Maryland 2024 Regular Session

Maryland House Bill HB856 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	hb0856
6	6
7	7	HOUSE BILL 856
8	8	P2 4lr1584
9	9
10	10	By: Delegate Alston
11	11	Introduced and read first time: February 2, 2024
12	12	Assigned to: Health and Government Operations and Economic Matters
13	13
14	14	A BILL ENTITLED
15	15
16	16	AN ACT concerning 1
17	17
18	18	Procurement – Minority Business Enterprise Program – Work Performed by a 2
19	19	Regulated Lobbyist or Government Relations Firm 3
20	20
21	21	FOR the purpose of authorizing the costs for certain work performed on a procurement 4
22	22	contract by a regulated lobbyist or government relations firm that is a certified 5
23	23	minority business enterprise to be applied toward certain minority business 6
24	24	enterprise goals under certain circumstances; and generally relating to procurement 7
25	25	preferences. 8
26	26
27	27	BY repealing and reenacting, with amendments, 9
28	28	Article – State Finance and Procurement 10
29	29	Section 14–302 11
30	30	Annotated Code of Maryland 12
31	31	(2021 Replacement Volume and 2023 Supplement) 13
32	32
33	33	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 14
34	34	That the Laws of Maryland read as follows: 15
35	35
36	36	Article – State Finance and Procurement 16
37	37
38	38	14–302. 17
39	39
40	40	(a) (1) (i) 1. Except for leases of real property, each unit shall structure 18
41	41	procurement procedures, consistent with the purposes of this subtitle, to try to achieve an 19
42	42	overall percentage goal of the unit’s total dollar value of procurement contracts being made 20
43	43	directly or indirectly to certified minority business enterprises. 21
44	44
45	45	2. Notwithstanding subsubparagraph 1 of this 22
46	46	subparagraph, the following contracts may not be counted as part of a unit’s total dollar 23
47	47	value of procurement contracts: 24
48	48	2 HOUSE BILL 856
49	49
50	50
51	51	A. a procurement contract awarded in accordance with 1
52	52	Subtitle 1 of this title; 2
53	53
54	54	B. a procurement contract awarded to a nonprofit entity in 3
55	55	accordance with requirements mandated by State or federal law; and 4
56	56
57	57	C. a procurement by the Maryland Developmental 5
58	58	Disabilities Administration of the Maryland Department of Health for family and 6
59	59	individual support services, community residential services, resource coordination services, 7
60	60	behavioral support services, vocational and day services, and respite services, as those 8
61	61	terms are defined in regulations adopted by the Maryland Department of Health. 9
62	62
63	63	(ii) 1. The overall percentage goal shall be established on a 10
64	64	biennial basis by the Special Secretary for the Office of Small, Minority, and Women 11
65	65	Business Affairs, in consultation with the Secretary of Transportation and the Attorney 12
66	66	General. 13
67	67
68	68	2. During any year in which there is a delay in establishing 14
69	69	the overall goal, the previous year’s goal will apply. 15
70	70
71	71	(iii) 1. In consultation with the Secretary of Transportation and 16
72	72	the Attorney General, the Special Secretary for the Office of Small, Minority, and Women 17
73	73	Business Affairs shall establish guidelines on a biennial basis for each unit to consider 18
74	74	while determining whether to set subgoals for the minority groups listed in § 19
75	75	14–301(k)(1)(i)1, 2, 3, 4, and 6 of this subtitle. 20
76	76
77	77	2. During any year in which there is a delay in establishing 21
78	78	the subgoal guidelines, the previous year’s subgoal guidelines will apply. 22
79	79
80	80	(iv) 1. The Special Secretary for the Office of Small, Minority, 23
81	81	and Women Business Affairs, in consultation with the Secretary of Transportation and the 24
82	82	Attorney General, shall establish goals and subgoal guidelines that, to the maximum extent 25
83	83	feasible, approximate the level of minority business enterprise participation that would be 26
84	84	expected in the absence of discrimination. 27
85	85
86	86	2. In establishing overall goals and subgoal guidelines, the 28
87	87	Special Secretary for the Office of Small, Minority, and Women Business Affairs shall 29
88	88	provide for public participation by consulting with minority, women’s, and general 30
89	89	contractor groups, community organizations, and other officials or organizations that could 31
