During the 2018 session, there were several bills proposed to address issues small businesses experience when doing business with the Commonwealth.
Two of the bills would have changed the definition of “small business” for the purposes of SWaM certification (small, women, and minority). Currently, a business that has either fewer than 250 employees or less than $10 million in annual revenue is considered a “small business.” This results in approximately 97 percent of Virginia’s businesses being designated as small business.
Many small businesses complain this creates an unfair playing field when they’re having to compete against other businesses for state procurement bids. House Bill 513 and Senate Bill 318 would have changed the definition of small business to use the federal size standards, which compare businesses within their own industry. The idea behind this proposal was Virginia would now have a more fair and equitable way of defining a small business since each would be compared to other similar businesses in its industry sector. For instance, businesses in industries with small profit margins would not be compared to those who have higher margins.
The other two bills, House Bill 1407 and Senate Bill 850, would have put into state law former Gov. Terry McAuliffe’s Executive Order 20, which set several procurement policies. The Order, which overrides state law, created a new designation for “microbusiness.” A business was deemed a microbusiness if it had fewer than 25 employees AND less than $3 million in annual revenue. The Order went further when it stated that all state purchases under $10,000 had to be filled by a microbusiness. Again, we heard from numerous members who, while small business certified, were not a microbusiness and were therefore kicked out of many opportunities to provide goods or services to the Commonwealth.
Both of these issues were carried over to next year by the General Assembly. If you have any experiences to report regarding small business procurement, please contact State Director Nicole Riley at 804-377-3661 or [email protected]. She will be working with affected NFIB members, legislators, and Gov. Northam’s administration to see if there are opportunities to bring more fairness, transparency, and effectiveness to the Commonwealth’s procurement policies.
