Small-business contracting change passes. Council now has to write the rules
The charter amendment raises the set-aside ceiling from $100,000 to $500,000 and lets Council set bid preferences by ordinance. Who counts as 'small' and 'local' is still to be defined.
Voters approved the charter change that lets Philadelphia steer more city contracts to small and local businesses. Question 1 passed with 345,410 yes votes to 92,954 no, or 78.8%, according to unofficial results posted by the Philadelphia City Commissioners, last updated at 10:25 a.m. Wednesday, Nov. 4, with 1,694 of 1,703 divisions reporting (results).
The city and its quasi-public partners spend more than $1 billion a year on goods, services and construction, according to the charter resolution itself. The amendment doesn't award any contract by itself. It gives Council and the Procurement Department new powers that they now have to use, and the rules that put those powers to work are still to be written.
What the charter now allows
We read the amendment's text in Resolution 260467 (PDF). It makes three main changes to Section 8-200 of the charter:
- Bigger set-asides. The Procurement Department can already run a separate process for contracts with small and local businesses, but only below $100,000 and not for building work. The amendment raises the ceiling to $500,000 and drops the exclusion for building construction. The ceiling, like the $75,000 competitive-bid threshold, adjusts each fiscal year with the Philadelphia consumer price index, rounded to the nearest $1,000.
- Bid preferences. Most contracts still go to the "lowest responsible bidder." The amendment adds that Council "may, by ordinance, prescribe bid preferences" for small businesses, local businesses and businesses that are both.
- Bonding flexibility. On public works contracts, the Procurement Department, with the City Solicitor's agreement, could leave bond costs out of a bid, reduce the bonding normally required or accept other forms of security, to the extent state law allows. Bonding costs can be a hurdle for smaller contractors.
"Small" and "local" are left for Council to define by ordinance, the text says.
Why the city asked
The city's earlier approach set participation goals for businesses owned by people of color, women or people with disabilities. After the legal group America First Legal sued in October 2025, the city settled and agreed to change its rules, PhillyVoice and the Committee of Seventy reported. Mayor Cherelle L. Parker then issued an executive order, last November, shifting to a size-and-location approach. The ballot question writes that approach into the charter, the Citizen reported.
The administration has said only about 20% of registered minority- and women-owned businesses were winning contracts under the old system, according to the Citizen. The charter's existing language allowing participation goals stays in place, but the administration says it is phasing that practice out, the Inquirer reported.
What our records add
- Sponsors: Majority Leader Katherine Gilmore Richardson introduced the resolution and the ballot bill, Bill 260457, on behalf of Council President Kenyatta Johnson.
- Speed: The resolution was introduced May 7. On May 28, Council suspended its rules to give the ballot bill its first reading that day. It passed the bill 16-0 and adopted the resolution on June 4. The mayor signed the bill June 23. That is four weeks from introduction to adoption.
- Where it ran strongest and weakest: By our division-by-division count, support topped out in the 9th District, represented by Anthony Phillips, at 87.9%, and was lowest in the 10th District, represented by Brian J. O'Neill, at 65.4%. It won every district and every ward. (Full district table.)
What's next
- Ordinances: Council now has to pass the laws that define small and local businesses and set any bid preferences, the Citizen reported. The Inquirer reported that the city will soon offer the new advantages. Neither outlet reported a timeline.
- Regulations: The set-aside process runs through procedures the Procurement Department establishes, under the amendment's text.
- Certification: The official count starts Friday, Nov. 6 (notice).
- Council: The next stated meeting is Nov. 12. We'll report any implementing bill when it is introduced.