Politics & Government

McAuliffe Executive Order a Major Win for Small Businesses

Gov. Terry McAuliffe signed an executive order Tuesday, July 22 that mandates state agencies must award 42 percent of contracts to small, women, and minority-owned businesses.

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Gov. Terry McAuliffe is expected to sign an executive order Tuesday that requires state agencies to award more than 42 percent of contracts to small businesses to “spur creativity, promote economic justice and development, and encourage procurement participation by small businesses.”

Entitled “Advancing Equity for Small, Women, and Minority Owned (SWaM) Businesses,” the executive order establishes five initiatives:

  1. State agencies must award 42 percent of contracts to certified “SWaM” businesses, the highest percentage of state contracts since the state began tracking the data in 2004

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  • A new micro business designation will be established for certified businesses with no more than 25 employees and $3 million in average annual revenue. The Department of Small Business and Supplier Diversity (DSBSD) will submit recommendations for implementing the designation by Oct. 1.

  • The order established new limits for set-asides (portions of government contracts that are awarded without competition to small businesses) of up to $100,000 for goods and nonprofessional services and $50,000 for professional services. Purchases under $10,000 are set aside for micro-businesses.

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  • The state government must develop a uniform method for evaluating and monitoring small business procurement plans. Large contractors that win state bids but do not include plans for involving small businesses as subcontractors may have their final payments withheld.

  • Establish a process for producing SWaM subcontracting data, including information on non-SWaM subcontractors performing on contracts greater than $200,000.

    • The executive order replaces Executive Order 33, issued by then-Gov. Timothy Kaine in 2006.

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