Pennsylvania increases spending through targeted contracts

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Gov. Tom Wolf is touting increased government spending during his administration, including a growing share of state contracts going to minorities, veterans, women and LGBT businesses.

Wolf cited a recently released Small Business Opportunities Report for fiscal year 2020-21 that showed Pennsylvania increased state contracts to small, diverse and veteran-owned businesses by 30% over the previous year.

“I am excited to share that for the first time in the history of the commonwealth, more than 20 percent of our total state contracting spend went to small, diverse and veteran businesses,” Wolf said. “This is a true milestone for our efforts to improve diversity, equity, inclusion and fairness in state contracting, and builds on our work throughout this administration to provide opportunities for small, diverse and veteran-owned businesses to succeed.”

The report shows spending for fiscal year 2020-21 was up 15% to $4.2 billion from $3.7 billion the previous year, with 20.25%, or nearly $856 million, going to contracts with “small businesses, small diverse businesses and veteran business enterprises.”

Contracts with small diverse businesses – those headed by minorities, women, LGBT people or the disabled – increased by the biggest percentage over the previous year, going from 9.63% of total spending to 11.72%. About half of the small diverse businesses are owned by women, 28% are owned by minorities and 10% by service-disabled veterans. About 6% are owned by minority women and another 4% by non-disabled veterans. LGBT and disability-owned businesses comprise about 1% each.

The increased spending with small diverse businesses is due in part to $43 million in spending with small businesses through 668 contracting opportunities with the Small Business Reserve program, created by Wolf’s Executive Order 2011-09. Another Wolf executive order, 2015-11, created the Bureau of Diversity, Inclusion and Small Business Opportunities and tasked commonwealth agencies with spending 15% of contracts with small businesses.

A similar program for small diverse and veteran businesses directed 340 projects worth $1.7 billion to small diverse businesses and increased spending with veteran businesses by $4 million, according to a Wolf press release.

“Since 2015, the commonwealth has spent more than $3.5 billion with small, diverse and veteran businesses,” Pennsylvania Department of General Services Secretary Curt Topper said. “The growth of our programs and progress we’ve made has been the direct result of a committed and dedicated effort to create opportunity and equity for our small, diverse and veteran business communities. Now is the time when we must continue the dedication and commitment to ensure the continuation of this success in the years ahead.”

Wolf and Topper are leveraging the increased spending with small businesses to pressure lawmakers in the General Assembly to pass Senate Bill 900, which would codify Wolf’s Bureau of Diversity, Inclusion and Small Business Opportunities as a permanent division of the Department of General Services.

Wolf argues more than 5,000 small, diverse and veteran-owned businesses in Pennsylvania now depend on the programs administered by the bureau.

“This fall I was proud to stand with a bipartisan group of legislators to introduce Senate Bill 900,” Wolf said. “Now, I call on the Republican leaders in the General Assembly to pass Senate Bill 900 and send it to my desk. Small, diverse and veteran businesses in Pennsylvania deserve the security that this legislation will provide.”

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