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Chapter 583
(House Bill 962)
AN ACT concerning
State Procurement – Small and Minority Business Reserve Program – Goals and
Outreach Program
(Parren J. Mitchell MBE Prime Contracting Act)
FOR the purpose of altering the Small Business Reserve Program to be the Small and
Minority Business Reserve Program; requiring a unit of State government, to the
extent practicable, to structure its procurement procedures to achieve a certain
minimum percentage of the unit’s total dollar value of certain contracts to be made
directly to certified minority business enterprises; requiring a certain study to
include the Small and Minority Business Reserve Program altering a certain
participation goal for certain small businesses for certain procurement contracts;
requiring the certification agency, in consultation with the Governor’s Office of
Small, Minority, and Women Business Affairs to develop a certain outreach program;
altering the content of certain unit reports; and generally relating to the Small and
Minority Business Reserve Program.
BY repealing and reenacting, without amendments,
Article – State Finance and Procurement
Section 14–301(a), (b), and (d) (c), (d), and (e)
Annotated Code of Maryland
(2021 Replacement Volume and 2023 Supplement)
BY repealing and reenacting, with amendments,
Article – State Finance and Procurement
Section 14–501, 14–502, and 14–505
Annotated Code of Maryland
(2021 Replacement Volume and 2023 Supplement)
BY adding to
Article – State Finance and Procurement
Section 14–504.1
Annotated Code of Maryland
(2021 Replacement Volume and 2023 Supplement)
BY repealing and reenacting, with amendments,
Article – State Finance and Procurement
Section 14–501, 14–502, 14–502.1, and 14–503 through 14–505 to be under the
amended subtitle “Subtitle 5. Small and Minority Business Reserve Program”
Annotated Code of Maryland
(2021 Replacement Volume and 2023 Supplement)
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BY repealing and reenacting, with amendments,
Chapter 154 of the Acts of the General Assembly of 2012, as amended by Chapters
200 and 201 of the Acts of the General Assembly of 2013, Chapter 340 of the
Acts of the General Assembly of 2017, Chapter 117 of the Acts of the General
Assembly of 2022, and Chapters 137 and 138 of the Acts of the General
Assembly of 2023
Section 2
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – State Finance and Procurement
14–301.
(a) In this subtitle the following words have the meanings indicated.
(b) “Certification” means the determination that a legal entity is a minority
business enterprise for the purposes of this subtitle.
(c) “Certification agency” means the agency designated by the Board of Public
Works under § 14–303(b) of this subtitle to certify and decertify minority business
enterprises.
(d) “Certified minority business enterprise” means a minority business enterprise
that holds a certification.
(e) “Economically disadvantaged individual” means a socially disadvantaged
individual whose ability to compete in the free enterprise system has been impaired due to
diminished capital and credit opportunities as compared to others in the same or similar
line of business who are not socially disadvantaged.
Subtitle 5. Small AND MINORITY Business Reserve Program.
14–501.
(a) In this subtitle the following words have the meanings indicated.
(B) “CERTIFIED MINORITY BU SINESS ENTERPRISE ” HAS THE MEANING
STATED UNDER § 14–301 OF THIS TITLE.
(B) “CERTIFICATION AGENCY ” HAS THE MEANING STAT ED IN § 14–301 OF
THIS TITLE.
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(C) “ECONOMICALLY DISADVAN TAGED INDIVIDUAL ” HAS THE MEANING
STATED IN § 14–301 OF THIS TITLE.
