EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTING LA W.
[Brackets] indicate matter deleted from existing law.
*hb0500*
HOUSE BILL 500
P2 5lr0451
CF SB 426
By: The Speaker (By Request – Administration) and Delegates Allen, Amprey,
Bhandari, Boafo, Cardin, Edelson, Fennell, Foley, Hornberger, Jackson,
D. Jones, Kerr, J. Long, Phillips, Ruff, Simpson, Stein, Taveras, Taylor,
Toles, Turner, White Holland, Wilkins, Williams, Wims, Woods, Woorman,
and Wu
Introduced and read first time: January 22, 2025
Assigned to: Health and Government Operations
A BILL ENTITLED
AN ACT concerning 1
Procurement Reform Act of 2025 2
FOR the purpose of authorizing the Secretary of General Services to delegate certain 3
powers and duties to the Chief Procurement Officer; altering the authority of the 4
Department of General Services to engage in or control procurement of certain 5
equipment and services; altering the authority of the Department of Transportation 6
and the Maryland Transportation Authority to engage in procurement for certain 7
supplies and services for transportation–related activities; authorizing the head of a 8
unit or a designee of the head of the unit to designate small business preferences 9
under certain circumstances; altering certain dollar values at which a unit must 10
publish notice of certain procurements, submit certain reports, and designate a 11
procurement for the small business reserve, at which a procurement officer may 12
require bid security or other security on certain procurements, and at which certain 13
apprenticeship requirements apply; requiring oral presentations for certain 14
procurements under certain circumstances; authorizing the Chief Procurement 15
Officer or the Chief Procurement Officer’s designee to approve the use of 16
noncompetitive negotiation for certain classes of procurements; altering certain 17
authority to authorize a procurement officer to make a procurement on an expedited 18
basis and to approve the cancellation of a solicitation or rejection of bids or proposals; 19
requiring a unit to report certain information to the Board of Public Works after 20
awarding an expedited procurement contract; altering the membership of the Pricing 21
and Selection Committee for Preferred Providers; transferring the Employment 22
Works Program from the Department of General Services to the Office of Small, 23
Minority, and Women Business Affairs; altering certain authority of the Special 24
Secretary for Small, Minority, and Women Business Affairs and of units with regard 25
to the Minority Business Enterprise Program, Small Business Preference Program, 26
Veteran–Owned Small Business Enterprise Program, and Veteran–Owned Small 27 2 HOUSE BILL 500
Business Reserve and associated goals; authorizing a primary procurement unit to 1
limit or revoke a unit’s ability to conduct small procurements under certain 2
circumstances; requiring the Board to propose updated regulations related to 3
expedited change orders under certain circumstances; authorizing modifications to 4
State contracts under certain circumstances; clarifying that bids and proposals can 5
be considered for procurement contracts designated for a small business reserve; 6
clarifying pay–for–success contracting as a contract type and not a source selection 7
method; authorizing the Chief Procurement Officer to establish additional methods 8
of procurement source selection; requiring an intergovernmental cooperative 9
purchasing agreement to be approved by the primary procurement unit head or 10
designee, or the Chief Procurement Officer or designee; altering certain thresholds 11
for master contracting; requiring a unit to issue a solicitation for a task order to a 12
certain number of contractors under certain circumstances; requiring a contractor to 13
submit a workforce diversity plan or supplier diversity plan with procurements of a 14
certain value; altering a State policy regarding the payment of certain procurement 15
contracts; requiring contractors awarded certain procurements to use a certain 16
internship program or a certain apprenticeship program; establishing a procurement 17
preference for good labor practices certified businesses; requiring certain State 18
departments to establish a working group; and generally relating to State 19
procurement. 20
BY repealing and reenacting, without amendments, 21
Article – Correctional Services 22
Section 10–101(a) 23
Annotated Code of Maryland 24
(2017 Replacement Volume and 2024 Supplement) 25
BY repealing and reenacting, with amendments, 26
Article – Correctional Services 27
Section 10–101(c) 28
Annotated Code of Maryland 29
(2017 Replacement Volume and 2024 Supplement) 30
BY repealing and reenacting, without amendments, 31
Article – Election Law 32
Section 2–109(a)(1) 33
Annotated Code of Maryland 34
(2022 Replacement Volume and 2024 Supplement) 35
BY repealing and reenacting, with amendments, 36
Article – Election Law 37
Section 2–109(a)(3) 38
Annotated Code of Maryland 39
(2022 Replacement Volume and 2024 Supplement) 40
BY repealing and reenacting, without amendments, 41
Article – State Finance and Procurement 42 HOUSE BILL 500 3
Section 4–301(a), 4–316(a), 11–101(a), 12–111(a)(1), 13–101(a), 13–102(b), 14–106(a) 1
and (b), 14–401(a)(1), and 17–602(a) 2
Annotated Code of Maryland 3
(2021 Replacement Volume and 2024 Supplement) 4
BY repealing and reenacting, with amendments, 5
Article – State Finance and Procurement 6
Section 4–301(c) and (d), 4–303, 4–314, 11–101(k) through (y), 12–107(b)(2)(i)2. and 7
11., (3), and (4)(v), 12–111(a)(3)(i), 13–101(h) and (i), 13–102.1(b), 8
13–103(a)(2)(v), (c)(3), and (f), 13–104(g), 13–106(a)(2), 13–108(b)(1) and (8)(i) 9
and (d), 13–110(b)(7), 13–113(d), (e), and (f), 13–206(b), 13–207(a), (b), and 10
(c)(1), 13–216, 14–106(c), 14–108(b) and (c), 14–203(a), 14–204, 14–205, 11
14–302(a)(1)(ii)1., (iii)1., (iv)1., (2), and (8) through (15), 14–303(a)(1)(ii) and 12
(b)(12), (13), and (18) through (22), 14–401(a)(5), 14–502.1(a) and (b), 13
14–504(c), 14–602, 15–103, 15–111(a), 15–112(e), 17–103, 17–602(b) and (e), 14
17–604(a), 19–114, and 19–116 15
Annotated Code of Maryland 16
(2021 Replacement Volume and 2024 Supplement) 17
BY adding to 18
Article – State Finance and Procurement 19
Section 11–101(k) and (y), 12–107(b)(2)(i)11. and 12., 13–102(a)(11) and (c), 20
13–104(d)(3), 13–109(f), 13–228, 13–229, 14–302(a)(8), and 14–602.1; 14–801 21
through 14–805 to be under the new subtitle “Subtitle 8. Internship and 22
Registered Apprenticeship Program”; 14–901 through 14–906 to be under the 23
new subtitle “Subtitle 9. Good Labor Practices Preference”; and 15–112.1 24
Annotated Code of Maryland 25
(2021 Replacement Volume and 2024 Supplement) 26
BY repealing 27
Article – State Finance and Procurement 28
Section 12–107(b)(2)(i)10. and (5), 13–101(g), 13–102(a)(11), 13–112.1, and 29
14–303(b)(17) 30
Annotated Code of Maryland 31
(2021 Replacement Volume and 2024 Supplement) 32
BY repealing and reenacting, without amendments, 33
Article – State Government 34
Section 4–113(a) 35
Annotated Code of Maryland 36
(2021 Replacement Volume and 2024 Supplement) 37
BY repealing and reenacting, with amendments, 38
Article – State Government 39
Section 4–113(b)(5) 40
Annotated Code of Maryland 41
(2021 Replacement Volume and 2024 Supplement) 42 4 HOUSE BILL 500
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
That the Laws of Maryland read as follows: 2
Article – Correctional Services 3
10–101. 4
(a) In this subtitle the following words have the meanings indicated. 5
(c) “State correctional facility” has the meaning stated in [§ 11–101(w)] § 11–101 6
of the State Finance and Procurement Article. 7
Article – Election Law 8
2–109. 9
(a) (1) In this section the following words have the meanings indicated. 10
(3) “Contract” means an agreement in any form entered into by a 11
governmental entity for a procurement as defined in [§ 11–101(m)(1)] § 11–101 of the State 12
Finance and Procurement Article. 13
Article – State Finance and Procurement 14
4–301. 15
(a) In this subtitle the following words have the meanings indicated. 16
(c) (1) “Services” means the rendering of time, effort, or work, rather than the 17
furnishing of a specific physical product other than reports incidental to the required 18
performance. 19
(2) “Services” includes maintenance, construction–related services, 20
architectural services, engineering services, INFORMATION TECHNOLO GY SERVICES, 21
CYBERSECURITY , and the professional, personal, or contractual services provided by 22
attorneys, accountants, physicians, consultants, and other professionals who are 23
independent contractors. 24
(d) “Supplies” means tangible property, including COMMODITIES , 25
INFORMATION TECHNOLO GY HARDWARE AND SOFT WARE, equipment, and materials. 26
4–303. 27
HOUSE BILL 500 5
The Secretary may delegate any power or duty set forth in Part I or Part II of this 1
subtitle OR DIVISION II OF THIS ARTICLE to the Chief Procurement Officer of the Office 2
of State Procurement. 3
4–314. 4
At time intervals set by the Secretary OR CHIEF PROCUREMENT OFFICER, each 5
unit that procures supplies under Division II of this article shall send to the Secretary OR 6
CHIEF PROCUREMENT OFFICER estimates of the amount and quality of any needed 7
supplies. 8
4–316. 9
(a) Subject to the initial approval of the Secretary or Chief Procurement Officer, 10
the appropriate purchasing unit for the following entities may use the services of the 11
Department to purchase services, materials, supplies, and equipment: 12
