Good morning. Pipelines get headlines. And that has certainly been the case with the PennEast Pipeline, which would have carried natural gas from northeastern Pennsylvania to markets in New Jersey. The utilities behind the pipeline officially pulled the plug yesterday, blaming permitting delays in the Garden State. But given what's at stake, battles over pipelines are likely to continue.
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Kerry Kirkland, Pennsylvania's deputy secretary for diversity, inclusion and small business opportunities, speaks yesterday during a press conference on legislation to improve diversity in state contracting (photo/submitted).

Pandemic dampens contractor diversity 

After years of progress in gaining a bigger share of state contracts, small businesses owned by women, minorities and veterans lost some ground during the Covid-19 pandemic.
  • The Wolf administration has emphasized improving diversity in contracting under an executive order signed in 2015.
  • And it has been making inroads, with the share of spending higher now than it was six years ago for small, diverse businesses and businesses owned by veterans
  • But progress stalled in the fiscal year that ended June 30, 2020, a year that covers the first few months of the Covid-19 pandemic, according to an annual report by the Department of General Services.
  • Under state criteria, small, diverse businesses include those owned by women, minorities, people with disabilities and members of the LGBTQ community.

What happened: Due to a spending freeze in the early days of the pandemic, state agencies shelled out less on contracts in 2019-2020 than in 2018-2019, according to the report. But it was smaller contracts that were most likely to be affected, according to Troy Thompson, a spokesperson for the Department of General Services.
  • "The effect of that reduction in spending did reduce the types of opportunities our programs seek to create" for small diverse businesses and small businesses, Thompson wrote in an email.
  • Overall, the state spent nearly $3.7 billion on contracts in 2019-2020, down from $4.4 billion in 2018-2019.
  • Small businesses of all kinds still took home nearly 18% of the total, roughly the same as the year before. 
  • But the share for certified small, diverse businesses slipped from 10.44% to 9.63%, with the dollar value dipping from $460.1 million to $355.2 million.
  • For veteran-owned businesses, the share fell from 0.56% to 0.34%, while the dollar value plunged from $24.5 million to $12.7 million.

What's next: The Wolf administration and a bipartisan group of legislators are pushing a new bill designed to build on the 2015 executive order and give it more legislative teeth.
  • The bill, SB 900, would put into law the targets and procurement procedures the Wolf administration has set via policy. Its sponsors include Republican state Sen. Camera Bartolotta and Democratic state Sen. Vincent Hughes. 
  • Under the bill, for example, the state would set minimum participation targets for small, diverse businesses in areas like construction and design.
  • Other provisions include removing the 100-employee threshold for defining small business and setting caps based on industry.
  • The bill also would require a report every five years on disparities in state contracting, similar to an initial report in 2018 that laid bare many of the challenges faced by small, diverse firms.
The bottom line: Many studies have documented the pandemic's disproportionate impact on businesses owned by women and minorities. Emergency grant programs sought to alleviate the harm, as did tweaks to the Paycheck Protection program.
  • When it comes to state contracts in Pennsylvania, the resumption of normal spending patterns should reverse the recent declines for small, diverse and veteran-owned businesses, Thompson wrote.

Quick takes

WHO'S ADDING A DASHBOARD: Gov. Tom Wolf. Yesterday, he unveiled a new set of data showing vaccination rates by state Senate and House districts, as well as U.S. House districts in Pennsylvania. The rates are calculated based on total population, not on those eligible for vaccination, and they do not include people vaccinated in Philadelphia due to separate reporting requirements.
  • The second-lowest vaccination rate among House districts is in the Lancaster County district of Rep. Bryan Cutler, where 32.2% of all residents are vaccinated. The lowest state House district is at 29.3% while the highest is at 69.1%.
  • Among state Senate districts, the lowest rate is found in the district of Sen. Judy Ward, which includes parts of Cumberland and Franklin counties. The rate there is 36%. 
  • The highest rate among Senate districts is 65.9%.

What about booster shotsFollowing moves by federal regulators last week, the Pennsylvania Department of Health this week laid out its take on who is eligible for a third dose of the Pfizer/BioNTech vaccine.
  • Booster shots are not approved for people who took the Moderna or Johnson & Johnson vaccines.

WHAT SOLD: Mellott Co., a Fulton County-based company in the rock-crushing and screening business. The company was purchased by MFG Partners, a New York-based private equity firm, in partnership with company management and PNC Mezzanine Capital, an arm of Pittsburgh-based PNC Financial Services Group, according to a press release. Terms of the deal were not disclosed.  

WHO'S GETTING GRANTS: Child care providers in Pennsylvania. The Wolf administration yesterday released a plan for distributing $655 million in grants to child care providers. The goal is to help providers cope with the financial pressures they have faced during the Covid-19 pandemic -- and preserve access to child care for working families.
  • Grant applications will be available through the end of January.


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Compiled and written by Joel Berg

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