[(b)] (C) (D) “Small business” means:
(1) a certified minority business enterprise[, as defined in § 14–301 of this
title,] that meets the criteria specified under item (3) of this subsection;
(2) a veteran–owned small business enterprise, as defined in § 14–601 of
this title, that meets the criteria specified under item (3) of this subsection; or
(3) a business, other than a broker, that meets the following criteria:
(i) the business is independently owned and operated;
(ii) the business is not a subsidiary of another business;
(iii) the business is not dominant in its field of operation; and
(iv) 1. A. the wholesale operations of the business did not
employ more than 50 persons in its most recently completed 3 fiscal years;
B. the retail operations of the business did not employ more
than 25 persons in its most recently completed 3 fiscal years;
C. the manufacturing operations of the business did not
employ more than 100 persons in its most recently completed 3 fiscal years;
D. the service operations of the business did not employ more
than 100 persons in its most recently completed 3 fiscal years;
E. the construction operations of the business did not employ
more than 50 persons in its most recently completed 3 fiscal years; and
F. the architectural and engineering services of the business
did not employ more than 100 persons in its most recently completed 3 fiscal years; or
2. A. the gross sales of the wholesale operations of the
business did not exceed an average of $4,000,000 in its most recently completed 3 fiscal
years;
B. the gross sales of the retail operations of the business did
not exceed an average of $3,000,000 in its most recently completed 3 fiscal years;
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C. the gross sales of the manufacturing operations of the
business did not exceed an average of $2,000,000 in its most recently completed 3 fiscal
years;
D. the gross sales of the service operations of the business did
not exceed an average of $10,000,000 in its most recently completed 3 fiscal years;
E. the gross sales of the construction operations of the
business did not exceed an average of $7,000,000 in its most recently completed 3 fiscal
years; and
F. the gross sales of the architectural and engineering
services of the business did not exceed an average of $4,500,000 in its most recently
completed 3 fiscal years.
[(c)] (D) (E) “Small AND MINORITY business reserve” means those procurements
that are limited to responses from small businesses OR CERTIFIED MINORIT Y BUSINESS
ENTERPRISES under [§ 14–502(b)] § 14–502(C) of this subtitle.
14–502.
(a) Except as provided in subsection (d) of this section, this subtitle applies to all
procurements by a unit.
(b) This section does not apply to procurements subject to Subtitle 1 of this title.
(c) To the extent practicable, a unit shall structure its procurement procedures to
achieve a minimum of:
(1) 15% 20% of the unit’s total dollar value of goods, supplies, services,
maintenance, construction, construction–related services, and architectural and
engineering service contracts to be made directly to small businesses; AND
(2) 10% OF THE UNIT’S TOTAL DOLLAR VALUE OF GOODS , SUPPLIES,
SERVICES, MAINTENANCE , CONSTRUCTION , CONSTRUCTION –RELATED SERVICES ,
AND ARCHITECTURAL AN D ENGINEERING SERVIC E CONTRACTS TO BE MA DE
DIRECTLY TO CERTIFIE D MINORITY BUSINESS ENTERPRISES .
(d) The total dollar value of procurements by a unit does not include the value of
contracts to which this section does not apply because of a conflict with federal law.
(e) A unit may apply toward the unit’s overall annual Small AND MINORITY
Business Reserve payment achievement only those payments resulting from a procurement
that is designated a Small AND MINORITY Business Reserve procurement ACHIEVEMENT
AWARDS MADE TO A SMA LL BUSINESS UNDER DE SIGNATED SMALL BUSIN ESS WES MOORE, Governor Ch. 583
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RESERVE CONTRACTS AS WELL AS AWARDS MADE TO A SMALL BUSINESS UNDER
NONDESIGNATE D SMALL BUSINESS RES ERVE CONTRACTS .
(f) (1) The Special Secretary for the Office of Small, Minority, and Women
Business Affairs, in consultation with the Attorney General, shall establish standards and
guidelines for participation in the Small AND MINORITY Business Reserve Program every
5 years.
(2) The standards and guidelines established under paragraph (1) of this
subsection shall allow for the registration of businesses for participation in the Small AND
MINORITY Business Reserve Program without the need to file any additional paperwork
other than evidence that the business:
(i) is a small business under this subtitle; and
(ii) 1. is certified as a minority business enterprise under
Subtitle 3 of this title;
2. is certified under the federal Disadvantaged Business
Enterprise Program; or
3. is qualified as a small business under Subtitle 2 of this
title.
14–502.1.
(a) (1) This section applies to a procurement by any unit or agency of the
Executive Branch of State government for goods, supplies, services, maintenance,
construction, construction–related services, architectural services, or engineering services.
(2) This section does not apply to:
(i) procurements made under Subtitle 1 of this title;
(ii) procurements involving expenditures of federal dollars, to the
extent that inclusion in the small business reserve program conflicts with federal law or
grant provisions;
(iii) procurements with a total dollar value under $50,000;
(iv) the procurement of human, social, cultural, or educational
services; or
(v) term and master contracts exempted under subsection (c) of this
section.