(1) a county; 13
(2) a municipality; 14
(3) a governmental unit in the State; 15
(4) a public or quasi–public agency that: 16
(i) receives State money; and 17
(ii) is exempt from taxation under § 501(c)(3) of the Internal Revenue 18
Code; 19
(5) a private elementary or secondary school that: 20
(i) either has been issued a certificate of approval from the State 21
Board of Education or is accredited by the Association of Independent Schools; and 22
(ii) is exempt from taxation under § 501(c)(3) of the Internal Revenue 23
Code; or 24
(6) a nonpublic institution of higher education as provided under § 17–106 25
of the Education Article. 26
11–101. 27
(a) In this Division II the following words have the meanings indicated unless: 28
(1) the context clearly requires a different meaning; or 29
6 HOUSE BILL 500
(2) a different definition is provided for a particular title or provision. 1
(K) “INFORMATION TECHNOLOG Y” HAS THE MEANING STAT ED IN § 3.5–301 2
OF THIS ARTICLE. 3
[(k)] (L) “Invitation for bids” means any document used for soliciting bids under 4
§ 13–103 of this article. 5
[(l)] (M) “Person” means an individual, receiver, trustee, guardian, personal 6
representative, fiduciary, or representative of any kind and any partnership, firm, 7
association, corporation, or other entity. 8
[(m)] (N) “Primary procurement units” means: 9
(1) the State Treasurer; 10
(2) the Department of General Services; 11
(3) the Department of Transportation; 12
(4) the University System of Maryland; 13
(5) the Maryland Port Commission; 14
(6) the Morgan State University; and 15
(7) the St. Mary’s College of Maryland. 16
[(n)] (O) (1) “Procurement” means the process of: 17
(i) leasing real or personal property as lessee; or 18
(ii) buying or otherwise obtaining supplies, services, construction, 19
construction related services, architectural services, engineering services, or services 20
provided under an energy performance contract. 21
(2) “Procurement” includes the solicitation and award of procurement 22
contracts and all phases of procurement contract administration. 23
[(o)] (P) (1) “Procurement contract” means an agreement in any form entered 24
into by a unit for procurement. 25
(2) “Procurement contract” does not include: 26
(i) a collective bargaining agreement with an employee 27
organization; 28 HOUSE BILL 500 7
(ii) an agreement with a contractual employee, as defined in § 1
1–101(d) of the State Personnel and Pensions Article; 2
(iii) a Medicaid, Judicare, or similar reimbursement contract for 3
which law sets: 4
1. user or recipient eligibility; and 5
2. price payable by the State; or 6
(iv) a Medicaid contract with a managed care organization, as 7
defined in § 15–101(e) of the Health – General Article as to which regulations adopted by 8
the Department establish: 9
1. recipient eligibility; 10
2. minimum qualifications for managed care organizations; 11
and 12
3. criteria for enrolling recipients in managed care 13
organizations. 14
[(p)] (Q) “Procurement officer” means an individual authorized by a unit to: 15
(1) enter into a procurement contract; 16
(2) administer a procurement contract; or 17
(3) make determinations and findings with respect to a procurement 18
contract. 19
[(q)] (R) “Proposal” means a response to any solicitation other than an invitation 20
for bids. 21
[(r)] (S) “Request for proposals” means any document used for soliciting 22
proposals. 23
[(s)] (T) “Responsible bidder or offeror” means a person who: 24
(1) has the capability in all respects to perform fully the requirements for 25
a procurement contract; and 26
(2) possesses the integrity and reliability that will ensure good faith 27
performance. 28
[(t)] (U) “Responsive bid” means a bid that: 29 8 HOUSE BILL 500
(1) is submitted under § 13–103 of this article; and 1
(2) conforms in all material respects to the invitation for bids. 2
[(u)] (V) (1) Except as provided in paragraph (3) of this subsection, “services” 3
means: 4
(i) the labor, time, or effort of a contractor; and 5
(ii) any product or report necessarily associated with the rendering 6
of a service. 7
(2) “Services” includes: 8
(I) services provided by attorneys, accountants, physicians, 9
consultants, and other professionals who are independent contractors; AND 10
(II) INFORMATION TECHNOLO GY SERVICES AND 11
CYBERSECURITY . 12
(3) “Services” does not include: 13
(i) construction related services; 14
(ii) architectural services; 15
(iii) engineering services; or 16
(iv) energy performance contract services. 17
[(v)] (W) “State” means: 18
(1) a state, possession, territory, or commonwealth of the United States; or 19
(2) the District of Columbia. 20
[(w)] (X) (1) “State correctional facilities” means correctional institutions, 21
and all places of correctional confinement, that are located within the State of Maryland 22
and are primarily operated by the Maryland State government. 23
(2) “State correctional facilities” includes Patuxent Institution. 24
(Y) “STATEWIDE CONTRACT ” MEANS A CONTRACT THA T HAS BEEN 25
PROCURED BY A PRIMAR Y PROCUREMENT UNIT TO BE USED BY ANY UNIT OR AN 26
ENTITY LISTED IN § 4–316 OF THIS ARTICLE. 27 HOUSE BILL 500 9
[(x)] (Z) (1) “Supplies” means: 1
(i) insurance; 2
(ii) tangible personal property INCLUDING INFORMATIO N 3
TECHNOLOGY HARDWARE AND SOFTWARE ; 4
(iii) printing; and 5
(iv) services necessarily associated with insurance or tangible 6
personal property. 7
(2) “Supplies” does not include: 8
(i) an interest in real property; or 9
(ii) tangible personal property acquired or used in connection with 10
an energy performance contract. 11
[(y)] (AA) (1) “Unit” means an officer or other entity that is in the Executive 12
Branch of the State government and is authorized by law to enter into a procurement 13
contract. 14
(2) “Unit” does not include: 15
(i) a bistate, multistate, bicounty, or multicounty governmental 16
agency; or 17
(ii) a special tax district, sanitary district, drainage district, soil 18
conservation district, water supply district, or other political subdivision of the State. 19
12–107. 20
(b) Subject to the authority of the Board, jurisdiction over procurement is as 21
follows: 22
(2) the Department of General Services may: 23
(i) engage in or control procurement of: 24
2. supplies, including supplies under Title 4, Subtitle 3 of 25
this article, but excluding insurance[, information processing equipment,] and motor 26
vehicle leases; 27
10 HOUSE BILL 500
[10. information processing equipment and associated 1
services, as provided in Title 3.5, Subtitle 3 of this article; and] 2
[11.] 10. telecommunication equipment, systems, or 3
services, as provided in Title 3.5, Subtitle 4 of this article; 4
11. INFORMATION TECHNOLO GY SYSTEM 5
MODERNIZATION , AS PROVIDED IN TITLE 3.5, SUBTITLE 3 OF THIS ARTICLE; AND 6
12. CYBERSECURITY UPGRAD ES AND MODERNIZATION , 7
AS PROVIDED IN TITLE 3.5, SUBTITLE 3 OF THIS ARTICLE; 8
(3) the Department of Transportation and the Maryland Transportation 9
Authority, without the approval of any of the other primary procurement units, may engage 10
in the procurement of: 11
(i) construction that is related to transportation, as provided in the 12
Transportation Article; 13
(ii) construction related services that are related to transportation, 14
as provided in the Transportation Article; 15
(iii) architectural or engineering services that are related to 16
transportation, under Title 13, Subtitle 3 of this article; 17
(IV) SUPPLIES FOR TRANSPO RTATION–RELATED ACTIVITIES , 18
BUT EXCLUDING : 19
1. SUPPLIES FUNDED BY T HE PROCEEDS FROM STATE 20
GENERAL OBLIGATION B ONDS; AND 21
2. INSURANCE; 22
(V) SERVICES FOR TRANSPO RTATION–RELATED ACTIVITIES , 23
BUT EXCLUDING BANKIN G AND FINANCIAL SERV ICES UNDER THE AUTHO RITY OF 24
THE STATE TREASURER UNDER ITEM (1) OF THIS SUBSECTION ; 25
[(iv)] (VI) rolling stock and other property peculiar to the operation 26
of a transit system, as provided in § 7–403 of the Transportation Article; 27
[(v)] (VII) supplies for aeronautics related activities, including motor 28
vehicles and information processing supplies, but excluding: 29
1. supplies funded by the proceeds from State general 30
obligation bonds; and 31 HOUSE BILL 500 11
2. insurance; and 1
[(vi)] (VIII) services for aeronautics related activities, including 2
information processing services, but excluding banking and financial services under the 3
authority of the State Treasurer under item (1) of this subsection; AND 4
(4) the Maryland Port Commission, without the approval of any of the 5
other primary procurement units, may engage in the procurement of: 6
(v) leases of real property for port related activities unless the lease 7
payments are from the General Fund of the State[; and]. 8
[(5) the Department of General Services, without the approval of any other 9
primary procurement unit, may engage in or control procurement of: 10
(i) information processing equipment, cloud computing equipment, 11
and associated services, as provided in Title 3.5, Subtitle 3 of this article; 12
(ii) information technology system modernization, as provided in 13
Title 3.5, Subtitle 3 of this article; 14
(iii) telecommunication equipment, systems, or services, as provided 15
in Title 3.5, Subtitle 4 of this article; and 16
(iv) cybersecurity upgrades and modernization, as provided in Title 17
3.5, Subtitle 3 of this article.] 18
12–111. 19
(a) (1) In this section the following words have the meanings indicated. 20
(3) (i) Except as provided in subparagraph (ii) of this paragraph, 21
