EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0856*
HOUSE BILL 856
P2 4lr1584
By: Delegate Alston
Introduced and read first time: February 2, 2024
Assigned to: Health and Government Operations and Economic Matters
A BILL ENTITLED
AN ACT concerning 1
Procurement – Minority Business Enterprise Program – Work Performed by a 2
Regulated Lobbyist or Government Relations Firm 3
FOR the purpose of authorizing the costs for certain work performed on a procurement 4
contract by a regulated lobbyist or government relations firm that is a certified 5
minority business enterprise to be applied toward certain minority business 6
enterprise goals under certain circumstances; and generally relating to procurement 7
preferences. 8
BY repealing and reenacting, with amendments, 9
Article – State Finance and Procurement 10
Section 14–302 11
Annotated Code of Maryland 12
(2021 Replacement Volume and 2023 Supplement) 13
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 14
That the Laws of Maryland read as follows: 15
Article – State Finance and Procurement 16
14–302. 17
(a) (1) (i) 1. Except for leases of real property, each unit shall structure 18
procurement procedures, consistent with the purposes of this subtitle, to try to achieve an 19
overall percentage goal of the unit’s total dollar value of procurement contracts being made 20
directly or indirectly to certified minority business enterprises. 21
2. Notwithstanding subsubparagraph 1 of this 22
subparagraph, the following contracts may not be counted as part of a unit’s total dollar 23
value of procurement contracts: 24
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A. a procurement contract awarded in accordance with 1
Subtitle 1 of this title; 2
B. a procurement contract awarded to a nonprofit entity in 3
accordance with requirements mandated by State or federal law; and 4
C. a procurement by the Maryland Developmental 5
Disabilities Administration of the Maryland Department of Health for family and 6
individual support services, community residential services, resource coordination services, 7
behavioral support services, vocational and day services, and respite services, as those 8
terms are defined in regulations adopted by the Maryland Department of Health. 9
(ii) 1. The overall percentage goal shall be established on a 10
biennial basis by the Special Secretary for the Office of Small, Minority, and Women 11
Business Affairs, in consultation with the Secretary of Transportation and the Attorney 12
General. 13
2. During any year in which there is a delay in establishing 14
the overall goal, the previous year’s goal will apply. 15
(iii) 1. In consultation with the Secretary of Transportation and 16
the Attorney General, the Special Secretary for the Office of Small, Minority, and Women 17
Business Affairs shall establish guidelines on a biennial basis for each unit to consider 18
while determining whether to set subgoals for the minority groups listed in § 19
14–301(k)(1)(i)1, 2, 3, 4, and 6 of this subtitle. 20
2. During any year in which there is a delay in establishing 21
the subgoal guidelines, the previous year’s subgoal guidelines will apply. 22
(iv) 1. The Special Secretary for the Office of Small, Minority, 23
and Women Business Affairs, in consultation with the Secretary of Transportation and the 24
Attorney General, shall establish goals and subgoal guidelines that, to the maximum extent 25
feasible, approximate the level of minority business enterprise participation that would be 26
expected in the absence of discrimination. 27
2. In establishing overall goals and subgoal guidelines, the 28
Special Secretary for the Office of Small, Minority, and Women Business Affairs shall 29
provide for public participation by consulting with minority, women’s, and general 30
contractor groups, community organizations, and other officials or organizations that could 31
be expected to have information concerning: 32
A. the availability of minority– and women–owned 33
businesses; 34
B. the effects of discrimination on opportunities for 35
minority– and women–owned businesses; and 36
HOUSE BILL 856 3
C. the State’s operation of the Minority Business Enterprise 1
Program. 2
(v) In establishing overall goals, the factors to be considered shall 3
include: 4
1. the relative availability of minority– and women–owned 5
businesses to participate in State procurement as demonstrated by the State’s most recent 6
disparity study; 7
2. past participation of minority business enterprises in 8
State procurement, except for procurement related to leases of real property; and 9
3. other factors that contribute to constitutional goal setting. 10
(vi) Notwithstanding § 12–101 of this article, the Special Secretary 11
