An Act to amend and reenact §§ 2.2-1604, 2.2-1605, 2.2-1610, 2.2-4310, 2.2-4310.3, and 23.1-1017 of the Code of Virginia and to amend the Code of Virginia by adding in Chapter 16.1 of Title 2.2 an article numbered 4, consisting of sections numbered 2.2-1618 through 2.2-1622, relating to the Department of Small Business and Supplier Diversity; Small SWaM Business Procurement Enhancement Program established; report.
HB61 establishes a new Small SWaM Business Procurement Enhancement Program within the Department of Small Business and Supplier Diversity and expands the Department’s role in helping small, women-owned, minority-owned, service-disabled veteran-owned, and military family-owned businesses participate in state contracting. The bill adds a new article to the Code of Virginia requiring executive branch agencies and covered institutions to submit procurement plans, designate internal liaisons, and work toward annual increases in small SWaM business utilization. It also directs the Department to provide feedback, guidance, mentorship support, and annual reporting on the program’s implementation and effectiveness.
The bill also revises existing procurement and reporting provisions to strengthen data collection, oversight, and accountability. It requires more detailed annual reporting on SWaM procurement, expands the use of disparity studies, and creates a public dashboard of procurement data from the state’s eVA system. In addition, it clarifies that procurement records may be reviewed to verify compliance and that poor faith failure to meet subcontracting plans can affect future contract awards. The bill makes related changes to procurement rules for covered higher education institutions and updates definitions tied to certification and business classifications.
HB61 would significantly affect state procurement law by imposing new planning, reporting, and performance expectations on executive branch agencies and covered institutions, while also expanding the Department of Small Business and Supplier Diversity’s oversight and technical-assistance responsibilities. It creates a formal procurement enhancement program, requires annual plan submissions and certifications, and ties agency performance to measurable SWaM utilization goals. The bill also amends procurement-related statutes governing discrimination, reporting, data transparency, and covered institutions’ purchasing policies, thereby broadening the statutory framework for supplier diversity in state contracting.
The bill appears to have been generally supportive of small-business and supplier-diversity goals, with the overall thrust focused on increasing access to state procurement opportunities for SWaM firms and improving accountability in agency purchasing. The absence of recorded committee transcripts or vote details limits insight into debate, but the bill’s reenrolled and approved status suggests it advanced through the legislative process before ultimately being vetoed by the Governor. That veto indicates the measure was not fully accepted at the executive level, even though the legislative text reflects a strong policy preference for expanding procurement participation and oversight.
The most likely points of contention are the bill’s mandatory utilization targets, reporting burdens, and the potential consequences for agencies and contractors that do not meet subcontracting expectations. The requirement that agencies unable to increase utilization by three percent annually explain their noncompliance, along with the possibility of barring prime contractors from future awards for bad-faith failure to comply with SWaM subcontracting plans, could be viewed as especially burdensome. Another possible area of dispute is the expanded role of the Department and the use of disparity studies and remedial procurement measures, which may raise concerns about administrative complexity, procurement flexibility, and the scope of state intervention in contracting decisions.