re focusing on reaching out to small businesses, updating our policies and creating innovative programs that help small businesses learn how they can be successful with procurement opportunities. We’re encouraged by the progress we’re making and thrilled that our efforts are generating nearly 12,000 jobs,” added Davis. 

The 2023-24 report highlights increased payments for small businesses (SBs), small diverse businesses (SBDs), and veteran business enterprises (VBEs) that continue to spur economic growth across the state: 

• Spending with SDBs and VBEs reached a new high of $692 million, which includes a 10 percent increase in combined spending with Black American- and Hispanic American-owned small businesses from $136.2 during the 2022-23 fiscal year to $150.7 million during the 2023-24 fiscal year. 

• SBs (excluding SDBs and VBEs) received $548 million in payments, which represents about 9.5% of total commonwealth spending for goods and services during the 2023-24 fiscal year. That is up from $447 million, or about 8% of total state spending for goods and services during the prior fiscal year. 

• The commonwealth’s total spending with SBs resulted in an estimated economic impact of 11,600 jobs, $180 million in federal taxes, and $115 million in state and local taxes. 

DGS also announced the appointment of Dr. Erica Patterson to the leadership role of overseeing BDISBO’s work as Deputy Secretary for Diversity, Inclusion, and Small Business Opportunities. Since 2015, she has been Director of Contracts Management and Supplier Diversity at Philadelphia Gas Works, managing budgets exceeding $150M for professional and non-professional services while actively fostering the engagement and integration of diverse, local, and small businesses. 

“The PA Legislative Black Caucus applauds the appointment of Dr. Erica Patterson to lead BDISBO,” said Rep. Napoleon Nelson (D-Montogomery). “Her extensive experience in supplier diversity and procurement will be invaluable in advancing the work of BDISBO, ensuring that small, diverse, and veteran-owned businesses have a real and fair shot at success. 

“The Shapiro-Davis Administration’s efforts to expand access and level the playing field reflect a shared vision for a stronger, more inclusive economy—one where every business, regardless of size or background, can thrive.”