State Secretary of General Services, Curt Topper Wednesday announced the release of the 2014 annual report as required by Act 13 of 2012 on the natural gas industry's utilization of Small Diverse Businesses in natural gas extraction across Pennsylvania.

Out of 78 producers surveyed, approximately 70 percent (54 producers) did not respond to the survey – an action which is required by law.

"Act 13 requires natural gas producers to take some specific actions in regards to the utilization of small diverse businesses as potential contractors, subcontractors and suppliers," Topper said. "To see such a low rate of response to the survey is disappointing, considering our commitment to ensure that opportunities are being afforded to small diverse businesses in Pennsylvania."

A small diverse business is any DGS-verified minority, woman, veteran, and service-disabled-veteran-owned business enterprise.

Act 13 of 2012 requires three things from natural gas producers: 1) to maintain policies prohibiting discrimination in employment and contracting based on gender, race, creed or color; 2) to use the department's internet database to identify small diverse businesses as potential contractors, subcontractors and suppliers; and 3) to respond to an annual survey distributed by DGS within ninety (90) days of receipt.

Findings of the survey revealed that of the 21 producers who completed the survey, only 13 used the DGS searchable online directory to identify SDBs as required by statute and then used SDBs as contractors, subcontractors and suppliers during in 2014.

"While the findings are not necessarily what we hoped for, they do provide us with the data necessary for us to take a look at how Act 13 is being enforced and provide recommendations to the General Assembly on how we can improve compliance with the law," Topper said.

DGS recommends that Act 13 be amended to enable the department to issue sanctions for non-compliance; audit producers to ensure compliance; work with producers to layout plans for the future use of SDBs; and to consider adding goals for the use of SDBs by producers and incentives for those who meet and exceed those goals.

Response

“Our member companies are deeply committed to sourcing their supply chain needs and hiring locally when and where possible. In fact, the oil and gas industry works with more than 1,300 different businesses across the Commonwealth,” said Erica Wright, spokeswoman for the Marcellus Shale Coalition, in a statement. “We will continue to make collaborative efforts – working with a diverse set of stakeholders, including the Department of General Services – to further expand the shale supply chain in communities across Pennsylvania.”

The 2014 annual report is available online.

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