Tuesday, February 2, 2010

House Bills 2140-2149 aims to level the playing field for small, minority, women and disadvantaged-owned businesses-PA

Bills support participation of diverse firms

Philadelphia Business Journal - by Athena D. Merritt Staff writer

A bipartisan package of bills introduced this month in Harrisburg aims to level the playing field for small, minority, women and disadvantaged-owned businesses competing for state contracts.

Efforts are already under way to push the 10 House bills through by the time the state’s budget is passed, which under the state’s constitutional deadline must be done by June 30.

The bills (House Bills 2140-2149) would implement 16 sets of recommendations made by the House Select Committee on Minority, Women, and Disadvantaged Business Enterprise Inclusion in September to improve diversity in state contracts and purchasing. Legislators will be able to vote on the package as a whole under House Bill 2140, which contains all but one measure, or individually, state Rep. Jake Wheatley Jr., D-Allegheny, said.

“It’s kind of a strategy we feel could be effective, say the majority of members don’t want the whole package they get a chance to vote on the individual ones,” said Wheatley, who chaired the committee and sponsored H.B. 2140. “Our hope is the whole package will be selected [because] you’re going to need all of the recommendations to make the type of change we really hope for.”

The recommendations grew out of testimony collected at five public hearings held over the course of last year, including one in Philadelphia. The most common barrier cited by businesses was access to capital, Wheatley said. Slow payment by prime contractors, lack of capacity and access to contracts have also served as obstacles, which are among the issues the bills seek to address, Wheatley said. Getting the legislation adopted is only the first step in changing a system that is failing, said Wheatley and others, including Della Clark, president of the Enterprise Center in West Philadelphia.

“Legislation is a start, but you also need enforcement and you need someone who can be a true leader for the change,” Clark said. “You can’t just put a law in place and expect people are going to follow that law.”

Included in the package are bills that would establish a mentor/protégé program for small businesses, create a statewide bonding program and cut the length of time prime contractors have to pay subcontractors from 14 to five days. Also included is a measure that would set a goal of sending 25 percent of procurement and construction dollars to disadvantaged businesses in all state contracts and grants. The 25 percent goal would not be the floor, but the expectation, said Wheatley, who would like to see an even higher level of participation.

“A lot of what we are talking about is an attempt to try and shift the mindset and culture of how they look at minority and women-owned businesses,” Wheatley said. “They see it as a giveaway of business, this is not they case. They are very successful and good at what they do. They are just not given the same opportunity to do it.”

Last year, minority and women-owned businesses combined secured 8.85 percent or $53.7 million of the more than $606 million in contracts awarded by the state. Angelo Perryman, president and CEO at Perryman Building and Construction Services, who testified at the Philadelphia hearing is among those who hope to see improvement.

“I think everybody right now understands what disadvantaged business means but the procurement officers,” Perryman said. “What we are saying is, there are businesses that are ready, willing and able and just not given the opportunity to grow their business.”

Wheatley said the package of House bills have been referred to the state government committee. The legislation has also been introduced in the Senate, he said.

Pa. Bills Highlights
A snapshot of some of the bills included in the House legislative package aimed at increasing diversity in state contracts and purchasing.

H.B. 2141 Changes the Definition of Small Business, by increasing the permitted employee limit from 100 to 250 and adding a gross revenue limit of up to $45 million.
H.B. 2142 Creates Statewide Bonding Program to enable small businesses and disadvantaged businesses to build capacity and competitively bid on state and other public contracts. The Department of General Services would be appropriated $5 million annually for the program.
H.B. 2144 Establishes Secretary of Minority & Women Business Development, a cabinet-level position
H.B. 2145 Establishes Mentor/Protégé Program to assist, support, and enable small businesses to successfully compete for prime and subcontract awards by partnering with large companies (mentors) in state contracts.
H.B. 2147 Establishes Small Business Reserve to increase economic opportunities for small businesses to bid on state government contracts without competing with larger businesses. Each state agency would set aside 10 percent of their procurement dollars beginning at $25,000 up to $5 million into its Reserve fund.
H.B. 2148 Prime Contractors’ Performance would require prime contractors to provide documentation of a good faith effort at meeting the state’s disadvantaged business subcontractor participation requirements.



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