90	90	be expected to have information concerning: 32
91	91
92	92	A. the availability of minority– and women–owned 33
93	93	businesses; 34
94	94
95	95	B. the effects of discrimination on opportunities for 35
96	96	minority– and women–owned businesses; and 36
97	97	HOUSE BILL 856 3
98	98
99	99
100	100	C. the State’s operation of the Minority Business Enterprise 1
101	101	Program. 2
102	102
103	103	(v) In establishing overall goals, the factors to be considered shall 3
104	104	include: 4
105	105
106	106	1. the relative availability of minority– and women–owned 5
107	107	businesses to participate in State procurement as demonstrated by the State’s most recent 6
108	108	disparity study; 7
109	109
110	110	2. past participation of minority business enterprises in 8
111	111	State procurement, except for procurement related to leases of real property; and 9
112	112
113	113	3. other factors that contribute to constitutional goal setting. 10
114	114
115	115	(vi) Notwithstanding § 12–101 of this article, the Special Secretary 11
116	116	for the Office of Small, Minority, and Women Business Affairs shall adopt regulations in 12
117	117	accordance with Title 10, Subtitle 1 of the State Government Article setting forth the 13
118	118	State’s overall goal. 14
119	119
120	120	(2) The Special Secretary for the Office of Small, Minority, and Women 15
121	121	Business Affairs, in consultation with the Secretary of Transportation and the Attorney 16
122	122	General, shall establish guidelines for each unit to consider when determining the 17
123	123	appropriate minority business enterprise participation percentage goal for a procurement 18
124	124	contract in accordance with paragraph (3) of this subsection. 19
125	125
126	126	(3) Each unit shall: 20
127	127
128	128	(i) consider the practical severability of all contracts and, in 21
129	129	accordance with § 11–201 of this article, may not bundle contracts; 22
130	130
131	131	(ii) implement a program that will enable the unit to evaluate each 23
132	132	contract to determine the appropriate minority business enterprise participation goals, if 24
133	133	any, for the contract based on: 25
134	134
135	135	1. the potential subcontract opportunities available in the 26
136	136	prime procurement contract; 27
137	137
138	138	2. the availability of certified minority business enterprises 28
139	139	to respond competitively to the potential subcontract opportunities; 29
140	140
141	141	3. the contract goal guidelines established under paragraph 30
142	142	(2) of this subsection; 31
143	143
144	144	4. the subgoal guidelines established under paragraph (1)(iii) 32
145	145	of this subsection; and 33
146	146	4 HOUSE BILL 856
147	147
148	148
149	149	5. other factors that contribute to constitutional goal setting; 1
150	150
151	151	(iii) monitor and collect data with respect to prime contractor 2
152	152	compliance with contract goals; and 3
153	153
154	154	(iv) institute corrective action when prime contractors do not make 4
155	155	good–faith efforts to comply with contract goals. 5
156	156
157	157	(4) Units may not use quotas or any project goal–setting process that: 6
158	158
159	159	(i) solely relies on the State’s overall numerical goal, or any other 7
160	160	jurisdiction’s overall numerical goal; or 8
161	161
162	162	(ii) fails to incorporate the analysis outlined in paragraph (3)(ii) of 9
163	163	this subsection. 10
164	164
165	165	(5) (i) A woman who is also a member of an ethnic or racial minority 11
166	166	group may be certified in that category in addition to the gender category. 12
167	167
168	168	(ii) For purposes of achieving the goals in this subsection, a certified 13
169	169	minority business enterprise may participate in a procurement contract and be counted as 14
170	170	a woman–owned business, a business owned by a member of an ethnic or racial group, or 15
171	171	both, if the business has been certified in both categories. 16
172	172
173	173	(6) Each unit shall meet the maximum feasible portion of the State’s 17
174	174	overall goal established in accordance with this subsection by using race–neutral measures 18
175	175	to facilitate minority business enterprise participation in the procurement process. 19
176	176
177	177	(7) If a unit establishes minority business enterprise participation goals for 20
178	178	a contract, a contractor, including a contractor that is a certified minority business 21