“services” has the meaning stated in [§ 11–101(u)] § 11–101 of this article. 22
13–101. 23
(a) In this subtitle the following words have the meanings indicated. 24
[(g) “Pay–for–success contracting” means a performance–based procurement 25
method through which a unit contracts with an organization to deliver services or 26
commodities in exchange for payment based on the achievement of outcomes.] 27
[(h)] (G) “Person” includes, unless the context requires otherwise: 28
(1) the State; 29 12 HOUSE BILL 500
(2) a county, a municipal corporation, or any other political subdivision; 1
and 2
(3) any unit of the State government or a political subdivision. 3
[(i)] (H) “Task order” means a procurement process in which only those vendors 4
with master contracts may compete to provide the services, supplies, or commodities under 5
the procurement. 6
13–102. 7
(a) The following procurement methods are authorized at the procurement 8
officer’s discretion, where applicable: 9
[(11) pay–for–success contracting under § 13–112.1 of this subtitle.] 10
(11) A SOURCE SELECTION M ETHOD ESTABLISHED UN DER 11
SUBSECTION (C) OF THIS SECTION. 12
(b) (1) In awarding a procurement contract for human, social, cultural, or 13
educational service, the preferred method is by competitive sealed proposals under § 14
13–104 of this subtitle. 15
(2) In awarding a procurement contract for a lease of real property, the 16
preferred method is by competitive sealed proposals under § 13–105 of this subtitle. 17
(3) Procurement under an intergovernmental cooperative purchasing 18
agreement is appropriate in situations where the State is expected to achieve a better price 19
as the result of economies of scale or to otherwise benefit by purchasing in cooperation with 20
another governmental entity. 21
(C) THE CHIEF PROCUREMENT OFFICER MAY ESTABLISH METHODS OF 22
SOURCE SELECTION IN ADDITION TO THOSE LI STED IN SUBSECTION (A) OF THIS 23
SECTION AND PROVIDE GUIDELINES FOR USAGE . 24
13–102.1. 25
(b) (1) Subject to approval by the Board of Public Works, the Chief 26
Procurement Officer may establish fees for the use of eMaryland Marketplace by an entity 27
that publishes a notice of a procurement, conducts a procurement, or publishes a notice of 28
award. 29
(2) The Chief Procurement Officer may not charge a unit, as defined in [§ 30
11–101(y)] § 11–101 of this article, a fee under this subsection. 31
HOUSE BILL 500 13
13–103. 1
(a) (2) Subject to subsection (b) of this section, an invitation for bids shall 2
include: 3
(v) if the [Secretary of General Services, the Secretary of 4
Transportation, or the Chancellor of the University System of Maryland] HEAD OF THE 5
UNIT OR THE HEAD OF THE UNIT’S DESIGNEE has so designated, the small business 6
preference. 7
(c) (3) The unit shall publish notice in eMaryland Marketplace at least 20 days 8
before bid opening if: 9
(i) the procurement officer reasonably expects bid prices to exceed 10
[$50,000] THE SMALL PROCUREMEN T AMOUNT SPECIFIED I N § 13–109 OF THIS 11
SUBTITLE or a lower amount set by the Board by regulation in accordance with Title 10, 12
Subtitle 1 of the State Government Article; and 13
(ii) at least part of the procurement contract is to be performed in 14
this State or the District of Columbia. 15
(f) Not more than 30 days after the execution and approval of a procurement 16
contract in excess of [$50,000] THE SMALL PROCUREMENT AMOUNT S PECIFIED IN § 17
13–109 OF THIS SUBTITLE awarded under this section, or a lower amount set by the Board 18
by regulation in accordance with Title 10, Subtitle 1 of the State Government Article, a unit 19
shall publish notice of the award in eMaryland Marketplace. 20
13–104. 21
(d) (3) (I) EXCEPT AS PROVIDED IN SUBPARAGRAPH (II) OF THIS 22
PARAGRAPH , AN ORAL PRESENTATION IS REQUIRED WHEN : 23
1. THE TOTAL VALUE OF T HE CONTRACT IS EXPEC TED 24
TO EXCEED $2,000,000 FOR ARCHITECTURAL AN D ENGINEERING SERVICES; 25
2. THE TOTAL VALUE OF T HE CONTRACT IS EXPEC TED 26
TO EXCEED $10,000,000 FOR CONSTRUCTION AND CONSTRUCTION RELATED 27
SERVICES; OR 28
3. FOR ANY OTHER PROCUR EMENT, INCLUDING 29
INFORMATION TECHNOLO GY AND PROFESSIONAL SERVICES, THE TOTAL VALUE OF 30
THE CONTRACT IS EXPECTED TO EXCEED $5,000,000. 31
14 HOUSE BILL 500
(II) IF THE PROCUREMENT OF FICER MAKES A WRITTE N 1
DETERMINATION THAT O RAL PRESENTATIONS AR E UNLIKELY TO AID IN THE 2
EVALUATION PROCESS , ORAL PRESENTATIONS A RE NOT REQUIRED . 3
(g) A unit shall publish notice of a contract in excess of [$50,000] THE SMALL 4
PROCUREMENT AMOUNT S PECIFIED IN § 13–109 OF THIS SUBTITLE awarded under 5
this section, or a lower amount set by the Board by regulation in accordance with Title 10, 6
Subtitle 1 of the State Government Article in eMaryland Marketplace. 7
13–106. 8
(a) A procurement officer may award a procurement contract on the basis of 9
noncompetitive negotiation if: 10
(2) the procurement is one of a class for which the [Department of Budget 11
and Management] CHIEF PROCUREMENT OFFICER OR THE CHIEF PROCUREMENT 12
OFFICER’S DESIGNEE has approved the use of noncompetitive negotiation; and 13
13–108. 14
(b) (1) Except as provided in § 11–205 (“Collusion”), § 10–204 (“Approval for 15
designated contracts”), § 13–219 (“Required clauses – Nondiscrimination clause”), [§ 16
13–221 (“Disclosures to Secretary of State”),] Title 16 (“Suspension and Debarment of 17
Contractors”), or Title 17 (“Special Provisions – State and Local Subdivisions”) of this 18
article, with the approval of the head of a unit, its procurement officer may make an 19
emergency procurement by any method that the procurement officer considers most 20
appropriate to avoid or mitigate serious damage to public health, safety, or welfare. 21
(8) (i) This paragraph applies only to the award of a contract or a 22
contract modification made under this subsection that, with prior modifications, exceeds 23
[$50,000] THE SMALL PROCUREMEN T AMOUNT SPECIFIED I N § 13–109 OF THIS 24
SUBTITLE. 25
(d) (1) Except as provided in § 11–205 (“Collusion”), § 10–204 (“Approval for 26
designated contracts”), § 13–219 (“Required clauses – Nondiscrimination clause”), 27
[§ 13–221 (“Disclosures to Secretary of State”),] Title 16 (“Suspension and Debarment of 28
Contractors”), or Title 17 (“Special Provisions – State and Local Subdivisions”) of this 29
article, with the approval of the head of the unit and the [Board] CHIEF PROCUREMENT 30
OFFICER OR THE CHIEF PROCUREMENT OFFICER’S DESIGNEE, a unit’s procurement 31
officer may make a procurement on an expedited basis if the head of the unit and the 32
[Board] HEAD OF THE PRIMARY PROCUREMENT UNIT , HEAD OF THE PRIMARY 33
PROCUREMENT UNIT ’S DESIGNEE, CHIEF PROCUREMENT OFFICER, OR CHIEF 34
PROCUREMENT OFFICER’S DESIGNEE find that: 35
(i) urgent circumstances require prompt action; 36 HOUSE BILL 500 15
(ii) an expedited procurement best serves the public interest; and 1
(iii) the need for the expedited procurement outweighs the benefits of 2
making the procurement on the basis of competitive sealed bids or competitive sealed 3
proposals. 4
(2) The procurement officer shall attempt to obtain as much competition as 5
reasonably possible TO OBTAIN THE BEST V ALUE TO THE STATE WITHIN THE 6
LIMITATIONS REQUIRIN G THE USE OF THE EXP EDITED PROCUREMENT . 7
(3) AFTER AWARDING AN EXP EDITED PROCURE MENT CONTRACT 8
UNDER THIS SUBSECTIO N, A UNIT SHALL REPORT THE EXPEDITED PROCUR EMENT 9
CONTRACT AND THE JUS TIFICATION FOR THE C ONTRACT TO THE BOARD. 10
13–109. 11
(F) IF A PRIMARY PROCUREM ENT UNIT DETERMINES THAT A UNIT DOES 12
NOT ADHERE TO THE ES TABLISHED SMALL PROCUREMENT REGULATI ONS, THE 13
PRIMARY PROCUREMENT UNIT MAY LIMIT OR RE VOKE A UNIT ’S ABILITY TO 14
CONDUCT SMALL PROCUR EMENTS. 15
13–110. 16
(b) (7) If a primary procurement unit sponsors or participates in an 17
intergovernmental cooperative purchasing agreement, the intergovernmental cooperative 18
purchasing agreement shall be: 19
(i) approved by: 20
1. the [unit] head OF THE PRIMARY PROCU REMENT UNIT 21
OR THE HEAD OF THE P RIMARY PROCUREMENT U NIT’S DESIGNEE; OR 22
2. THE CHIEF PROCUREMENT OFFICER OR THE CHIEF 23
PROCUREMENT OFFICER’S DESIGNEE; and 24
(ii) subject to any other approval required by law. 25
[13–112.1. 26
(a) (1) In this section the following words have the meanings indicated. 27
(2) “Aggregator” means a person that: 28
(i) provides or contracts for environmental outcomes; or 29
16 HOUSE BILL 500
(ii) provides or raises capital to finance delivery of environmental 1
outcomes. 2
(3) “Environmental outcome” means a commodity that is modeled or 3
directly measured as a single, quantifiable, and certified unit of improvement to the 4
environment, including a nutrient or carbon benefit. 5
(4) “Environmental outcomes project” means a project designed to secure 6
environmental outcomes. 7
(5) “Evaluator” means a person other than an aggregator that determines 8
whether environmental outcomes have been achieved based on defined performance 9
measures. 10
(6) “Outcome payment” means the money paid when a pay –for–success 11
contract performance measure is met. 12
(7) “Quantification plan” means a plan in which an aggregator describes: 13
(i) the method that will be used to measure or model environmental 14
outcomes and co–benefits under a pay–for–success contract; 15
(ii) the compliance monitoring that will occur to ensure that the 16
actions proposed in the pay–for–success contract are taken and maintained over the life of 17
the project; 18
(iii) verification steps that will be carried out by the State to confirm 19
