Harrisburg, PA — The Pennsylvania Department of General Services (DGS) announced today that the Shapiro-Davis Administration spent nearly $1.5 billion with small, small diverse, and veteran-owned businesses during FY 2025-26 — a 24 percent increase over the last fiscal year. The Office of Business Inclusion and Supplier Development (BISD)’s FY 2025–26 Annual Report marks the second year under Governor Josh Shapiro’s leadership that the Commonwealth has reached a new record high for small business procurement reporting.
In 2023, Governor Shapiro signed Executive Order 2023-18, directing Commonwealth agencies to expand contracting opportunities, strengthen support for small businesses, and improve accountability for how procurement dollars are spent. These results build on that work, continuing to remove barriers and help small businesses compete for Commonwealth contracts.
"Small businesses employ 2.5 million people in Pennsylvania, about half of our state's private workforce, and they are the heart and soul of our communities," said Lt. Gov. Austin Davis, chair of the Pennsylvania Advisory Council for Inclusive Procurement (PACIP). "The Shapiro-Davis Administration is making small businesses a priority, and our work is showing results, with nearly $1.5 billion spent with small, small diverse and veteran-owned businesses last year. With the support of our PACIP members and the team at BISD, we're going to keep investing in small businesses across the Commonwealth."
The executive order established the Pennsylvania Advisory Council for Inclusive Procurement (PACIP) to advise Commonwealth agencies on making contracting more accessible. It also directed DGS and partner agencies to increase participation in the Small Business Reserve Program, strengthen outreach and technical assistance, and regularly report on agency spending to track progress. These measures made expanding small business opportunities a coordinated responsibility across Commonwealth government.
The Administration further backed that commitment with practical changes to how businesses qualify, compete, and get paid.
DGS raised the annual revenue limit for small business eligibility from $38.5 million to $47 million, reduced certification turnaround times by 33 percent, and implemented a prompt-payment policy requiring prime contractors on qualifying non-construction contracts to pay their small diverse and veteran-owned business subcontractors within 10 days of receiving payment from the Commonwealth.
“This work is about people,” said Acting DGS Secretary Sandra Aguilera. “It's about giving small businesses a fair chance to compete and succeed. When we make our procurement process more accessible and transparent, more businesses can grow, hire, and invest in their communities.”
Throughout FY25-26, the Shapiro-Davis Administration’s targeted efforts led to record-breaking support for small businesses which includes:
Spending with veteran-owned businesses reached $198.7 million, an increase of more than 136 percent over the previous fiscal year.
Combined spending with African American-owned and Latino-owned businesses increased 21.5 percent from FY 2022–23 to FY 2025–26.
The Small Business Reserve Program generated $76.7 million in procurement activity across 365 participating small businesses. Participation increased 15.5 percent over the previous fiscal year. The program reserves certain contracts exclusively for self-certified small businesses.
BISD engaged more than 3,000 entrepreneurs and business advocates through 45 outreach events across the Commonwealth.
The Administration has also continued building the hands-on support businesses need to compete successfully. As a result of the Governor’s executive order, the Mentor-Protégé Program launched in May 2024 to pair experienced prime contractors with small, small diverse, and veteran-owned businesses for mentoring, business development, and guidance on navigating Commonwealth procurement. The first cohort completed the program in 2025, and BISD celebrated its second graduating cohort last month, continuing the work begun with the Governor’s 2023 reforms.
“Collaboration and clear accountability help create better opportunities for businesses across Pennsylvania,” said Dr. Erica Patterson, DGS Deputy Secretary for BISD. “We're using data to improve our programs, strengthen agency performance, and expand access to Commonwealth contracting. More importantly, we’re getting results.”
The FY 2025–26 Annual Report is available online in English and, for the first time, Spanish. The Spanish-language edition makes information about Commonwealth contracting opportunities and business inclusion programs more accessible to Pennsylvania’s Spanish-speaking entrepreneurs, helping more businesses understand how to compete and take advantage of available resources.
The FY 2025–26 Annual Report is available online here.
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