179	179	enterprise, shall: 22
180	180
181	181	(i) identify specific work categories appropriate for subcontracting; 23
182	182
183	183	(ii) at least 10 days before bid opening, solicit minority business 24
184	184	enterprises, through written notice that: 25
185	185
186	186	1. describes the categories of work under item (i) of this 26
187	187	paragraph; and 27
188	188
189	189	2. provides information regarding the type of work being 28
190	190	solicited and specific instructions on how to submit a bid; 29
191	191
192	192	(iii) attempt to make personal contact with the firms in item (ii) of 30
193	193	this paragraph; 31
194	194	HOUSE BILL 856 5
195	195
196	196
197	197	(iv) offer to provide reasonable assistance to minority business 1
198	198	enterprises to fulfill bonding requirements or to obtain a waiver of those requirements; 2
199	199
200	200	(v) in order to publicize contracting opportunities to minority 3
201	201	business enterprises, attend prebid or preproposal meetings or other meetings scheduled 4
202	202	by the unit; and 5
203	203
204	204	(vi) upon acceptance of a bid or proposal, provide the unit with a list 6
205	205	of minority businesses with whom the contractor negotiated, including price quotes from 7
206	206	minority and nonminority firms. 8
207	207
208	208	(8) The Special Secretary for the Office of Small, Minority, and Women 9
209	209	Business Affairs shall: 10
210	210
211	211	(i) in consultation with the Secretary of Transportation and the 11
212	212	Attorney General, establish procedures governing how the participation of minority 12
213	213	business enterprise prime contractors is counted toward contract goals; and 13
214	214
215	215	(ii) notwithstanding § 12–101 of this article, adopt regulations 14
216	216	setting forth the procedures established in accordance with this paragraph. 15
217	217
218	218	(9) (i) 1. If a contractor, including a certified minority business 16
219	219	enterprise, does not achieve all or a part of the minority business enterprise participation 17
220	220	goals on a contract, the unit shall make a finding of whether the contractor has 18
221	221	demonstrated that the contractor took all necessary and reasonable steps to achieve the 19
222	222	goals, including compliance with paragraph (7) of this subsection. 20
223	223
224	224	2. A waiver of any part of the minority business enterprise 21
225	225	goals for a contract shall be granted if a contractor provides a reasonable demonstration of 22
226	226	good–faith efforts to achieve the goals. 23
227	227
228	228	(ii) If the unit determines that a waiver should be granted in 24
229	229	accordance with subparagraph (i) of this paragraph, the unit may not require the contractor 25
230	230	to renegotiate any subcontract in order to achieve a different result. 26
231	231
232	232	(iii) The head of the unit may waive any of the requirements of this 27
233	233	subsection relating to the establishment, use, and waiver of contract goals for a sole source, 28
234	234	expedited, or emergency procurement in which the public interest cannot reasonably 29
235	235	accommodate use of those requirements. 30
236	236
237	237	(iv) 1. Except for waivers granted in accordance with 31
238	238	subparagraph (iii) of this paragraph, when a waiver determination is made, the unit shall 32
239	239	issue the determination in writing. 33
240	240
241	241	2. The head of the unit shall: 34
242	242	6 HOUSE BILL 856
243	243
244	244
245	245	A. keep one copy of the waiver determination and the reasons 1
246	246	for the determination; and 2
247	247
248	248	B. forward one copy of the waiver determination to the 3
249	249	Governor’s Office of Small, Minority, and Women Business Affairs. 4
250	250
251	251	(v) On or before July 31 of each year, each unit shall submit directly 5
252	252	to the Board of Public Works and the Governor’s Office of Small, Minority, and Women 6
253	253	Business Affairs an annual report of waivers requested and waivers granted under this 7
254	254	paragraph. 8
255	255
256	256	(vi) The report required under subparagraph (v) of this paragraph 9
257	257	shall contain the following information on those contracts where the unit considered a 10
258	258	contractor’s request for waiver of all or a portion of the minority business enterprise goals: 11
259	259
260	260	1. the contract titles, numbers, and dates; 12
261	261
