State Department of General Services updates definition of small business

The state Department of General Services (DGS) updated the definition of a small business, effective Jan. 1.

The change raises the revenue limit from $38.5 million to $47 million, putting the limits on par with the U.S. Small Business Administration, and taking into account inflation. It also means more businesses will qualify for programs they previously were priced out of qualifying for such as opportunities for small businesses (SBs), small diverse businesses (SDBs), and veteran business enterprises (VBEs) to compete for state business contracts.

The last revenue limit threshold increase was in 2018.

Gov. Josh Shapiro signed an executive order in September, instructing DGS to make the increase.

“With Executive Order 2023-18 taking effect, the Commonwealth can continue building on the steps that the Shapiro-Davis Administration has already taken to open new doors of opportunity for small, small diverse, and veteran-owned businesses,” DGS Secretary Reggie McNeil said. “Being able to accept more small businesses is instrumental to increasing their participation in state contracts, and providing assistance to them is key to retaining their business. We have been taking the steps to fully implement the Executive Order and now we can move at full speed to put it to work.”

The order also directs DGS to lead and coordinate efforts with other agencies to grow their total operational spend and participation in the Small Business Reserve program.