model results or accurate measurement of environmental outcomes; and 20
(iv) the timeline for proposed payments under the pay–for–success 21
contract. 22
(b) The General Assembly finds and declares that: 23
(1) pay–for–success contracting shifts the risk of performance to the 24
contractor because government payment is made only on achievement of outcomes; 25
(2) social and environmental impact investment is growing dramatically, 26
and investors are seeking ways to finance and execute pay–for–success contracts in the 27
State to expand the success of Chesapeake Bay restoration efforts and achieve other public 28
outcomes; and 29
(3) it is in the best interest of the State to include pay–for–success 30
contracting as a procurement option, particularly for units responsible for land 31
conservation and environmental protection, enhancement, and restoration. 32
HOUSE BILL 500 17
(c) A unit may enter into a pay–for–success contract only if the procurement 1
officer of the unit determines that: 2
(1) the contract will produce estimated financial savings or other 3
quantifiable public benefits for the State; and 4
(2) a substantial portion of the outcome payment due under the contract 5
will be paid only after specific outcomes have been documented. 6
(d) (1) This subsection applies only to procurements by: 7
(i) the Department of Agriculture; 8
(ii) the Department of the Environment; 9
(iii) the Department of Natural Resources; 10
(iv) the Department of Transportation; 11
(v) the Maryland Environmental Service; and 12
(vi) the Department of General Services. 13
(2) This subsection does not apply to the purchase of nitrogen load 14
reductions with funds from the Clean Water Commerce Account of the Bay Restoration 15
Fund established under § 9–1605.2 of the Environment Article. 16
(3) (i) A unit specified in paragraph (1) of this subsection may enter into 17
a pay–for–success contract with an aggregator to procure: 18
1. delivery of an environmental outcomes project; or 19
2. already certified environmental outcomes. 20
(ii) Other State and local entities may participate in a 21
pay–for–success contract under this subsection in accordance with an intergovernmental 22
cooperative purchasing agreement under § 13–110 of this subtitle. 23
(4) A pay–for–success contract executed under this subsection shall 24
include: 25
(i) a quantification plan approved by the unit; 26
(ii) a statement of the environmental outcomes to be procured under 27
the contract and a description of how defined performance measures will demonstrate 28
progress in achieving these outcomes; 29
18 HOUSE BILL 500
(iii) requirements regarding the content and frequency of progress 1
reports regarding the achievement of environmental outcomes; 2
(iv) a methodology for calculating the amount and timing of outcome 3
payments to an aggregator when the evaluator determines that the aggregator has 4
achieved a defined performance measure; 5
(v) a statement that the basis of payment is the determination of 6
achievement of environmental outcomes by the evaluator and that payments for those 7
outcomes do not require itemized billing or cost documentation by the aggregator; and 8
(vi) terms addressing: 9
1. compliance with State law; 10
2. nondiscrimination in employment; 11
3. contractor indemnification; 12
4. termination for default; and 13
5. the unit’s right to inspect the environmental outcomes 14
project. 15
(5) A pay–for–success contract executed under this subsection may include 16
provisions regarding: 17
(i) long–term maintenance and monitoring of environmental 18
services, including the establishment of a stewardship fund; 19
(ii) a requirement that the unit hold contract funds in a reserve 20
account for outcome payments; 21
(iii) for agriculture services, payment for achievement of baseline 22
water quality requirements for nitrogen, phosphorus, or sediment; or 23
(iv) terminations prior to the first payment under the contract for the 24
purpose of selling environmental outcomes without penalty to another entity or for any 25
other reason. 26
(e) (1) (i) Beginning July 2025 and every 3 years thereafter, the Maryland 27
Environmental Service shall review and evaluate the results of all pay–for–success 28
contracts completed under this section for the previous 3 fiscal years. 29
(ii) The first review conducted under subparagraph (i) of this 30
paragraph shall include a review of all pay–for–success contracts completed under this 31
section between July 1, 2022, and June 30, 2025. 32 HOUSE BILL 500 19
(2) The review conducted under paragraph (1) of this subsection shall 1
include: 2
(i) the cost of each project performed under a contract; 3
(ii) the length of time taken to complete the project, from the date of 4
notice to proceed until completion; 5
(iii) the average cost and project duration for each project type; and 6
(iv) whether each project met the terms of its contract. 7
(3) Each unit that enters into a pay–for–success contract under this section 8
shall execute an agreement with the Maryland Environmental Service to reimburse the 9
Service for each of the unit’s completed contracts the Service reviews under this section. 10
(4) The Maryland Environmental Service shall provide copies of each 11
review conducted under this subsection to: 12
(i) each unit for which the Service reviewed and evaluated a 13
contract; and 14
(ii) in accordance with § 2–1257 of the State Government Article, the 15
Senate Education, Health, and Environmental Affairs Committee, the Senate Budget and 16
Taxation Committee, the House Environment and Transportation Committee, and the 17
House Appropriations Committee.] 18
13–113. 19
(d) (1) THIS SUBSECTION DOES NOT APPLY TO A TASK ORDER 20
DESIGNATED AS A SMAL L BUSINESS RESERVE I N ACCORDANCE WITH § 14–502 OF 21
THIS ARTICLE. 22
(2) Except as provided in subsection (f) of this section, if the unit of the 23
Executive Branch expects that the total cost of the services, supplies, or commodities will 24
exceed [$100,000] $500,000, the unit shall issue a solicitation for a task order to all master 25
contractors in the appropriate category established by the designated procurement unit. 26
[(2)] (3) If the unit of the Executive Branch expects that the total cost of 27
the services, supplies, or commodities will [be] EXCEED $100,000 [or less] BUT WILL NOT 28
EXCEED $500,000, the unit shall issue a solicitation for a task order to a minimum of six 29
qualified master contractors or all master contractors, whichever is less, in the appropriate 30
category established by the designated procurement unit. 31
20 HOUSE BILL 500
(4) IF THE UNIT OF THE EXECUTIVE BRANCH EXPECTS THAT T HE 1
TOTAL COST OF THE SERVICES , SUPPLIES, OR COMMODITIES WILL BE $100,000 OR 2
LESS, THE UNIT SHALL ISSUE A SOLICITATION FOR A TASK ORDER TO A MINI MUM OF 3
THREE QUALIFIED MAST ER CONTRACTORS OR AL L MASTER CONTRACTORS , 4
WHICHEVER IS FEWER , IN THE APPROPRIATE C ATEGORY ESTABL ISHED BY THE 5
DESIGNATED PROCUREME NT UNIT. 6
(e) (1) Except as provided in subsection (f) of this section, after a unit of the 7
Executive Branch receives responses from master contractors to a solicitation for a task 8
order, the unit shall evaluate the responses and may select a master contractor based on 9
the response that is determined to be the most advantageous to the State considering the 10
evaluation factors set forth in the task order. 11
(2) EXCEPT AS PROVIDED IN PARAGRAPH (3) OF THIS SUBSECTION , 12
ORAL PRE SENTATIONS ARE REQUI RED PRIOR TO SELECTI NG A MASTER 13
CONTRACTOR WHEN : 14
(I) THE TOTAL VALUE OF T HE TASK ORDER IS EXP ECTED TO 15
EXCEED $2,000,000 FOR ARCHITECTURAL AN D ENGINEERING SERVIC ES; 16
(II) THE TOTAL VALUE OF T HE TASK ORDER IS EXP ECTED TO 17
EXCEED $10,000,000 FOR CONSTRUCTION AND CONSTRUCTION RELATED SERVICES; 18
OR 19
(III) FOR ALL OTHER PROCUR EMENT, INCLUDING INFORMATIO N 20
TECHNOLOGY AND PROFE SSIONAL SERVICES , WHEN THE TOTAL VALUE OF THE TASK 21
ORDER IS EXPECTED TO EXCEED $5,000,000. 22
(3) IF THE PROCUREM ENT OFFICER MAKES A WRITTEN 23
DETERMINATION THAT O RAL PRESENTATIONS AR E UNLIKELY TO AID IN THE 24
EVALUATION PROCESS , ORAL PRESENTATIONS W ILL NOT BE REQUIRED . 25
(f) The requirements of subsections (c)(2), (d), and [(e)] (E)(1) of this section do 26
not apply to a master contract for construction if the master contract: 27
(1) is awarded through a competitive process in accordance with this 28
subtitle; and 29
(2) states: 30
(i) how task orders will be awarded; and 31
(ii) the maximum number of qualified contractors that will be 32
awarded a master contract for construction. 33
HOUSE BILL 500 21
13–206. 1
(b) If, with the approval of the [Board] CHIEF PROCUREMENT OFFICER OR 2
THE CHIEF PROCUREMENT OFFICER’S DESIGNEE, a unit determines that it is fiscally 3
advantageous or otherwise in the best interests of the State, the unit may: 4
(1) cancel an invitation for bids, a request for proposals, or other 5
solicitation; or 6
(2) reject all bids or proposals. 7
13–207. 8
(a) Except as otherwise provided in this section, a procurement officer may not 9
require a bidder or offeror to provide bid security on a procurement contract if the 10
procurement officer expects the price to be [$100,000 or] less THAN OR EQUAL TO THE 11
SMALL PROCUREMENT AM OUNT SPECIFIED IN § 13–109 OF THIS TITLE. 12
(b) (1) A procurement officer shall require a bidder or offeror to provide bid 13
security on a procurement contract for construction if: 14
(i) the price is expected to exceed [$100,000] THE SMALL 15