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(b) (1) A procurement with a total dollar value between $50,000 and $500,000
shall be designated for the small AND MINORITY business reserve.
(2) Each unit or agency shall implement this subsection in a manner
consistent with all applicable statutes, including the requirements of Subtitle 3 of this title.
(c) (1) A procurement may be exempt from designation under subsection (b) of
this section if the Governor’s Office of Small, Minority, and Women Business Affairs
certifies, concurrently with review of any waiver determinations for certified minority
business enterprise participation contract goals, that it is not practicable to do so.
(2) The Office of State Procurement in the Department of General Services
shall assist the Governor’s Office of Small, Minority, and Women Business Affairs in
establishing procedures and guidelines for the exemption of procurements under paragraph
(1) of this subsection.
14–503.
(a) The Governor’s Office of Small, Minority, and Women Business Affairs shall
adopt regulations to establish procedures for compiling and maintaining a comprehensive
bidder’s list of qualified small businesses AND CERTIFIED MINORITY B USINESS
ENTERPRISES that shall be posted on the Internet.
(b) The Governor’s Office of Small, Minority, and Women Business Affairs shall:
(1) establish guidelines for Small AND MINORITY Business Reserve
Program administration;
(2) ensure agency compliance with the Small AND MINORITY Business
Reserve Program;
(3) provide training and technical assistance to agency personnel; and
(4) collect data regarding the State’s utilization of small AND MINORITY
business reserve vendors.
(c) Each unit shall ensure compliance with the regulations set forth in subsection
(a) of this section.
14–504.
(a) Any procurement by a unit of goods, supplies, services, maintenance,
construction, construction–related services, architectural services, and engineering
services shall be eligible for designation for the small AND MINORITY business reserve.
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(b) A solicitation for procurement that has been designated for a small AND
MINORITY business reserve shall be published in the same manner as required for an
invitation for bids as set forth in § 13–103(c) of this article.
(c) The procurement officer of a unit shall award a procurement contract
designated for a small AND MINORITY business reserve to the small business OR
CERTIFIED MINORITY B USINESS ENTERPRISE that submits a responsive bid that:
(1) is the lowest bid price;
(2) if the invitation for bids so provides, is the lowest evaluated bid price;
or
(3) is the bid or proposal most favorable to the State within the small
business reserve.
14–505.
(a) Within 60 days after the enactment of the budget bill by the General
Assembly, each unit shall submit a report to the Governor’s Office of Small, Minority, and
Women Business Affairs that complies with the reporting requirements set forth in
COMAR 21.11.01.06.
(b) (1) Within 90 days after the end of each fiscal year, each unit shall submit
a report to the Governor’s Office of Small, Minority, and Women Business Affairs that
complies with the requirements of paragraph (2) of this subsection.
(2) For the preceding fiscal year, the report shall:
(i) state the total number and the dollar value of payments the unit
made [to small businesses] under designated small AND MINORITY business reserve
contracts TO:
1. SMALL BUSINESSES ; AND
2. CERTIFIED MINORITY B USINESS ENTERPRISES ;
(ii) state the total number and the dollar value of payments the unit
made [to small businesses] under nondesignated small AND MINORITY business reserve
contracts, including purchase card procurements, TO:
1. SMALL BUSINESSES ; AND
2. CERTIFIED MINORIT Y BUSINESS ENTERPRIS ES;
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(iii) state the total dollar value of payments the unit made under
procurement contracts; and
(iv) contain other such information as required by the Governor’s
Office of Small, Minority, and Women Business Affairs.
(c) On or before December 31 of each year, the Governor’s Office of Small,
Minority, and Women Business Affairs shall submit to the Board of Public Works and,
subject to § 2–1257 of the State Government Article, to the Legislative Policy Committee a
report summarizing the information the Office receives under subsection (b) of this section.
14–504.1.