for the Office of Small, Minority, and Women Business Affairs shall adopt regulations in 12
accordance with Title 10, Subtitle 1 of the State Government Article setting forth the 13
State’s overall goal. 14
(2) The Special Secretary for the Office of Small, Minority, and Women 15
Business Affairs, in consultation with the Secretary of Transportation and the Attorney 16
General, shall establish guidelines for each unit to consider when determining the 17
appropriate minority business enterprise participation percentage goal for a procurement 18
contract in accordance with paragraph (3) of this subsection. 19
(3) Each unit shall: 20
(i) consider the practical severability of all contracts and, in 21
accordance with § 11–201 of this article, may not bundle contracts; 22
(ii) implement a program that will enable the unit to evaluate each 23
contract to determine the appropriate minority business enterprise participation goals, if 24
any, for the contract based on: 25
1. the potential subcontract opportunities available in the 26
prime procurement contract; 27
2. the availability of certified minority business enterprises 28
to respond competitively to the potential subcontract opportunities; 29
3. the contract goal guidelines established under paragraph 30
(2) of this subsection; 31
4. the subgoal guidelines established under paragraph (1)(iii) 32
of this subsection; and 33
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5. other factors that contribute to constitutional goal setting; 1
(iii) monitor and collect data with respect to prime contractor 2
compliance with contract goals; and 3
(iv) institute corrective action when prime contractors do not make 4
good–faith efforts to comply with contract goals. 5
(4) Units may not use quotas or any project goal–setting process that: 6
(i) solely relies on the State’s overall numerical goal, or any other 7
jurisdiction’s overall numerical goal; or 8
(ii) fails to incorporate the analysis outlined in paragraph (3)(ii) of 9
this subsection. 10
(5) (i) A woman who is also a member of an ethnic or racial minority 11
group may be certified in that category in addition to the gender category. 12
(ii) For purposes of achieving the goals in this subsection, a certified 13
minority business enterprise may participate in a procurement contract and be counted as 14
a woman–owned business, a business owned by a member of an ethnic or racial group, or 15
both, if the business has been certified in both categories. 16
(6) Each unit shall meet the maximum feasible portion of the State’s 17
overall goal established in accordance with this subsection by using race–neutral measures 18
to facilitate minority business enterprise participation in the procurement process. 19
(7) If a unit establishes minority business enterprise participation goals for 20
a contract, a contractor, including a contractor that is a certified minority business 21
enterprise, shall: 22
(i) identify specific work categories appropriate for subcontracting; 23
(ii) at least 10 days before bid opening, solicit minority business 24
enterprises, through written notice that: 25
1. describes the categories of work under item (i) of this 26
paragraph; and 27
2. provides information regarding the type of work being 28
solicited and specific instructions on how to submit a bid; 29
(iii) attempt to make personal contact with the firms in item (ii) of 30
this paragraph; 31
HOUSE BILL 856 5
(iv) offer to provide reasonable assistance to minority business 1
enterprises to fulfill bonding requirements or to obtain a waiver of those requirements; 2
(v) in order to publicize contracting opportunities to minority 3
business enterprises, attend prebid or preproposal meetings or other meetings scheduled 4
by the unit; and 5
(vi) upon acceptance of a bid or proposal, provide the unit with a list 6
of minority businesses with whom the contractor negotiated, including price quotes from 7
minority and nonminority firms. 8
(8) The Special Secretary for the Office of Small, Minority, and Women 9
Business Affairs shall: 10
(i) in consultation with the Secretary of Transportation and the 11
Attorney General, establish procedures governing how the participation of minority 12
business enterprise prime contractors is counted toward contract goals; and 13
(ii) notwithstanding § 12–101 of this article, adopt regulations 14
setting forth the procedures established in accordance with this paragraph. 15
(9) (i) 1. If a contractor, including a certified minority business 16
enterprise, does not achieve all or a part of the minority business enterprise participation 17
goals on a contract, the unit shall make a finding of whether the contractor has 18
demonstrated that the contractor took all necessary and reasonable steps to achieve the 19
