SWaM bill stalls on Senate floor

March 4, 2021

HB 5002 (Ward) would have established the Small Business Procurement Enhancement Program with a statewide goal of 42 percent of certified small business utilization in all discretionary spending by state agencies and covered institutions in procurement orders, prime contracts, and subcontracts, as well as a target goal of 50 percent subcontracting to certified small businesses in instances where the prime contractor is not a small business for all new capital outlay construction solicitations that are issued.

This bill was requested by the Administration and passed the House by a 51-45 vote but hit some snags in the Senate where it was heavily amended in the Senate General Laws and Technology committee. Although the bulk of the bill seems to apply only to  state entities, there was language buried in the bill that brought in local government. The bill died on the Senate floor the last day of session, but we expect similar legislation to return in future sessions.

The bill creates the Division of Procurement Enhancement within the Department of Small Business and Supplier Diversity (DSBSD) for purposes of collaborating with the Department of General Services, the Virginia Information Technologies Agency, the Department of Transportation, and covered institutions to further the Commonwealth’s efforts to meet the goals established under the Small Business Procurement Enhancement Program and the Women-owned and Minority-owned Business Procurement Enhancement Program, as well as implementing initiatives to enhance the development of small businesses, microbusinesses, women-owned businesses, and minority-owned businesses in the Commonwealth.

HB 5002 establishes the Small Business Procurement Enhancement Program with a statewide goal of 42 percent of certified small business utilization in all discretionary spending by state agencies and covered institutions in procurement orders, prime contracts, and subcontracts, as well as a target goal of 50 percent subcontracting to certified small businesses for all new capital outlay construction solicitations that are issued, in instances where the prime contractor is not a small business. In addition, the bill provides for a small business set-aside for the purchase of goods, services, and construction by state agencies and covered institutions, with purchases up to $100,000 set aside for award to certified small businesses and purchases up to $10,000 set aside for award to microbusinesses.

The bill also establishes the Women-owned and Minority-owned Business Procurement Enhancement Program with a statewide goal of 23.1 percent of certified women-owned and minority-owned business utilization in all discretionary spending by state agencies and covered institutions in procurement orders, prime contracts, and subcontracts. The bill further requires that state agencies and covered institutions require certain proposals or bids to include a small, women-owned, and minority-owned (SWaM) business subcontracting plan detailing intended subcontractor participation. Each state agency and covered institution is required to submit to DSBSD its SWaM business procurement plan on or before September 30, 2021, and to designate an existing employee as a SWaM business procurement enhancement liaison. Each state agency and covered institution is required to certify to DSBSD annually by September 30 of each subsequent year that it has reviewed and updated as necessary its SWaM business procurement plan. DSBSD is to issue a report to the Governor and the General Assembly on the implementation and effectiveness of both procurement enhancement programs.

Finally, the bill amends the Virginia Public Procurement Act to permit public bodies to establish purchase procedures, if adopted in writing, not requiring competitive sealed bids or competitive negotiation for single or term contracts for the purchase or lease of goods, or for the purchase of services, insurance, or construction, if the aggregate or the sum of all phases is not expected to exceed $200,000. Under current law, such purchase procedures may only be established for (i) goods and services other than professional services and non-transportation-related construction, if the aggregate or the sum of all phases is not expected to exceed $200,000; (ii) transportation-related construction, if the aggregate or sum of all phases is not expected to exceed $25,000; and (iii) professional services, provided the aggregate or the sum of all phases is not expected to exceed $80,000. The Women-owned and Minority owned Business Procurement Enhancement Program established by this bill expires July 1, 2028.

VACo Contact: Phyllis Errico, Esq., CAE

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