PROCUREMENT AMOUNT S PECIFIED IN § 13–109 OF THIS TITLE; or 16
(ii) [the price is expected to be $100,000 or less but] REQUIRED BY 17
federal law or a condition of federal assistance requires the security. 18
(2) The amount of bid security required for a procurement contract for 19
construction shall be: 20
(i) at least 5% of the bid or price proposal; or 21
(ii) if the bid or price proposal states a rate but not a total price, an 22
amount determined by the procurement officer. 23
(c) (1) A procurement officer may require a bidder or offeror to provide bid 24
security on a procurement contract for services, supplies, or construction related services if 25
the price of the procurement contract is expected to exceed [$50,000] THE SMALL 26
PROCUREMENT AMOUNT S PECIFIED IN § 13–109 OF THIS TITLE. 27
13–216. 28
(a) Except as provided in subsection (b) of this section, a procurement officer may 29
not require a contractor to provide a performance bond, payment bond, or other security on 30
a procurement contract for construction, construction related services, services, or supplies 31 22 HOUSE BILL 500
if the price of the procurement contract is [$100,000 or] less THAN OR EQUAL TO THE 1
SMALL PROCUREMENT AM OUNT SPECIFIED IN § 13–109 OF THIS TITLE. 2
(b) A procurement officer shall require a contractor to provide a performance 3
bond, payment bond, or other security if federal law or a condition of federal assistance 4
requires the security. 5
(c) If the price of a procurement contract for construction exceeds [$100,000] THE 6
SMALL PROCUREMENT AM OUNT SPECIFIED IN § 13–109 OF THIS TITLE FOR 7
CONSTRUCTION , a procurement officer shall require a contractor to provide security as 8
required under Title 17, Subtitle 1 of this article. 9
(d) A procurement officer may require a contractor to provide a performance bond 10
or other security on a procurement contract for supplies, services, or construction related 11
services if: 12
(1) circumstances warrant security; and 13
(2) the price of the procurement contract exceeds [$100,000] THE SMALL 14
PROCUREMENT AMOUNT S PECIFIED IN § 13–109 OF THIS TITLE. 15
(e) (1) The Board shall adopt regulations to establish separate surety bond 16
forms for procurement officers to use to require security for: 17
(i) fixed–price contracts; and 18
(ii) multiyear contracts. 19
(2) The form for multiyear contracts shall provide for annual and 20
renewable contracts. 21
13–228. 22
(A) (1) IN THIS SECTION THE FOLLOWING WO RDS HAVE THE MEANING S 23
INDICATED. 24
(2) “AGGREGATOR ” MEANS A PERSON THAT : 25
(I) PROVIDES OR CONTRACT S FOR ENVIRONMENTAL 26
OUTCOMES; OR 27
(II) PROVIDES OR RAISES C APITAL TO FINANCE DE LIVERY OF 28
ENVIRONMENTAL OUTCOM ES. 29
HOUSE BILL 500 23
(3) “ENVIRONMENTAL OUTCOME ” MEANS A COMMODITY TH AT IS 1
MODELED OR DIRECTLY MEASURED AS A SINGLE , QUANTIFIABLE , AND CERTIFIED 2
UNIT OF IMPROVEMENT TO THE ENVIRONMENT , INCLUDING A NUTRIENT OR 3
CARBON BENEFIT . 4
(4) “ENVIRONMENTAL OUTCOME S PROJECT” MEANS A PROJECT 5
DESIGNED TO SECURE E NVIRONMENTAL OUTCOME S. 6
(5) “EVALUATOR” MEANS A PERSON OTHER THAN AN AGGREGATOR 7
THAT DETERMINES WHET HER ENVIRONMENTAL OU TCOMES HAVE BEEN ACH IEVED 8
BASED ON DEFINED PER FORMANCE MEASURES . 9
(6) “OUTCOME PAYMENT ” MEANS THE MONEY PAID WHEN A 10
PAY–FOR–SUCCESS CONTRACT PER FORMANCE MEASURE IS MET. 11
(7) “QUANTIFICATION PLAN ” MEANS A PLAN IN WHIC H AN 12
AGGREGATOR DESCRIBES : 13
(I) THE METHOD THAT WILL BE USED TO MEASURE O R MODEL 14
ENVIRONMENTAL OUTCOM ES AND CO –BENEFITS UNDER A PAY –FOR–SUCCESS 15
CONTRACT; 16
(II) THE COMPLIANCE MONIT ORING THAT WILL OCCU R TO 17
ENSURE THAT THE ACTI ONS PROPOSED IN THE PAY–FOR–SUCCESS CONTRACT ARE 18
TAKEN AND MAINTAINED OVER THE LIFE OF THE PROJECT; 19
(III) VERIFICATION STEPS T HAT WILL BE CARRIED OUT BY THE 20
STATE TO CO NFIRM MODEL RESULTS OR ACCURATE MEASUREM ENT OF 21
ENVIRONMENTAL OUTCOM ES; AND 22
(IV) THE TIMELINE FOR PRO POSED PAYMENTS UNDER THE 23
PAY–FOR–SUCCESS CONTRACT . 24
(B) THE GENERAL ASSEMBLY FINDS AND DE CLARES THAT: 25
(1) PAY–FOR–SUCCESS CONTRACTING SHIFTS THE RI SK OF 26
PERFORMANCE TO THE C ONTRACTOR BECAUSE GO VERNMENT PAYMENT IS MADE 27
ONLY ON ACHIEVEMENT OF OUTCOMES ; 28
(2) SOCIAL AND ENVIRONME NTAL IMPACT INVESTME NT IS GROWING 29
DRAMATICALLY , AND INVESTORS ARE SE EKING WAYS TO FINANC E AND EXECUTE 30
PAY–FOR–SUCCESS CONTRAC TS IN THE STATE TO EXPAND THE S UCCESS OF 31 24 HOUSE BILL 500
CHESAPEAKE BAY RESTORATION EFFOR TS AND ACHIEVE OTHER PUBLIC 1
OUTCOMES; AND 2
(3) IT IS IN THE BEST IN TEREST OF THE STATE TO INCLUDE 3
PAY–FOR–SUCCESS CONTRACTING AS A CONTRACTING OPT ION, PARTICULARLY FOR 4
UNITS RESPONSIBLE FOR LAND CONSERVATION AND ENV IRONMENTAL 5
PROTECTION , ENHANCEMENT , AND RESTORATION . 6
(C) A UNIT MAY ENTER INTO A PAY–FOR–SUCCESS CONTRACT ONL Y IF THE 7
PROCUREMENT OFFICER OF THE UNIT DETERMIN ES THAT: 8
(1) THE CONTRACT WILL PR ODUCE ESTIMATED FIN ANCIAL SAVINGS 9
OR OTHER QUANTIFIABL E PUBLIC BENEFITS FO R THE STATE; AND 10
(2) A SUBSTANTIAL PORTIO N OF THE OUTCOME PAY MENT DUE UNDER 11
THE CONTRACT WILL BE PAID ONLY AFTER SPEC IFIC OUTCOMES HAVE B EEN 12
DOCUMENTED . 13
(D) (1) THIS SUBSECTION APPLI ES ONLY TO CON TRACTS BY: 14
(I) THE DEPARTMENT OF AGRICULTURE ; 15
(II) THE DEPARTMENT OF THE ENVIRONMENT ; 16
(III) THE DEPARTMENT OF NATURAL RESOURCES; 17
(IV) THE DEPARTMENT OF TRANSPORTATION ; 18
(V) THE MARYLAND ENVIRONMENTAL SERVICE; AND 19
(VI) THE DEPARTMENT OF GENERAL SERVICES. 20
(2) THIS SUBSECTION DOES NOT APPLY TO THE PUR CHASE OF 21
NITROGEN LOAD REDUCT IONS WITH FUNDS FROM THE CLEAN WATER COMMERCE 22
ACCOUNT OF THE BAY RESTORATION FUND ESTABLISHED UNDE R § 9–1605.2 OF 23
THE ENVIRONMENT ARTICLE. 24
(3) (I) A UNIT SPECIFIED IN PARAGRAP H (1) OF THIS SUBSECTION 25
MAY ENTER INTO A PAY –FOR–SUCCESS CONTRACT WIT H AN AGGREGATOR TO 26
PURCHASE: 27
1. DELIVERY OF AN ENVIR ONMENTAL OUTCOMES 28
PROJECT; OR 29 HOUSE BILL 500 25
2. ALREADY CERTIFIED EN VIRONMENTAL OUTCOMES . 1
(II) OTHER STATE AND LOCAL ENTITIES MAY P ARTICIPATE IN A 2
PAY–FOR–SUCCESS CONTRACT UND ER THIS SUBSECTION I N ACCORDANCE WITH AN 3
INTERGOVERNMENTAL CO OPERATIVE PURCHASING AGREEMENT UNDER § 13–110 4
OF THIS TITLE. 5
(4) A PAY–FOR–SUCCESS CONTRACT EXE CUTED UNDER THIS 6
SUBSECTION SHALL INCLUDE: 7
(I) A QUANTIFICATION PLA N APPROVED BY THE UN IT; 8
(II) A STATEMENT OF THE E NVIRONMENTAL OUTCOME S TO BE 9
PROCURED UNDER THE C ONTRACT AND A DESCRI PTION OF HOW DEFINED 10
PERFORMANCE MEASURES WILL DEMONSTRATE PRO GRESS IN ACHIEVING T HESE 11
OUTCOMES; 12
(III) REQUIREMENTS REGARDI NG THE CONTENT AND 13
FREQUENCY OF PROGRES S REPORTS REGARDING THE ACHIEVEMENT OF 14
ENVIRONMENTAL OUTCOM ES; 15
(IV) A METHODOLOGY FOR CA LCULATING THE AMOUNT AND 16
TIMING OF OUTCOME PA YMENTS TO AN AGGREGA TOR WHEN THE EVALUAT OR 17
DETERMINES THAT THE AGGREGA TOR HAS ACHIEVED A D EFINED PERFORMANCE 18
MEASURE; 19
(V) A STATEMENT THAT THE BASIS OF PAYMENT IS THE 20
DETERMINATION OF ACH IEVEMENT OF ENVIRONM ENTAL OUTCOMES BY TH E 21
EVALUATOR AND THAT P AYMENTS FOR THOSE OU TCOMES DO NOT REQUIR E 22
ITEMIZED BILLING OR COST DOCUME NTATION BY THE AGGRE GATOR; AND 23
(VI) TERMS ADDRESSING : 24
1. COMPLIANCE WITH STATE LAW; 25
2. NONDISCRIMINATION IN EMPLOYMENT ; 26
3. CONTRACTOR INDEMNIFI CATION; 27
4. TERMINATION FOR DEFA ULT; AND 28
26 HOUSE BILL 500
5. THE UNIT’S RIGHT TO INSPECT THE ENVIRONM ENTAL 1
OUTCOMES PROJECT . 2
(5) A PAY–FOR–SUCCESS CONTRACT EXE CUTED UNDER THIS 3
SUBSECTION MAY INCLU DE PROVISIONS REGARD ING: 4
(I) LONG–TERM MAINTENANCE AND MONITORING OF 5
ENVIRONMENTAL SERVIC ES, INCLUDING THE ESTABL ISHMENT OF A STEWARD SHIP 6
FUND; 7
(II) A REQUIREMENT THAT T HE UNIT HOLD CONTRAC T FUNDS 8
IN A RESERVE ACCOUNT FOR OUTCOME PAYMENTS ; 9
(III) FOR AGRICULTURE SERV ICES, PAYMENT FOR 10
ACHIEVEMENT OF BASEL INE WATER QUALITY RE QUIREMENTS FOR NITRO GEN, 11
PHOSPHORUS , OR SEDIMENT; OR 12
(IV) TERMINATIONS PRIOR T O THE FIRST PAYMENT UNDER THE 13
CONTRACT FOR THE PUR POSE OF SELLING ENVI RONMENTAL OUTCOMES W ITHOUT 14
PENALTY TO ANOTHER E NTITY OR FOR ANY OTH ER REASON. 15
(E) (1) BEGINNING JULY 2025 AND EVERY 3 YEARS THEREAFTER , THE 16
MARYLAND ENVIRONMENT AL SERVICE SHALL REVIEW AND EVALUATE THE 17
RESULTS OF ALL PAY –FOR–SUCCESS CONTRACTS CO MPLETED UNDER THIS S ECTION 18
FOR THE PREVIOUS 3 FISCAL YEARS. 19
(2) THE REVIEW CONDUCTED UNDER PARAGRAPH (1) OF THIS 20
SUBSECTION SHALL INC LUDE: 21
(I) THE COST OF EACH PRO JECT PERFORMED UNDER A 22
CONTRACT; 23
(II) THE LENGTH OF TIME T AKEN TO COMPLETE THE PROJECT, 24
FROM THE DATE OF NOT ICE TO PROCEED UNTIL COMPLETION ; 25
(III) THE AVERAGE COST AND PROJECT DURATION FOR EACH 26
PROJECT TYPE ; AND 27
(IV) WHETHER EACH PROJECT MET THE TERMS OF ITS 28
CONTRACT. 29
(3) EACH UNIT THAT ENTERS INTO A PAY–FOR–SUCCESS CONTRACT 30
UNDER THIS SECTION S HALL EXECUTE AN AGRE EMENT WITH THE MARYLAND 31 HOUSE BILL 500 27
ENVIRONMENTAL SERVICE TO REIMBURSE THE MARYLAND ENVIRONMENTAL 1
SERVICE FOR EACH OF T HE UNIT’S COMPLETED CONTR ACTS THE MARYLAND 2
ENVIRONMENTAL SERVICE REVIEWS UNDER THIS SECTION. 3
(4) THE MARYLAND ENVIRONMENTAL SERVICE SHALL PROVIDE 4
COPIES OF EACH REVIE W CONDUCTED UNDER TH IS SUBSECTION TO : 5
(I) EACH UNIT FOR WHICH THE MARYLAND ENVIRONMENTAL 6
SERVICE REVIEWED AND EVALUATED A CONT RACT; AND 7
(II) IN ACCORDANCE WITH § 2–1257 OF THE STATE 8
GOVERNMENT ARTICLE, THE SENATE COMMITTEE ON EDUCATION, ENERGY, AND 9
THE ENVIRONMENT , THE SENATE BUDGET AND TAXATION COMMITTEE, THE 10
HOUSE ENVIRONMENT AND TRANSPORTATION COMMITTEE, AND THE HOUSE 11
APPROPRIATIONS COMMITTEE. 12
13–229. 13
