Advancing equity for Virginia’s Small, Women, Minority, and Service Disabled Veteran-Owned Businesses

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A recent order established goals and programs aimed at expanding opportunities for Virginia’s small-, women-, minority- , known as “SWaM,” and service disabled veteran-owned businesses.

Governor Northam has directed the executive branch agencies and institutions that have statutory authority over procurement to achieve a target of procuring 42 percent of discretionary spending from certified small businesses.

The executive order also maintains a set-aside for certified micro businesses, which have fewer than 25 employees and no more than $3 million in average annual revenue over a three-year period.

“Small businesses are a vital economic engine for Virginia, making up 97 percent of all businesses, but we know there is work to do to ensure they have equal opportunity to grow and succeed in our Commonwealth,” said Governor Northam. “With this executive order , we are strengthening our commitment to expanding small business participation in state contracting and achieving equity for our women- and minority-owned businesses,” the governor’s office said in an announcement of the order.

In addition to funding SWaM and service-disabled veteran businesses, the order directs the development of an updated study to determine whether there is disparity in the marketplace regarding contracting with women- and minority-owned businesses.

Virginia previously produced disparity studies in 2004 and 2011 finding that 1.27 percent (2004) and 2.82 percent (2011) of total state contracts were awarded to women- and minority-owned businesses. Conducting an updated disparity study is the first step toward determining whether these businesses still face disparate treatment and tailoring new programming to address the findings of the report.

“State contracting provides the catalyst for economic opportunity and expands access for many businesses,” said Secretary of Commerce and Trade Brian Ball. “It is imperative for Virginia to maximize the participation of small businesses and to ensure that there is equity and transparency in the process.”

The executive order continues the set-aside programs for certified small businesses for the purchase of up to $100,000 for goods and nonprofessional services, and increases the threshold to $80,000 for professional services, and $10,000 for micro businesses.

There are no set-aside programs specific to women- and minority-owned businesses, but such programs will be evaluated as part of the disparity study process.

“While establishing these goals and programs is an important first step, we now must ensure every applicable business is aware of the opportunities and how to take advantage of them,” said Secretary of Administration Keyanna Conner.

The Virginia Department of Small Business and Supplier Diversity (DSBSD), the agency responsible for certifying small businesses, will develop new programs to expand outreach and resources for the small business community. DSBSD will also work with the Department of General Services (DGS) and other state agencies to perform vendor outreach and to ensure that the Commonwealth is appropriately tracking compliance with the Commonwealth’s procurement targets.

“This vendor outreach piece also will help us better understand the barriers faced by these business so we can work to eliminate them,” Connor said.

“DGS, with its statewide procurement responsibilities, is excited to support this initiative to achieve the goals outlined in the executive order,” said Director of the Department of General Services Joe Damico. “Virginia will continue to leverage the functionality of the Commonwealth’s electronic procurement system, eVA, to ensure access to contracting opportunities while providing transparency to the more than $6 billion in annual discretionary spending.”

Along with other measures outlined in the executive order, Governor Northam’s commitment to this plan of action will require cabinet secretaries to monitor their agencies’ and institutions’ spending with all certified small businesses.

The Secretary of Commerce and Trade will assess overall state performance and report quarterly to the Governor.

“This executive order provides high-level leadership from the Administration, which is a primary component of any supplier diversity and procurement initiative,” said Director for the Virginia Department of Small Business and Supplier Diversity Tracey Wiley. “This is a critical step in advancing the 42 percent procurement target while aligning the Commonwealth’s procurement objectives with the growth of small businesses.”