goals, including compliance with paragraph (7) of this subsection. 20
2. A waiver of any part of the minority business enterprise 21
goals for a contract shall be granted if a contractor provides a reasonable demonstration of 22
good–faith efforts to achieve the goals. 23
(ii) If the unit determines that a waiver should be granted in 24
accordance with subparagraph (i) of this paragraph, the unit may not require the contractor 25
to renegotiate any subcontract in order to achieve a different result. 26
(iii) The head of the unit may waive any of the requirements of this 27
subsection relating to the establishment, use, and waiver of contract goals for a sole source, 28
expedited, or emergency procurement in which the public interest cannot reasonably 29
accommodate use of those requirements. 30
(iv) 1. Except for waivers granted in accordance with 31
subparagraph (iii) of this paragraph, when a waiver determination is made, the unit shall 32
issue the determination in writing. 33
2. The head of the unit shall: 34
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A. keep one copy of the waiver determination and the reasons 1
for the determination; and 2
B. forward one copy of the waiver determination to the 3
Governor’s Office of Small, Minority, and Women Business Affairs. 4
(v) On or before July 31 of each year, each unit shall submit directly 5
to the Board of Public Works and the Governor’s Office of Small, Minority, and Women 6
Business Affairs an annual report of waivers requested and waivers granted under this 7
paragraph. 8
(vi) The report required under subparagraph (v) of this paragraph 9
shall contain the following information on those contracts where the unit considered a 10
contractor’s request for waiver of all or a portion of the minority business enterprise goals: 11
1. the contract titles, numbers, and dates; 12
2. the number of waiver requests received; 13
3. the number of waiver requests granted; and 14
4. any other information specifically requested by the Board. 15
(10) (i) 1. This paragraph applies to a bidder or offeror after 16
submission of a bid or proposal and before the execution of a contract with an expected 17
degree of minority business enterprise participation. 18
2. If the bidder or offeror determines that a minority 19
business enterprise identified in the minority business enterprise participation schedule 20
has become or will become unavailable or ineligible to perform the work required under the 21
contract, the bidder or offeror shall notify the unit within 72 hours of making the 22
determination. 23
(ii) 1. If a minority business enterprise identified in the minority 24
business enterprise participation schedule submitted with a bid or offer has become or will 25
become unavailable or ineligible to perform the work required under the contract, the 26
bidder or offeror may submit a written request with the unit to amend the minority 27
business enterprise participation schedule. 28
2. The request to amend the minority business enterprise 29
participation schedule shall indicate the bidder’s or offeror’s efforts to substitute another 30
certified minority business enterprise to perform the work that the unavailable or ineligible 31
minority business enterprise would have performed. 32
(iii) A minority business enterprise participation schedule may not 33
be amended unless: 34
HOUSE BILL 856 7
1. the bidder or offeror provides a satisfactory explanation of 1
the reason for inclusion of the unavailable or ineligible firm on the minority business 2
enterprise participation schedule; and 3
2. the amendment is approved by the unit’s procurement 4
officer after consulting with the unit’s minority business enterprise liaison. 5
(11) (i) This paragraph applies after execution of a contract with an 6
expected degree of minority business enterprise participation. 7
(ii) The minority business enterprise participation schedule, 8
including any amendment, shall be attached to and made a part of the executed contract. 9
(iii) 1. A. Except as provided in subsubsubparagraph B of this 10
subsubparagraph, for purposes of this subparagraph, good cause for removal of a certified 11
minority business enterprise after contract execution includes documented 12
nonperformance by the minority business enterprise or election by the certified minority 13
business enterprise to cease work on the contract. 14
B. Failure of a certified minority business enterprise to 15
provide a bond requested by a contractor in violation of § 13–227 of this article may not be 16
considered nonperformance by the minority business enterprise. 17
2. A contractor may not terminate or otherwise cancel the 18
contract of a certified minority business enterprise subcontractor listed in the minority 19