(A) BEFORE A UNIT AWARDS ANY PROCUREMENT CONT RACT FOR AN 14
AMOUNT ABOVE $500,000, THE RECOMMENDED AWAR DEE MAY BE REQUIRED TO 15
SUBMIT A WORKFORCE D IVERSITY PLAN TO THE PROCUREMENT OFFICER . 16
(B) BEFORE A UNI T AWARDS ANY PROCURE MENT CONTRACT FOR AN 17
AMOUNT ABOVE $250,000, THE RECOMMENDED AWAR DEE MAY BE REQUIRED TO 18
SUBMIT A SUPPLIER DI VERSITY PLAN TO THE PROCUREMENT OFFICER . 19
(C) THE GOVERNOR’S OFFICE OF SMALL, MINORITY, AND WOMEN 20
BUSINESS AFFAIRS IN CONSULTATI ON WITH THE OFFICE OF STATE PROCUREMENT 21
SHALL ADOPT REGULATI ONS TO CARRY OUT THI S SECTION THAT INCLU DE: 22
(1) SUGGESTED CONTENT TO BE INCLUDED IN A WOR KFORCE OR 23
SUPPLIER DIVERSITY P LAN; AND 24
(2) GUIDANCE FOR UNITS T O COMPLY WITH THE RE QUIREMENTS OF 25
THIS SECTION. 26
14–106. 27
(a) In this section, “Committee” means the Pricing and Selection Committee for 28
Preferred Providers. 29
(b) There is a Pricing and Selection Committee for Preferred Providers. 30
(c) The Committee consists of the following [5] 6 members: 31 28 HOUSE BILL 500
(1) the Secretary of Transportation or a designee; 1
(2) the [Secretary of General Services] CHIEF PROCUREMENT OFFICER 2
or a designee; 3
(3) the Secretary of Public Safety and Correctional Services or a designee; 4
(4) the Assistant Secretary for Vocational Rehabilitation within the State 5
Department of Education or a designee; [and] 6
(5) the Secretary of Labor or a designee; AND 7
(6) THE SPECIAL SECRETARY FOR THE OFFICE OF SMALL, 8
MINORITY, AND WOMEN BUSINESS AFFAIRS OR A DESIGNEE . 9
14–108. 10
(b) There is an Employment Works Program in the [Department of General 11
Services] GOVERNOR’S OFFICE OF SMALL, MINORITY, AND WOMEN BUSINESS 12
AFFAIRS. 13
(c) The SPECIAL Secretary [of General Services] FOR THE OFFICE OF SMALL, 14
MINORITY, AND WOMEN BUSINESS AFFAIRS shall designate Maryland Works, Inc., or 15
another appropriate coordinating entity, to facilitate the distribution of procurement 16
contracts for supplies and services among community service providers and individual with 17
disability owned businesses. 18
14–203. 19
(a) By regulation, the [Board] SPECIAL SECRETARY FOR THE OFFICE OF 20
SMALL, MINORITY, AND WOMEN BUSINESS AFFAIRS shall specify the criteria that a 21
business must meet to qualify as a small business. 22
14–204. 23
The [Board] SPECIAL SECRETARY FOR THE OFFICE OF SMALL, MINORITY, 24
AND WOMEN BUSINESS AFFAIRS shall adopt regulations to establish procedures for: 25
(1) compiling and maintaining a comprehensive bidder’s list of small 26
businesses; 27
(2) locating potential sources for various construction related services, 28
supplies, and services and affirmatively seeking to locate potential minority business 29
enterprise sources for those construction related services, supplies, and services; 30
HOUSE BILL 500 29
(3) helping small businesses to comply with the procedures for bidding on 1
procurement contracts; 2
(4) examining requests for construction related services, supplies, and 3
services to determine when an invitation for bids may be designated for the Small Business 4
Preference Program; 5
(5) bidding for a procurement contract designated for a small business 6
preference; 7
(6) simplifying procurement specifications and terms, to increase the 8
opportunities for small business participation; 9
(7) investigating the responsibility of bidders on small business 10
preferences; and 11
(8) explaining to a small business the reason for which its bid for a small 12
business preference was rejected. 13
14–205. 14
The Department of Commerce shall help the [Board] SPECIAL SECRETARY FOR 15
THE OFFICE OF SMALL, MINORITY, AND WOMEN BUSINESS AFFAIRS in establishing 16
procedures to carry out § 14–204(1) and (2) of this subtitle. 17
14–302. 18
(a) (1) (ii) 1. The overall percentage goal shall be established on a 19
biennial basis by the Special Secretary for the Office of Small, Minority, and Women 20
Business Affairs, in consultation with the Secretary of Transportation, THE CHIEF 21
PROCUREMENT OFFICER, and the Attorney General. 22
(iii) 1. In consultation with the Secretary of Transportation, THE 23
CHIEF PROCUREMENT OFFICER, and the Attorney General, the Special Secretary for 24
the Office of Small, Minority, and Women Business Affairs shall establish guidelines on a 25
biennial basis for each unit to consider while determining whether to set subgoals for the 26
minority groups listed in § 14–301(k)(1)(i)1, 2, 3, 4, and 6 of this subtitle. 27
(iv) 1. The Special Secretary for the Office of Small, Minority, 28
and Women Business Affairs, in consultation with the Secretary of Transportation, THE 29
CHIEF PROCUREMENT OFFICER, and the Attorney General, shall establish goals and 30
subgoal guidelines that, to the maximum extent feasible, approximate the level of minority 31
business enterprise participation that would be expected in the absence of discrimination. 32
(2) The Special Secretary for the Office of Small, Minority, and Women 33
Business Affairs, in consultation with the Secretary of Transportation, THE CHIEF 34 30 HOUSE BILL 500
PROCUREMENT OFFICER, and the Attorney General, shall establish guidelines for each 1
unit to consider when determining the appropriate minority business enterprise 2
participation percentage goal for a procurement contract in accordance with paragraph (3) 3
of this subsection. 4
(8) A UNIT MAY CONSIDER AD DING OR INCREASING T HE MINORITY 5
BUSINESS PARTICIPATI ON GOAL ON A PROCURE MENT CONTRACT : 6
(I) AT ANY TIME PRIOR TO CONTRACT EXECUTION ; 7
(II) AFTER CONTRACT EXECU TION, WHEN DETERMINED TO B E 8
IN THE BEST INTEREST OF THE STATE; OR 9
(III) WHEN THE MINORITY BU SINESS ENTERPRISE 10
PARTICIPATION SCHEDU LE HAS BEEN CREATED OR AMENDED . 11
[(8)] (9) The Special Secretary for the Office of Small, Minority, and 12
Women Business Affairs shall: 13
(i) in consultation with the Secretary of Transportation, THE 14
CHIEF PROCUREMENT OFFICER, and the Attorney General, establish procedures 15
governing how the participation of minority business enterprise prime contractors is 16
counted toward contract goals; and 17
(ii) notwithstanding § 12–101 of this article, adopt regulations 18
setting forth the procedures established in accordance with this paragraph. 19
[(9)] (10) (i) 1. If a contractor, including a certified minority 20
business enterprise, does not achieve all or a part of the minority business enterprise 21
participation goals on a contract, the unit shall make a finding of whether the contractor 22
has demonstrated that the contractor took all necessary and reasonable steps to achieve 23
the goals, including compliance with paragraph (7) of this subsection. 24
2. A waiver of any part of the minority business enterprise 25
goals for a contract shall be granted if a contractor provides a reasonable demonstration of 26
good–faith efforts to achieve the goals. 27
(ii) If the unit determines that a waiver should be granted in 28
accordance with subparagraph (i) of this paragraph, the unit may not require the contractor 29
to renegotiate any subcontract in order to achieve a different result. 30
(iii) The head of the unit may waive any of the requirements of this 31
subsection relating to the establishment, use, and waiver of contract goals for a sole source, 32
expedited, or emergency procurement in which the public interest cannot reasonably 33
accommodate use of those requirements. 34
HOUSE BILL 500 31
(iv) 1. Except for waivers granted in accordance with 1
subparagraph (iii) of this paragraph, when a waiver determination is made, the unit shall 2
issue the determination in writing. 3
2. The head of the unit shall: 4
A. keep one copy of the waiver determination and the reasons 5
for the determination; and 6
B. forward one copy of the waiver determination to the 7
Governor’s Office of Small, Minority, and Women Business Affairs. 8
(v) On or before July 31 of each year, each unit shall submit directly 9
to the Board of Public Works and the Governor’s Office of Small, Minority, and Women 10
Business Affairs an annual report of waivers requested and waivers granted under this 11
paragraph. 12
(vi) The report required under subparagraph (v) of this paragraph 13
shall contain the following information on those contracts where the unit considered a 14
contractor’s request for waiver of all or a portion of the minority business enterprise goals: 15
1. the contract titles, numbers, and dates; 16
2. the number of waiver requests received; 17
3. the number of waiver requests granted; and 18
4. any other information specifically requested by the Board. 19
[(10)] (11) (i) [1.] This paragraph applies to a bidder or offeror after 20
submission of a bid or proposal and before the execution of a contract with an expected 21
degree of minority business enterprise participation. 22
[2. If the bidder or offeror determines that a minority 23
business enterprise identified in the minority business enterprise participation schedule 24
has become or will become unavailable or ineligible to perform the work required under the 25
contract, the bidder or offeror shall notify the unit within 72 hours of making the 26
determination.] 27
[(ii) 1. If a minority business enterprise identified in the minority 28
business enterprise participation schedule submitted with a bid or offer has become or will 29
become unavailable or ineligible to perform the work required under the contract, the 30
bidder or offeror may submit a written request with the unit to amend the minority 31
business enterprise participation schedule. 32
