HB863: HB863 Georgia Small Business Set-Aside Act; enact

Currently Georgia does not have a formal set-aside program requiring state agencies to reserve a set share of purchasing contracts for small businesses. This bill, titled the Georgia Small Business Set-Aside Act, would create one. It directs the Department of Administrative Services to establish a program under which every state agency makes reasonable efforts to set aside at least 20 percent of its annual procurement contracts exclusively for small businesses. The bill defines a small business as one that is independently owned and operated with fewer than 50 employees or less than $10 million in yearly gross receipts. Businesses would need to be certified by the department to qualify, and the department would maintain a public directory of certified small businesses and a procurement website listing set-aside opportunities. Agencies that fall short of the 20 percent target must submit a corrective action plan, and the department must report annually to the Governor and General Assembly on contracts awarded under the program.

• Creates a small business set-aside program run by the Department of Administrative Services, aiming for 20 percent of each state agency's annual procurement contracts to go to small businesses.
• Defines a small business as independently owned and operated with fewer than 50 employees or under $10 million in yearly gross receipts.
• Requires the department to certify small businesses, set certification criteria, and maintain a public directory of certified firms.
• Requires state agencies to submit annual reports on contract value awarded to small businesses, with a corrective action plan required if the 20 percent goal is missed.
• Directs the department to publish set-aside opportunities on its procurement website and to write rules, training, and resources to help small businesses navigate state contracting.

Georgia small businesses seeking state contracts, the Department of Administrative Services, and every state agency, department, commission, or board that buys goods, services, or construction through public procurement.

If enacted, small Georgia-owned businesses would have a clearer path and a stated target for winning a share of state contracts, while state agencies would face new certification, reporting, and corrective-action steps whenever they fall short of the 20 percent goal.

• Section 1 names the law the 'Georgia Small Business Set-Aside Act.'
• Section 2 revises O.C.G.A. § 50-5-120 to define key terms including 'small business,' 'set-aside program,' and 'state agency.'
• Subsection (b) requires the department to establish the set-aside program and each state agency to make reasonable efforts to reserve at least 20 percent of annual procurement contracts for small businesses.
• Subsection (c) requires department certification of small businesses based on size, revenue, and operational capacity, plus a maintained directory of certified businesses.
• Subsection (d) requires annual agency reporting to the department, an annual department report to the Governor and General Assembly, and corrective action plans for agencies missing the 20 percent target.
• Subsection (e) directs the department to create implementing rules and regulations and to offer training and resources to small businesses on state procurement.
• Section 3 repeals conflicting laws.

1. 2026-02-26House Committee Favorably Reported By Substitute (House)
2. 2025-03-28House Second Readers (House)
3. 2025-03-27House First Readers (House)
4. 2025-03-25House Hopper (House)

• Teddy Reese (D, HD-140)Primary sponsor
• Karen Mathiak (R, HD-082)
• Michael Smith (D, HD-041)
• Jason Ridley (R, HD-006)
• Bryce Berry (D, HD-056)

• small business
• state procurement
• government contracting
• economic development