EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
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SENATE BILL 673
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By: Senator Charles
Introduced and read first time: January 29, 2024
Assigned to: Budget and Taxation
A BILL ENTITLED
AN ACT concerning 1
State Procurement – Small and Minority Business Reserve Program 2
(Parran J. Mitchell MBE Prime Contracting Act) 3
FOR the purpose of altering the Small Business Reserve Program to be the Small and 4
Minority Business Reserve Program; requiring a unit of State government, to the 5
extent practicable, to structure its procurement procedures to achieve a certain 6
minimum percentage of the unit’s total dollar value of certain contracts to be made 7
directly to certified minority business enterprises; requiring a certain study to 8
include the Small and Minority Business Reserve Program; and generally relating 9
to the Small and Minority Business Reserve Program. 10
BY repealing and reenacting, without amendments, 11
Article – State Finance and Procurement 12
Section 14–301(a), (b), and (d) 13
Annotated Code of Maryland 14
(2021 Replacement Volume and 2023 Supplement) 15
BY repealing and reenacting, with amendments, 16
Article – State Finance and Procurement 17
Section 14–501, 14–502, 14–502.1, and 14–503 through 14–505 to be under the 18
amended subtitle “Subtitle 5. Small and Minority Business Reserve Program” 19
Annotated Code of Maryland 20
(2021 Replacement Volume and 2023 Supplement) 21
BY repealing and reenacting, with amendments, 22
Chapter 154 of the Acts of the General Assembly of 2012, as amended by Chapters 23
200 and 201 of the Acts of the General Assembly of 2013, Chapter 340 of the 24
Acts of the General Assembly of 2017, Chapter 117 of the Acts of the General 25
Assembly of 2022, and Chapters 137 and 138 of the Acts of the General 26
Assembly of 2023 27
Section 2 28 2 SENATE BILL 673
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
That the Laws of Maryland read as follows: 2
Article – State Finance and Procurement 3
14–301. 4
(a) In this subtitle the following words have the meanings indicated. 5
(b) “Certification” means the determination that a legal entity is a minority 6
business enterprise for the purposes of this subtitle. 7
(d) “Certified minority business enterprise” means a minority business enterprise 8
that holds a certification. 9
Subtitle 5. Small AND MINORITY Business Reserve Program. 10
14–501. 11
(a) In this subtitle the following words have the meanings indicated. 12
(B) “CERTIFIED MINORITY BU SINESS ENTERPRISE ” HAS THE ME ANING 13
STATED IN § 14–301 OF THIS TITLE. 14
[(b)] (C) “Small business” means: 15
(1) a certified minority business enterprise[, as defined in § 14–301 of this 16
title,] that meets the criteria specified under item (3) of this subsection; 17
(2) a veteran–owned small business enterprise, as defined in § 14–601 of 18
this title, that meets the criteria specified under item (3) of this subsection; or 19
(3) a business, other than a broker, that meets the following criteria: 20
(i) the business is independently owned and operated; 21
(ii) the business is not a subsidiary of another business; 22
(iii) the business is not dominant in its field of operation; and 23
(iv) 1. A. the wholesale operations of the business did not 24
employ more than 50 persons in its most recently completed 3 fiscal years; 25
B. the retail operations of the business did not employ more 26
than 25 persons in its most recently completed 3 fiscal years; 27 SENATE BILL 673 3
C. the manufacturing operations of the business did not 1
employ more than 100 persons in its most recently completed 3 fiscal years; 2
D. the service operations of the business did not employ more 3
than 100 persons in its most recently completed 3 fiscal years; 4
E. the construction operations of the business did not employ 5
more than 50 persons in its most recently completed 3 fiscal years; and 6
F. the architectural and engineering services of the business 7
did not employ more than 100 persons in its most recently completed 3 fiscal years; or 8
2. A. the gross sales of the wholesale operations of the 9
business did not exceed an average of $4,000,000 in its most recently completed 3 fiscal 10
years; 11
B. the gross sales of the retail operations of the business did 12
not exceed an average of $3,000,000 in its most recently completed 3 fiscal years; 13
C. the gross sales of the manufacturing operations of the 14
business did not exceed an average of $2,000,000 in its most recently completed 3 fiscal 15
years; 16
D. the gross sales of the service operations of the business did 17
not exceed an average of $10,000,000 in its most recently completed 3 fiscal years; 18
E. the gross sales of the construction operations of the 19
business did not exceed an average of $7,000,000 in its most recently completed 3 fiscal 20
years; and 21