2. The request to amend the minority business enterprise 33
participation schedule shall indicate the bidder’s or offeror’s efforts to substitute another 34 32 HOUSE BILL 500
certified minority business enterprise to perform the work that the unavailable or ineligible 1
minority business enterprise would have performed. 2
(iii) A minority business enterprise participation schedule may not 3
be amended unless: 4
1. the bidder or offeror provides a satisfactory explanation of 5
the reason for inclusion of the unavailable or ineligible firm on the minority business 6
enterprise participation schedule; and 7
2. the amendment is approved by the unit’s procurement 8
officer after consulting with the unit’s minority business enterprise liaison.] 9
(II) 1. IF A UNIT’S PROCUREMENT OFFICE R DETERMINES 10
THAT A DEFICIENCY EX ISTS IN THE MINORITY BUSINESS ENTERPRISE 11
PARTICIPATION SCHEDU LE, THE PROCUREMENT OFFI CER SHALL NOTIFY THE 12
BIDDER OR OFFEROR OF THE DEFICIENCY AND R EQUIRE THE BIDDER OR OFFEROR 13
TO SUBMIT AN AMEN DED MINORITY BUSINES S ENTERPRISE PARTICI PATION 14
SCHEDULE WITHIN A RE ASONABLE TIME PERIOD . 15
2. A DETERMINATION UNDER SUBSUBPARAGRAPH 1 OF 16
THIS SUBPARAGRAPH SH ALL BE MADE IN CONSU LTATION WITH THE UNI T’S 17
MINORITY BUSINESS EN TERPRISE LIAISON . 18
3. AS DIRECTED BY THE NOTIFI CATION MADE UNDER 19
SUBSUBPARAGRAPH 1 OF THIS SUBPARAGRAPH , THE BIDDER OR OFFERO R SHALL 20
SUBMIT AN AMENDED MI NORITY BUSINESS ENTE RPRISE PARTICIPATION SCHEDULE 21
CORRECTING THE DEFIC IENCY IDENTIFIED . 22
[(11)] (12) (i) This paragraph applies after execution of a contract with 23
an expected degree of minority business enterprise participation. 24
(ii) The minority business enterprise participation schedule, 25
including any amendment, shall be attached to and made a part of the executed contract. 26
(iii) 1. A. Except as provided in subsubsubparagraph B of this 27
subsubparagraph, for purposes of this subparagraph, good cause for removal of a certified 28
minority business enterprise after contract execution includes documented 29
nonperformance by the minority business enterprise or election by the certified minority 30
business enterprise to cease work on the contract. 31
B. Failure of a certified minority business enterprise to 32
provide a bond requested by a contractor in violation of § 13–227 of this article may not be 33
considered nonperformance by the minority business enterprise. 34
HOUSE BILL 500 33
2. A contractor may not terminate or otherwise cancel the 1
contract of a certified minority business enterprise subcontractor listed in the minority 2
business enterprise participation schedule without showing good cause and obtaining the 3
prior written consent of the minority business enterprise liaison and approval of the head 4
of the unit. 5
3. The unit shall send a copy of the written consent obtained 6
under subsubparagraph 2 of this subparagraph to the Governor’s Office of Small, Minority, 7
and Women Business Affairs. 8
(iv) A minority business enterprise participation schedule may [not] 9
be amended TO ADD TO OR INCREAS E MINORITY BUSINESS ENTERPRISE 10
PARTICIPATION after the date of contract execution [unless the request is] ONLY IF: 11
1. IT IS IN THE BEST INTEREST OF THE STATE; 12
2. IT IS approved by the head of the unit; and 13
3. the contract is amended. 14
[(12)] (13) If, during the performance of a contract, a certified minority 15
business enterprise contractor or subcontractor becomes ineligible to participate in the 16
Minority Business Enterprise Program because one or more of its owners has a personal 17
net worth that exceeds the amount specified in § 14–301(k)(3) of this subtitle: 18
(i) that ineligibility alone may not cause the termination of the 19
certified minority business enterprise’s contractual relationship for the remainder of the 20
term of the contract; and 21
(ii) the certified minority business enterprise’s participation under 22
the contract shall continue to be counted toward the program and contract goals. 23
[(13)] (14) (i) Except as provided in subparagraph (ii) of this paragraph, 24
a nonprofit entity participating as a minority business enterprise on a procurement 25
contract awarded by a unit before July 1, 2015, may continue to participate in the contract 26
until the contract expires or otherwise terminates, including all options, renewals, and 27
other extensions. 28
(ii) 1. The nonprofit entity’s participation may not be counted 29
toward achieving the minority business enterprise participation goals in this subsection. 30
2. The unit may not require that a certified minority 31
business enterprise be substituted for the nonprofit entity in order to meet the minority 32
business enterprise goals for the procurement contract. 33
34 HOUSE BILL 500
[(14)] (15) (i) For purposes of this paragraph and paragraph [(15)] (16) 1
of this subsection, “regular dealer”: 2
1. means a firm that owns, operates, or maintains a store, a 3
warehouse, or any other establishment in which the materials, supplies, articles, or 4
equipment are of the general character described by the specifications required under the 5
contract and are bought, kept in stock, or regularly sold or leased to the public in the usual 6
course of business; and 7
2. does not include a packager, a broker, a manufacturer’s 8
representative, or any other person that arranges or expedites transactions. 9
(ii) A unit may apply only 60% of the costs of the materials and 10
supplies provided by the certified minority business enterprise if the certified minority 11
business enterprise is a regular dealer for purposes of achieving the minority business 12
enterprise contract goal. 13
[(15)] (16) With respect to materials or supplies purchased from a certified 14
minority business enterprise that is neither a manufacturer nor a regular dealer: 15
(i) a unit may apply the entire amount of fees or commissions 16
charged for assistance in the procurement of the materials and supplies, fees, or 17
transportation charges for the delivery of materials and supplies required on a procurement 18
toward minority business enterprise contract goals, provided a unit determines the fees to 19
be reasonable and not excessive as compared with fees customarily allowed for similar 20
services; and 21
(ii) a unit may not apply any portion of the costs of the materials and 22
supplies toward minority business enterprise goals. 23
14–303. 24
(a) (1) (ii) The Board shall keep a record of information regarding any 25
waivers requested in accordance with [§ 14–302(a)(9)(i)] § 14–302(A)(10)(I) of this 26
subtitle and subsection (b)(12) of this section and submit a copy of the record to the General 27
Assembly on or before October 1 of each year, in accordance with § 2–1257 of the State 28
Government Article. 29
(b) These regulations shall include: 30
(12) consistent with [§ 14–302(a)(9)] § 14–302(A)(10) of this subtitle, 31
provisions relating to any circumstances under which a unit may waive obligations of the 32
contractor relating to minority business enterprise participation; 33
(13) provisions requiring a [monthly] submission to the unit by minority 34
business enterprises acknowledging all payments received [in the preceding 30 days] OR 35 HOUSE BILL 500 35
ANY OTHER INFORMATIO N REQUESTED BASED ON CRITERIA ESTABLISHED BY THE 1
GOVERNOR’S OFFICE OF SMALL, MINORITY, OR WOMEN BUSINESS AFFAIRS under 2
a contract governed by this subtitle; 3
[(17) a requirement that a bid or proposal based on a solicitation with an 4
expected degree of minority business enterprise participation identify the specific 5
commitment of certified minority business enterprises at the time of submission;] 6
[(18)] (17) provisions promoting and providing for the counting and 7
reporting of certified minority business enterprises as prime contractors; 8
[(19)] (18) provisions establishing standards to require a minority business 9
enterprise to perform a commercially useful function on a contract; 10
[(20)] (19) a requirement that each unit work with the Governor’s Office of 11
Small, Minority, and Women Business Affairs to designate certain procurements as being 12
excluded from the requirements of § 14–302(a) of this subtitle; 13
[(21)] (20) provisions promoting and providing for the counting and 14
reporting of minority business enterprises certified as both a woman–owned business and 15
a business owned by a member of an ethnic o r racial group in accordance with § 16
14–302(a)(5) of this subtitle; and 17
[(22)] (21) other provisions that the Board considers necessary or 18
appropriate to encourage participation by minority business enterprises and to protect the 19
integrity of the procurement process. 20
14–401. 21
(a) (1) In this section the following words have the meanings indicated. 22
(5) (i) [“Services”] SUBJECT TO SUBPARAGRA PH (II) OF THIS 23
PARAGRAPH , “SERVICES” has the meaning stated in [§ 11–101(t)(1) and (2)] § 11–101 of 24
this article. 25
(ii) Notwithstanding [§ 11–101(t)(3)] § 11–101 of this article, 26
“services” includes construction related services and energy performance contract services. 27
14–502.1. 28
(a) (1) This section applies to a procurement by any unit or agency of the 29
Executive Branch of State government for goods, supplies, services, maintenance, 30
construction, construction–related services, architectural services, or engineering services. 31
(2) This section does not apply to: 32
36 HOUSE BILL 500
(i) procurements made under Subtitle 1 of this title; 1
