SB900 Impacts on Diverse and Veteran Owned Small Businesses

By Benjamin Norman


A senate bill has been proposed in Pennsylvania with the goal of increasing the participation of small veteran-owned and diverse businesses in contracts with the state.[1] No longer will a business be required to have 100 employees or less to be classified as a small business.[2]  Under the proposed bill, all that is required is that the business not be dominant in its field of operation.[3]

The bill is broken down into three sections: 1) veteran business enterprises entering into state procurement contracts;[4] 2) small diverse businesses not including those that provide construction and design professional services;[5] and 3) small diverse businesses that provide construction and design professional services.[6]

The veteran business enterprise section just refers to any small business that is not dominant in its field and owned by veterans.  First and foremost, the bill delegates a lot of the power to the Department of General Services (“Department”) to create regulations and enforce the provisions set forth.[7] Nonetheless, the bill does provide some guidelines for the Department to follow. One of these guidelines is that the Secretary of the Department must set a goal that veteran owned businesses must participate in 3% of state procurement contracts.[8] This is just a minimum number and the Secretary does have the power to set a higher target number.[9] The Department is then given the power to undertake actions such as giving special publications out to veteran owned businesses, including veteran owned businesses on a mailing list, training sessions for the agencies of the state that will contract with veteran owned businesses, and many other actions designed to achieve the participation goals.[10] If the bill becomes law, veteran owned businesses should be on the lookout for special material designed to get them bidding on and involved in contracts with state agencies. The last thing worth noting is that the amount of bonding needed to be posted to enter into a contract may be lowered to increase the participation of veteran owned businesses, and such businesses shall be exempt from posting bonds for contracts under $25,000.[11]

The second section applies to small diverse businesses which are defined as, “a small business owned or controlled by a majority of persons, not limited to members of minority groups, that have been deprived of the opportunity to develop and maintain a competitive position in the economy because of economic and social disadvantages.”[12] The main policy is to encourage small diverse businesses to engage in procurement contracts with state agencies. Much of the provisions closely tracks the provisions on veteran owned businesses. Very similar powers are given to the Department to regulate under this section, however, they are given the added guidance to develop race and gender-neutral measures to make sure that all firms get the chance to participate.[13] The third and final section of the bill by and large just extends the second section on small diverse businesses to construction and design professional services.[14]

Small diverse and veteran businesses should be aware of Pennsylvania’s admirable goal to increase their participation in procurement contracts with executive agencies. If the bill does get passed, these businesses will have plenty of opportunity to bid on state contracts.

[1] S. 900, 2021-2022 Leg., 250th Gen. Assemb. § 9601-9609, 2101-2111, 21A01-21A12 (Pa. 2021). 

[2] Id. at § 2101

[3] Id.

[4] Id. at § 9601-9609

[5] Id. at § 2101-2111

[6] Id. at § 21A01-21A12

[7] Id. at § 9602

[8] Id. at § 9603

[9] Id.

[10] Id. at § 9604

[11] Id. at § 9605

[12] Id. at § 2102

[13] Id. at § 2104

[14] Id. § 21A01-21A12.

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