HB 863: Georgia Small Business Set-Aside Act; enact

Currently, Code Section 50-5-120 in Georgia law is reserved, meaning it holds no active text. This bill fills it in to create the Georgia Small Business Set-Aside Act. It directs the Department of Administrative Services to set up a set-aside program under which every state agency that buys goods, services, or construction must make reasonable efforts to reserve at least 20 percent of its yearly procurement contracts exclusively for small businesses. A small business is defined as one that is independently owned and operated with either fewer than 50 employees or less than $10 million in yearly gross receipts. Businesses must apply and be certified by the department, which will keep a directory of certified small businesses and publish set-aside opportunities online. Agencies must report yearly on how much contract value went to small businesses, and agencies that fall short of the 20 percent target must submit a corrective action plan. The department can also write implementing rules and offer training to help small businesses compete for state contracts.

• Creates a small business set-aside program requiring state agencies to try to reserve at least 20 percent of annual procurement contracts for small businesses.
• Defines a qualifying small business as independently owned and operated with fewer than 50 employees or under $10 million in yearly gross receipts.
• Requires businesses to be certified by the Department of Administrative Services and adds them to an official small business directory.
• Requires each state agency to file an annual report on contract value awarded to small businesses, compiled by the department for the Governor and General Assembly.
• Requires agencies that miss the 20 percent target to submit a corrective action plan to the department.
• Authorizes the department to write implementing rules and provide training and resources to help small businesses navigate state procurement.

Georgia state agencies, departments, commissions, and boards that purchase goods, services, or construction; small businesses seeking state contracts; and the Department of Administrative Services, which would run certification, the directory, and reporting for the new program.

If enacted, small businesses could gain easier access to a defined share of state contracting dollars, while state agencies would face a new procurement target, a certification and reporting process, and a corrective action requirement if they fall short of the 20 percent goal.

• Section 1 titles the bill the 'Georgia Small Business Set-Aside Act.'
• Section 2 rewrites the previously reserved Code Section 50-5-120 to define 'department,' 'set-aside program,' 'small business,' and 'state agency.'
• Subsection (b) requires the department to establish the set-aside program and directs agencies to make reasonable efforts to reserve 20 percent of annual procurement contracts for small businesses.
• Subsection (c) requires department certification for a business to qualify, based on size, revenue, and operational capacity, and creates a small business directory.
• Subsection (d) requires annual agency reporting on contract value to small businesses and requires a corrective action plan from agencies that miss the 20 percent target.
• Subsection (e) authorizes the department to adopt rules and regulations and to provide training and resources to small businesses.
• 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 contracting
• government procurement
• economic development