F. the gross sales of the architectural and engineering 22
services of the business did not exceed an average of $4,500,000 in its most recently 23
completed 3 fiscal years. 24
[(c)] (D) “Small AND MINORITY business reserve” means those procurements 25
that are limited to responses from small businesses OR CERTIFIED MINORIT Y BUSINESS 26
ENTERPRISES under [§ 14–502(b)] § 14–502(C) of this subtitle. 27
14–502. 28
(a) Except as provided in subsection (d) of this section, this subtitle applies to all 29
procurements by a unit. 30
(b) This section does not apply to procurements subject to Subtitle 1 of this title. 31
4 SENATE BILL 673
(c) To the extent practicable, a unit shall structure its procurement procedures to 1
achieve a minimum of: 2
(1) 15% of the unit’s total dollar value of goods, supplies, services, 3
maintenance, construction, construction–related services, and architectural and 4
engineering service contracts to be made directly to small businesses; AND 5
(2) 10% OF THE UNIT’S TOTAL DOLLAR VALUE OF GOODS , SUPPLIES, 6
SERVICES, MAINTENANCE , CONSTRUCTION , CONSTRUCTION –RELATED SERVICES , 7
AND ARCHITECTURAL AN D ENGINEERING SERVIC E CONTRACTS TO BE MA DE 8
DIRECTLY TO CERTIFIE D MINORITY BUSINESS ENTERPRISES . 9
(d) The total dollar value of procurements by a unit does not include the value of 10
contracts to which this section does not apply because of a conflict with federal law. 11
(e) A unit may apply toward the unit’s overall annual Small AND MINORITY 12
Business Reserve payment achievement only those payments resulting from a procurement 13
that is designated a Small AND MINORITY Business Reserve procurement. 14
(f) (1) The Special Secretary for the Office of Small, Minority, and Women 15
Business Affairs, in consultation with the Attorney General, shall establish standards and 16
guidelines for participation in the Small AND MINORITY Business Reserve Program every 17
5 years. 18
(2) The standards and guidelines established under paragraph (1) of this 19
subsection shall allow for the registration of businesses for participation in the Small AND 20
MINORITY Business Reserve Program without the need to file any additional paperwork 21
other than evidence that the business: 22
(i) is a small business under this subtitle; and 23
(ii) 1. is certified as a minority business enterprise under 24
Subtitle 3 of this title; 25
2. is certified under the federal Disadvantaged Business 26
Enterprise Program; or 27
3. is qualified as a small business under Subtitle 2 of this 28
title. 29
14–502.1. 30
(a) (1) This section applies to a procurement by any unit or agency of the 31
Executive Branch of State government for goods, supplies, services, maintenance, 32
construction, construction–related services, architectural services, or engineering services. 33
SENATE BILL 673 5
(2) This section does not apply to: 1
(i) procurements made under Subtitle 1 of this title; 2
(ii) procurements involving expenditures of federal dollars, to the 3
extent that inclusion in the small business reserve program conflicts with federal law or 4
grant provisions; 5
(iii) procurements with a total dollar value under $50,000; 6
(iv) the procurement of human, social, cultural, or educational 7
services; or 8
(v) term and master contracts exempted under subsection (c) of this 9
section. 10
(b) (1) A procurement with a total dollar value between $50,000 and $500,000 11
shall be designated for the small AND MINORITY business reserve. 12
(2) Each unit or agency shall implement this subsection in a manner 13
consistent with all applicable statutes, including the requirements of Subtitle 3 of this title. 14
(c) (1) A procurement may be exempt from designation under subsection (b) of 15
this section if the Governor’s Office of Small, Minority, and Women Business Affairs 16
certifies, concurrently with review of any waiver determinations for certified minority 17
business enterprise participation contract goals, that it is not practicable to do so. 18
(2) The Office of State Procurement in the Department of General Services 19
shall assist the Governor’s Office of Small, Minority, and Women Business Affairs in 20
establishing procedures and guidelines for the exemption of procurements under paragraph 21
(1) of this subsection. 22
14–503. 23
(a) The Governor’s Office of Small, Minority, and Women Business Affairs shall 24
adopt regulations to establish procedures for compiling and maintaining a comprehensive 25
bidder’s list of qualified small businesses AND CERTIFIED MINORI TY BUSINESS 26
ENTERPRISES that shall be posted on the Internet. 27
(b) The Governor’s Office of Small, Minority, and Women Business Affairs shall: 28
(1) establish guidelines for Small AND MINORITY Business Reserve 29
Program administration; 30
(2) ensure agency compliance with the Small AND MINORITY Business 31
Reserve Program; 32
6 SENATE BILL 673
(3) provide training and technical assistance to agency personnel; and 1