262	262	2. the number of waiver requests received; 13
263	263
264	264	3. the number of waiver requests granted; and 14
265	265
266	266	4. any other information specifically requested by the Board. 15
267	267
268	268	(10) (i) 1. This paragraph applies to a bidder or offeror after 16
269	269	submission of a bid or proposal and before the execution of a contract with an expected 17
270	270	degree of minority business enterprise participation. 18
271	271
272	272	2. If the bidder or offeror determines that a minority 19
273	273	business enterprise identified in the minority business enterprise participation schedule 20
274	274	has become or will become unavailable or ineligible to perform the work required under the 21
275	275	contract, the bidder or offeror shall notify the unit within 72 hours of making the 22
276	276	determination. 23
277	277
278	278	(ii) 1. If a minority business enterprise identified in the minority 24
279	279	business enterprise participation schedule submitted with a bid or offer has become or will 25
280	280	become unavailable or ineligible to perform the work required under the contract, the 26
281	281	bidder or offeror may submit a written request with the unit to amend the minority 27
282	282	business enterprise participation schedule. 28
283	283
284	284	2. The request to amend the minority business enterprise 29
285	285	participation schedule shall indicate the bidder’s or offeror’s efforts to substitute another 30
286	286	certified minority business enterprise to perform the work that the unavailable or ineligible 31
287	287	minority business enterprise would have performed. 32
288	288
289	289	(iii) A minority business enterprise participation schedule may not 33
290	290	be amended unless: 34
291	291	HOUSE BILL 856 7
292	292
293	293
294	294	1. the bidder or offeror provides a satisfactory explanation of 1
295	295	the reason for inclusion of the unavailable or ineligible firm on the minority business 2
296	296	enterprise participation schedule; and 3
297	297
298	298	2. the amendment is approved by the unit’s procurement 4
299	299	officer after consulting with the unit’s minority business enterprise liaison. 5
300	300
301	301	(11) (i) This paragraph applies after execution of a contract with an 6
302	302	expected degree of minority business enterprise participation. 7
303	303
304	304	(ii) The minority business enterprise participation schedule, 8
305	305	including any amendment, shall be attached to and made a part of the executed contract. 9
306	306
307	307	(iii) 1. A. Except as provided in subsubsubparagraph B of this 10
308	308	subsubparagraph, for purposes of this subparagraph, good cause for removal of a certified 11
309	309	minority business enterprise after contract execution includes documented 12
310	310	nonperformance by the minority business enterprise or election by the certified minority 13
311	311	business enterprise to cease work on the contract. 14
312	312
313	313	B. Failure of a certified minority business enterprise to 15
314	314	provide a bond requested by a contractor in violation of § 13–227 of this article may not be 16
315	315	considered nonperformance by the minority business enterprise. 17
316	316
317	317	2. A contractor may not terminate or otherwise cancel the 18
318	318	contract of a certified minority business enterprise subcontractor listed in the minority 19
319	319	business enterprise participation schedule without showing good cause and obtaining the 20
320	320	prior written consent of the minority business enterprise liaison and approval of the head 21
321	321	of the unit. 22
322	322
323	323	3. The unit shall send a copy of the written consent obtained 23
324	324	under subsubparagraph 2 of this subparagraph to the Governor’s Office of Small, Minority, 24
325	325	and Women Business Affairs. 25
326	326
327	327	(iv) A minority business enterprise participation schedule may not 26
328	328	be amended after the date of contract execution unless the request is approved by the head 27
329	329	of the unit and the contract is amended. 28
330	330
331	331	(12) If, during the performance of a contract, a certified minority business 29
332	332	enterprise contractor or subcontractor becomes ineligible to participate in the Minority 30
333	333	Business Enterprise Program because one or more of its owners has a personal net worth 31
334	334	that exceeds the amount specified in § 14–301(k)(3) of this subtitle: 32