business enterprise participation schedule without showing good cause and obtaining the 20
prior written consent of the minority business enterprise liaison and approval of the head 21
of the unit. 22
3. The unit shall send a copy of the written consent obtained 23
under subsubparagraph 2 of this subparagraph to the Governor’s Office of Small, Minority, 24
and Women Business Affairs. 25
(iv) A minority business enterprise participation schedule may not 26
be amended after the date of contract execution unless the request is approved by the head 27
of the unit and the contract is amended. 28
(12) If, during the performance of a contract, a certified minority business 29
enterprise contractor or subcontractor becomes ineligible to participate in the Minority 30
Business Enterprise Program because one or more of its owners has a personal net worth 31
that exceeds the amount specified in § 14–301(k)(3) of this subtitle: 32
(i) that ineligibility alone may not cause the termination of the 33
certified minority business enterprise’s contractual relationship for the remainder of the 34
term of the contract; and 35
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(ii) the certified minority business enterprise’s participation under 1
the contract shall continue to be counted toward the program and contract goals. 2
(13) (i) Except as provided in subparagraph (ii) of this paragraph, a 3
nonprofit entity participating as a minority business enterprise on a procurement contract 4
awarded by a unit before July 1, 2015, may continue to participate in the contract until the 5
contract expires or otherwise terminates, including all options, renewals, and other 6
extensions. 7
(ii) 1. The nonprofit entity’s participation may not be counted 8
toward achieving the minority business enterprise participation goals in this subsection. 9
2. The unit may not require that a certified minority 10
business enterprise be substituted for the nonprofit entity in order to meet the minority 11
business enterprise goals for the procurement contract. 12
(14) (i) For purposes of this paragraph and paragraph (15) of this 13
subsection, “regular dealer”: 14
1. means a firm that owns, operates, or maintains a store, a 15
warehouse, or any other establishment in which the materials, supplies, articles, or 16
equipment are of the general character described by the specifications required under the 17
contract and are bought, kept in stock, or regularly sold or leased to the public in the usual 18
course of business; and 19
2. does not include a packager, a broker, a manufacturer’s 20
representative, or any other person that arranges or expedites transactions. 21
(ii) A unit may apply only 60% of the costs of the materials and 22
supplies provided by the certified minority business enterprise if the certified minority 23
business enterprise is a regular dealer for purposes of achieving the minority business 24
enterprise contract goal. 25
(15) With respect to materials or supplies purchased from a certified 26
minority business enterprise that is neither a manufacturer nor a regular dealer: 27
(i) a unit may apply the entire amount of fees or commissions 28
charged for assistance in the procurement of the materials and supplies, fees, or 29
transportation charges for the delivery of materials and supplies required on a procurement 30
toward minority business enterprise contract goals, provided a unit determines the fees to 31
be reasonable and not excessive as compared with fees customarily allowed for similar 32
services; and 33
(ii) a unit may not apply any portion of the costs of the materials and 34
supplies toward minority business enterprise goals. 35
HOUSE BILL 856 9
(16) (I) IN THIS PARAGRAPH , “REGULATED LOBBYIST ” HAS THE 1
MEANING STATED IN § 5–101 OF THE GENERAL PROVISIONS ARTICLE. 2
(II) IF A CONTRACTOR OR SU BCONTRACTOR HAS CONT RACTED 3
WITH A REGULATED LOB BYIST OR GOVERNMENT RELATI ONS FIRM IN CONNECTION 4
WITH A PROCUREMENT CONTRACT AND THE REG ULATED LOBBYIST OR 5
GOVERNMENT RELATIONS FIRM IS A CERTIFIED MINORITY BUSINESS EN TERPRISE, 6
THE CONTRACTOR OR SU BCONTRACTOR MAY APPLY THE COSTS FOR THE WORK 7
PERFORMED BY THE REG ULATED LOBBYIST OR G OVERNMENT RELATIONS FIRM 8
UNDER THE CONTRACT TOWARD MINORITY BUSI NESS ENTERPRISE GOAL S. 9
(b) (1) The provisions of §§ 14–301(f) and 14–303 of this subtitle and 10
subsection (a) of this section are inapplicable to the extent that any unit determines the 11
provisions to be in conflict with any applicable federal program requirement. 12
(2) The determination under this subsection shall be included with the 13
report required under § 14–305 of this subtitle. 14
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 15
October 1, 2024. 16