(A) THE CERTIFICATION AGE NCY, IN CONSULTATION WITH THE
GOVERNOR’S OFFICE OF SMALL, MINORITY, AND WOMEN BUSINESS AFFAIRS,
SHALL DEVELOP AN OUT REACH PROGRAM TO INC REASE THE PARTICIPATIO N OF
SMALL BUSINESSES THA T ARE OWNED BY ECONO MICALLY DISADVANTAGE D
INDIVIDUALS PARTICIP ATING IN THE SMALL BUSINESS RESERVE PROGRAM.
(B) ON OR BEFORE DECEMBER 1 EACH YEAR, THE CERTIFICATION AG ENCY
SHALL SUBMIT TO THE BOARD OF PUBLIC WORKS AND, SUBJECT TO § 2–1257 OF
THE STATE GOVERNMENT ARTICLE, TO THE LEGISLATIVE POLICY COMMITTEE A
REPORT ON:
(1) THE STATUS OF THE OU TREACH PROGRAM REQUI RED UNDER
SUBSECTION (A) OF THIS SECTION; AND
(2) THE TOTAL NUMBER AND DOLLAR VALUE OF AWAR DS MADE TO
SMALL BUSINESSES OWN ED BY ECONOMICALLY D ISADVANTAGED INDIVID UALS
UNDER DESIGNATED SMA LL BUSINESS RESERVE CONTRACTS.
14–505.
(a) Within 60 days after the enactment of the budget bill by the General
Assembly, each unit shall submit a report to the Governor’s Office of Small, Minority, and
Women Business Affairs that complies with the reporting requirements set forth in
COMAR 21.11.01.06.
(b) (1) Within 90 days after the end of each fiscal year, each unit shall submit
a report to the Governor’s Office of Small, Minority, and Women Business Affairs that
complies with the requirements of paragraph (2) of this subsection.
(2) For the preceding fiscal year, the report shall:
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(i) state the total number and the dollar value of [payments]
AWARDS the unit made to small businesses under designated small business reserve
contracts;
(ii) state the total number and the dollar value of [payments]
AWARDS the unit made to small businesses under nondesignated small business reserve
contracts, including purchase card procurements;
(iii) state the total dollar value of [payments] AWARDS the unit made
under procurement contracts; and
(iv) contain other such information as required by the Governor’s
Office of Small, Minority, and Women Business Affairs.
(c) On or before December 31 of each year, the Governor’s Office of Small,
Minority, and Women Business Affairs shall submit to the Board of Public Works and,
subject to § 2–1257 of the State Government Article, to the Legislative Policy Committee a
report summarizing the information the Office receives under subsection (b) of this section.
Chapter 154 of the Acts of 2012, as amended by Chapters 200 and 201 of the Acts
of 2013, Chapter 340 of the Acts of 2017, Chapter 117 of the Acts of 2022, and
Chapters 137 and 138 of the Acts of 2023
SECTION 2. AND BE IT FURTHER ENACTED, That the Certification Agency, in
consultation with the General Assembly and the Office of the Attorney General, shall
initiate a study of the Minority Business Enterprise Program AND THE SMALL AND
MINORITY BUSINESS RESERVE PROGRAM to evaluate the [Program’s] PROGRAMS’
continued compliance with the requirements of the Croson decision and any subsequent
federal or constitutional requirements. In preparation for the study, the Board of Public
Works may adopt regulations authorizing a unit of State government to require bidders
and offerors to submit information necessary for the conduct of the study. The Board of
Public Works may designate that certain information received in accordance with
regulations adopted under this section shall be confidential. Notwithstanding that certain
information may be designated by the Board of Public Works as confidential, the
Certification Agency may provide the information to any person that is under contract with
the Certification Agency to assist in conducting the study. The study shall also evaluate
race–neutral programs and other methods that can be used to address the needs of minority
businesses. The final report on the study shall be submitted to the Legislative Policy
Committee of the General Assembly, in accordance with § 2–1257 of the State Government
Article, on or before September 30, 2024, so that the General Assembly may review the
report before the 2025 Session.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July
1, 2024. It shall remain effective for a period of 1 year and, at the end of June 30, 2025, this
Act, with no further action required by the General Assembly, shall be abrogated and of no
further force and effect October 1, 2024. Ch. 583 2024 LAWS OF MARYLAND
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Approved by the Governor, May 9, 2024.