335	335
336	336	(i) that ineligibility alone may not cause the termination of the 33
337	337	certified minority business enterprise’s contractual relationship for the remainder of the 34
338	338	term of the contract; and 35
339	339	8 HOUSE BILL 856
340	340
341	341
342	342	(ii) the certified minority business enterprise’s participation under 1
343	343	the contract shall continue to be counted toward the program and contract goals. 2
344	344
345	345	(13) (i) Except as provided in subparagraph (ii) of this paragraph, a 3
346	346	nonprofit entity participating as a minority business enterprise on a procurement contract 4
347	347	awarded by a unit before July 1, 2015, may continue to participate in the contract until the 5
348	348	contract expires or otherwise terminates, including all options, renewals, and other 6
349	349	extensions. 7
350	350
351	351	(ii) 1. The nonprofit entity’s participation may not be counted 8
352	352	toward achieving the minority business enterprise participation goals in this subsection. 9
353	353
354	354	2. The unit may not require that a certified minority 10
355	355	business enterprise be substituted for the nonprofit entity in order to meet the minority 11
356	356	business enterprise goals for the procurement contract. 12
357	357
358	358	(14) (i) For purposes of this paragraph and paragraph (15) of this 13
359	359	subsection, “regular dealer”: 14
360	360
361	361	1. means a firm that owns, operates, or maintains a store, a 15
362	362	warehouse, or any other establishment in which the materials, supplies, articles, or 16
363	363	equipment are of the general character described by the specifications required under the 17
364	364	contract and are bought, kept in stock, or regularly sold or leased to the public in the usual 18
365	365	course of business; and 19
366	366
367	367	2. does not include a packager, a broker, a manufacturer’s 20
368	368	representative, or any other person that arranges or expedites transactions. 21
369	369
370	370	(ii) A unit may apply only 60% of the costs of the materials and 22
371	371	supplies provided by the certified minority business enterprise if the certified minority 23
372	372	business enterprise is a regular dealer for purposes of achieving the minority business 24
373	373	enterprise contract goal. 25
374	374
375	375	(15) With respect to materials or supplies purchased from a certified 26
376	376	minority business enterprise that is neither a manufacturer nor a regular dealer: 27
377	377
378	378	(i) a unit may apply the entire amount of fees or commissions 28
379	379	charged for assistance in the procurement of the materials and supplies, fees, or 29
380	380	transportation charges for the delivery of materials and supplies required on a procurement 30
381	381	toward minority business enterprise contract goals, provided a unit determines the fees to 31
382	382	be reasonable and not excessive as compared with fees customarily allowed for similar 32
383	383	services; and 33
384	384
385	385	(ii) a unit may not apply any portion of the costs of the materials and 34
386	386	supplies toward minority business enterprise goals. 35
387	387	HOUSE BILL 856 9
388	388
389	389
390	390	(16) (I) IN THIS PARAGRAPH , “REGULATED LOBBYIST ” HAS THE 1
391	391	MEANING STATED IN § 5–101 OF THE GENERAL PROVISIONS ARTICLE. 2
392	392
393	393	(II) IF A CONTRACTOR OR SU BCONTRACTOR HAS CONT RACTED 3
394	394	WITH A REGULATED LOB BYIST OR GOVERNMENT RELATI ONS FIRM IN CONNECTION 4
395	395	WITH A PROCUREMENT CONTRACT AND THE REG ULATED LOBBYIST OR 5
396	396	GOVERNMENT RELATIONS FIRM IS A CERTIFIED MINORITY BUSINESS EN TERPRISE, 6
397	397	THE CONTRACTOR OR SU BCONTRACTOR MAY APPLY THE COSTS FOR THE WORK 7
398	398	PERFORMED BY THE REG ULATED LOBBYIST OR G OVERNMENT RELATIONS FIRM 8
399	399	UNDER THE CONTRACT TOWARD MINORITY BUSI NESS ENTERPRISE GOAL S. 9
400	400
401	401	(b) (1) The provisions of §§ 14–301(f) and 14–303 of this subtitle and 10
402	402	subsection (a) of this section are inapplicable to the extent that any unit determines the 11
403	403	provisions to be in conflict with any applicable federal program requirement. 12
404	404
405	405	(2) The determination under this subsection shall be included with the 13
406	406	report required under § 14–305 of this subtitle. 14
407	407
408	408	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 15
409	409	October 1, 2024. 16