(4) collect data regarding the State’s utilization of small AND MINORITY 2
business reserve vendors. 3
(c) Each unit shall ensure compliance with the regulations set forth in subsection 4
(a) of this section. 5
14–504. 6
(a) Any procurement by a unit of goods, supplies, services, maintenance, 7
construction, construction–related services, architectural services, and engineering 8
services shall be eligible for designation for the small AND MINORITY business reserve. 9
(b) A solicitation for procurement that has been designated for a small AND 10
MINORITY business reserve shall be published in the same manner as required for an 11
invitation for bids as set forth in § 13–103(c) of this article. 12
(c) The procurement officer of a unit shall award a procurement contract 13
designated for a small AND MINORITY business reserve to the small business OR 14
CERTIFIED MINORITY B USINESS ENTERPRISE that submits a responsive bid that: 15
(1) is the lowest bid price; 16
(2) if the invitation for bids so provides, is the lowest evaluated bid price; 17
or 18
(3) is the bid or proposal most favorable to the State within the small 19
business reserve. 20
14–505. 21
(a) Within 60 days after the enactment of the budget bill by the General 22
Assembly, each unit shall submit a report to the Governor’s Office of Small, Minority, and 23
Women Business Affairs that complies with the reporting requirements set forth in 24
COMAR 21.11.01.06. 25
(b) (1) Within 90 days after the end of each fiscal year, each unit shall submit 26
a report to the Governor’s Office of Small, Minority, and Women Business Affairs that 27
complies with the requirements of paragraph (2) of this subsection. 28
(2) For the preceding fiscal year, the report shall: 29
(i) state the total number and the dollar value of payments the unit 30
made [to small businesses] under designated small AND MINORITY business reserve 31
contracts TO: 32 SENATE BILL 673 7
1. SMALL BUSINESSES ; AND 1
2. CERTIFIED MINORITY B USINESS ENTERPRISES ; 2
(ii) state the total number and the dollar value of payments the unit 3
made [to small businesses] under nondesignated small AND MINORITY business reserve 4
contracts, including purchase card procurements, TO: 5
1. SMALL BUSINESSES ; AND 6
2. CERTIFIED MINORITY B USINESS ENTERPRISES ; 7
(iii) state the total dollar value of payments the unit made under 8
procurement contracts; and 9
(iv) contain other such information as required by the Governor’s 10
Office of Small, Minority, and Women Business Affairs. 11
(c) On or before December 31 of each year, the Governor’s Office of Small, 12
Minority, and Women Business Affairs shall submit to the Board of Public Works and, 13
subject to § 2–1257 of the State Government Article, to the Legislative Policy Committee a 14
report summarizing the information the Office receives under subsection (b) of this section. 15
Chapter 154 of the Acts of 2012, as amended by Chapters 200 and 201 of the Acts 16
of 2013, Chapter 340 of the Acts of 2017, Chapter 117 of the Acts of 2022, and 17
Chapters 137 and 138 of the Acts of 2023 18
SECTION 2. AND BE IT FURTHER ENACTED, That the Certification Agency, in 19
consultation with the General Assembly and the Office of the Attorney General, shall 20
initiate a study of the Minority Business Enterprise Program AND THE SMALL AND 21
MINORITY BUSINESS RESERVE PROGRAM to evaluate the [Program’s] PROGRAMS’ 22
continued compliance with the requirements of the Croson decision and any subsequent 23
federal or constitutional requirements. In preparation for the study, the Board of Public 24
Works may adopt regulations authorizing a unit of State government to require bidders 25
and offerors to submit information necessary for the conduct of the study. The Board of 26
Public Works may designate that certain information received in accordance with 27
regulations adopted under this section shall be confidential. Notwithstanding that certain 28
information may be designated by the Board of Public Works as confidential, the 29
Certification Agency may provide the information to any person that is under contract with 30
the Certification Agency to assist in conducting the study. The study shall also evaluate 31
race–neutral programs and other methods that can be used to address the needs of minority 32
businesses. The final report on the study shall be submitted to the Legislative Policy 33
Committee of the General Assembly, in accordance with § 2–1257 of the State Government 34
Article, on or before September 30, 2024, so that the General Assembly may review the 35
report before the 2025 Session. 36 8 SENATE BILL 673
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 1
1, 2024. It shall remain effective for a period of 1 year and, at the end of June 30, 2025, this 2
Act, with no further action required by the General Assembly, shall be abrogated and of no 3
further force and effect. 4