(ii) procurements involving expenditures of federal dollars, to the 2
extent that inclusion in the small business reserve program conflicts with federal law or 3
grant provisions; 4
[(iii) procurements with a total dollar value under $50,000;] 5
[(iv)] (III) the procurement of human, social, cultural, or educational 6
services; or 7
[(v)] (IV) term and master contracts exempted under subsection (c) 8
of this section. 9
(b) (1) A procurement with a total dollar value [between $50,000 and 10
$500,000] OF $1,000,000 OR LESS shall be designated for the small business reserve. 11
(2) Each unit or agency shall implement this subsection in a manner 12
consistent with all applicable statutes, including the requirements of Subtitle 3 of this title. 13
14–504. 14
(c) The procurement officer of a unit shall award a procurement contract 15
designated for a small business reserve to the small business that submits a responsive bid 16
OR A PROPOSAL THAT I S REASONABLY SUSCEPT IBLE OF BEING SELECT ED FOR 17
AWARD that: 18
(1) is the lowest bid price; 19
(2) if the invitation for bids so provides, is the lowest evaluated bid price; 20
or 21
(3) is the bid or proposal most favorable to the State within the small 22
business reserve. 23
14–602. 24
(a) (1) A unit shall structure procurement procedures, consistent with the 25
purposes of this subtitle, to try to achieve or exceed an overall percentage goal of the unit’s 26
total dollar value of procurement contracts to be made directly or indirectly with 27
veteran–owned small business enterprises. 28
(2) The Office of Small, Minority, and Women Business Affairs shall adopt 29
regulations that establish the overall percentage goal. 30
HOUSE BILL 500 37
(b) Solicitation documents shall state the expected percentage of veteran–owned 1
small business enterprise participation based, in part, on: 2
(1) the potential contracting opportunities available in the procurement 3
contract, including both prime contracting and subcontracting opportunities, as determined 4
through analysis of the scope of the work presented in the solicitation documents; and 5
(2) the availability of veteran–owned small business enterprises to respond 6
competitively to the potential contracting opportunities. 7
(C) (1) (I) THIS PARAGRAPH APPLIE S TO A BIDDER OR OFF EROR 8
AFTER SUBMISSION OF A BID OR PROPOSAL AN D BEFORE THE EXECUTION OF A 9
CONTRACT WITH AN EXP ECTED DEGREE OF VETE RAN–OWNED SMALL BUSINESS 10
ENTERPRISE PARTICIPA TION. 11
(II) 1. IF A UNIT’S PROCUREMENT OFFICE R DETERMINES 12
THAT A DEFICIENCY EX ISTS IN THE VETERAN –OWNED SMALL BUSINESS ENTERPRISE 13
PARTICIPATIO N SCHEDULE , THE PROCUREMENT OFFI CER SHALL NOTIFY THE 14
BIDDER OR OFFEROR OF THE DEFICIENCY AND R EQUIRE THE BIDDER OR OFFEROR 15
TO SUBMIT AN AMENDED VETERAN–OWNED SMALL BUSINESS ENTERPRISE 16
PARTICIPATION SCHEDU LE WITHIN A REASONAB LE TIME PERIOD. 17
2. A DETERMINATION UNDER SUBSUB PARAGRAPH 1 OF 18
THIS SUBPARAGRAPH SH ALL BE MADE IN CONSU LTATION WITH THE UNI T’S 19
VETERAN–OWNED SMALL BUSINESS ENTERPRISE LIAISON . 20
3. AS DIRECTED BY THE NO TIFICATION MADE UNDE R 21
SUBSUBPARAGRAPH 1 OF THIS SUBPARAGRAPH , THE BIDDER OR OFF EROR SHALL 22
SUBMIT AN AMENDED VE TERAN–OWNED SMALL BUSINESS ENTERPRISE 23
PARTICIPATION SCHEDU LE CORRECTING THE DE FICIENCY IDENTIFIED . 24
(2) A UNIT MAY CONSIDER AD DING OR INCREASING T HE 25
VETERAN–OWNED SMALL BUSINESS PARTICIPATION GOAL O N A PROCUREMENT 26
CONTRACT: 27
(I) AT ANY TIME PRIOR TO CONTRACT EXECUTION ; 28
(II) AFTER CONTRACT EXECU TION, WHEN DETERMINED TO B E 29
IN THE BEST INTEREST OF THE STATE; OR 30
(III) WHEN THE VETERAN –OWNED SMALL BUSINESS 31
ENTERPRISE PARTICIPA TION SCHEDULE HAS BE EN CREATED O R AMENDED. 32
38 HOUSE BILL 500
(3) THE VETERAN –OWNED SMALL BUSINESS ENTERPRISE 1
PARTICIPATION SCHEDU LE, INCLUDING ANY AMENDM ENT, SHALL BE ATTACHED TO 2
AND MADE A PART OF T HE EXECUTED CONTRACT . 3
(4) A VETERAN–OWNED SMALL BUSINESS ENTERPRISE 4
PARTICIPATION SCHEDU LE MAY BE AME NDED TO ADD TO OR IN CREASE 5
VETERAN–OWNED SMALL BUSINESS ENTERPRISE PARTICIPA TION AFTER THE DATE 6
OF CONTRACT EXECUTIO N ONLY IF: 7
(I) IT IS IN THE BEST INTEREST OF THE STATE; 8
(II) IT IS APPROVED BY TH E HEAD OF THE UNIT ; AND 9
(III) THE CONTRACT IS AMENDED. 10
[(c)] (D) The provisions of this subtitle do not apply to a unit’s procurement 11
procedures to the extent that any unit determines that those provisions are in conflict with 12
an applicable federal program. 13
14–602.1. 14
(A) IN THIS SECTION , “VETERAN–OWNED SMALL BUSINESS RESERVE” 15
MEANS THOSE PROCUREM ENTS THAT ARE LIMITE D TO RESPONSES FROM 16
BUSINESSES THAT QUAL IFY AS A VETERAN–OWNED SMALL BUSINESS ENTERPRISE. 17
(B) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , 18
THIS SECTION APPLIES TO ALL PROCUREMENTS BY THE DEPARTMENT OF 19
VETERANS AND MILITARY FAMILIES AND THE MILITARY DEPARTMENT OR ANY 20
UNIT ACTING ON BEHAL F OF THE DEPARTMENT OF VETERANS AND MILITARY 21
FAMILIES OR THE MILITARY DEPARTMENT . 22
(2) THIS SECTION DOES NOT APPLY TO: 23
(I) PROCUREMENTS MADE UN DER SUBTITLE 1 OF THIS TITLE; 24
OR 25
(II) PROCUREMENTS INVOLVI NG EXPENDITURES OF F EDERAL 26
DOLLARS, TO THE EXTENT THAT T HE REQUIREMENTS IN T HIS SECTION CONFLICT 27
WITH FEDERAL LAW OR OTHER GRANT PROVISIO NS. 28
(C) NOTWITHSTANDING SUBTITLE 5 OF THIS TITLE, ANY PROCUREMENT BY 29
THE DEPARTMENT OF VETERANS AND MILITARY FAMILIES OR THE MILITARY 30
DEPARTMENT OF GOODS , SUPPLIES, SERVICES, MAINTENANCE , CONSTRUCTION , 31
CONSTRUCTION RELATED SERVICES, ARCHITECTURAL SERVIC ES, AND 32 HOUSE BILL 500 39
ENGINEERING SERVICES SHALL BE ELIGIBLE FOR DESIGNA TION FOR THE 1
VETERAN–OWNED SMALL BUSINESS RESERVE. 2
(D) THE GOVERNOR’S OFFICE OF SMALL, MINORITY, AND WOMEN 3
BUSINESS AFFAIRS SHALL: 4
(1) IN CONSULTATION WITH THE CHIEF PROCUREMENT OFFICER 5
AND THE ATTORNEY GENERAL, ESTABLISH STANDAR DS AND GUIDELINES FO R 6
PARTICIPATION IN THE VETERAN–OWNED SMALL BUSINESS RESERVE PROGRAM 7
EVERY 5 YEARS; 8
(2) ESTABLISH GUIDELINES FOR VETERAN –OWNED SMALL BUSINESS 9
RESERVE PROGRAM ADMI NISTRATION; AND 10
(3) COLLECT DATA REGARDI NG THE DEPARTMENT OF VETERANS 11
AND MILITARY FAMILIES’ AND THE MILITARY DEPARTMENT ’S USE OF 12
VETERAN–OWNED SMALL BUSINESS RESERVE VENDORS . 13
SUBTITLE 8. INTERNSHIP AND REGISTERED APPRENTICESHIP PROGRAM. 14
14–801. 15
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 16
INDICATED. 17
(B) “COVERED PROCUREMENT ” MEANS A PROCUREMENT CONTRACT THAT : 18
(1) MEETS THE CRITERIA E STABLISHED BY THE CHIEF 19
PROCUREMENT OFFICER, IN CONSULTATION WITH THE SECRETARY, UNDER § 20
14–802 OF THIS SUBTITLE ; AND 21
(2) IS NOT A PUBLIC WORK CONTRACT SUBJECT TO § 17–202 OF THIS 22
ARTICLE. 23
(C) “DEPARTMENT ” MEANS THE MARYLAND DEPARTMENT OF LABOR. 24
(D) “ELIGIBLE INTERNSHIP P ROGRAM” MEANS AN INTERNSHIP PROGRAM 25
THAT REQUIRES A CONT RACTOR OR OTHER ENTI TY TO PROVIDE PAID I NTERNSHIPS 26
THAT MEET STANDARDS ESTABLISHED BY THE SECRETARY. 27
(E) “REGISTERED APPRENTICE SHIP PROGRAM ” MEANS AN 28
APPRENTICESHIP PROGR AM THAT IS REGISTERE D WITH AND APPROVED BY THE 29
DIVISION OF WORKFORCE DEVELOPMENT AND ADULT LEARNING. 30 40 HOUSE BILL 500
(F) “SECRETARY” MEANS THE SECRETARY OF LABOR. 1
14–802. 2
(A) THIS SUBTITLE APPLIES T O A COVERED PROCUREM ENT MADE BY A 3
UNIT. 4
(B) A CONTRACTOR AWARDED A COVERED PROCUREMENT WITH AN 5
ESTIMATED TOTAL DOLL AR VALUE OF $1,000,000 OR MORE SHALL UTILIZ E AN 6
ELIGIBLE INTERNSHIP PROGRAM. 7
(C) A CONTRACTOR AWARDED A COVERED PRO CUREMENT SHALL UTILI ZE A 8
REGISTERED APPRENTIC ESHIP PROGRAM . 9
(D) THE CHIEF PROCUREMENT OFFICER, IN CONSULTATION WITH THE 10
SECRETARY: 11
(1) SHALL ADOPT REGULATI ONS ESTABLISHING THE DEFINITION OF 12
“COVERED PROCUREMENT ”; AND 13
(2) MAY ADOPT OTHER REGU LATIONS NECESSARY TO CARRY OUT 14
THIS SUBTITLE. 15
14–803. 16
(A) A CONTRACTOR THAT SUBM ITS A BID OR PROPOSA L FOR A COVERED 17
PROCUREMENT SHALL PR OVIDE TO A UNIT WRIT TEN VERIFICATION OF : 18
(1) THE NUMBER OF APPREN TICES OR INTERNS THA T WILL BE 19
UTILIZED THROUGHOUT THE CONTRACT TERM , INCLUDING POTENTIAL RENEWAL 20
OPTIONS; 21
(2) THE WORK TO BE PERFO RMED BY APPRENTICES IN A REGISTERED 22
APPRENTICESHIP PROGR AM OR INTERNS IN AN ELIGIBLE INTERNSHIP PROGRAM; 23
AND 24
(3) THE DURATION OF THE APPRENTICESHIP OR TH E INTERNSHIP. 25
(B) THE WRITTEN VERIFICAT ION REQUIRED UNDER S UBSECTION (A) OF 26
THIS SECTION SHALL B E PROVIDED BEFORE TH E CONTRACTOR MAY BE AWARDED A 27
CONTRACT FOR A COVER ED PROCUREMENT . 28
HOUSE BILL 500 41
14–804. 1
(A) THE SECRETARY IS RESPONSI BLE FOR ENSURING COM PLIANCE WITH 2
THE REQUIREMENTS OF THIS SUBTITLE. 3
(B) THE SECRETARY SHALL ESTAB LISH CRITERIA TO ASS IST UNITS IN 4
ENSURING CONTRACTOR COMPLIANCE WITH THIS SUBTITLE, INCLUDING: 5
(1) PENALTIES FOR A CONT RACTOR’S FAILURE TO USE APP RENTICES 6
OR INTERNS AS PROVID ED IN A BID OR PROPO SAL; AND 7
(2) PROCEDURES FOR REPOR TING ALLEGED VIOLATI ONS OF THIS 8
SUBTITLE. 9
14–805. 10
(A) A CONTRACTOR THAT IS A WARDED A CONTRACT FO R A COVERED 11
PROCUREMENT UNDER TH IS SUBTITLE WHO FAIL S TO USE APPRENTICES FROM A 12
REGISTERED APPRENTIC ESHIP PROGRAM OR INT ERNS FROM AN ELIGIBLE 13
INTERNSHIP PROGRAM A S PROVIDED IN THE BI D OR PROPOSAL SHALL BE LIABLE 14
FOR AN AMOUNT AS SPE CIFIED BY THE CRITER IA ESTABLISHED UNDER § 14–804 OF 15
THIS SUBTITLE. 16
(B) A UNIT SHALL REPORT AL LEGED VIOLATIONS OF THIS SUBTITLE TO THE 17
DEPARTMENT AS SPECIF IED IN THE CRITERIA ESTABLISHED UNDER § 14–804 OF 18
THIS SUBTITLE. 19
(C) THE DEPARTMENT SHALL REPO RT ALLEGED VIOLATION S OF THIS 20
SUBTITLE TO THE OFFICE OF THE ATTORNEY GENERAL, WHICH SHALL DETERMIN E 21
WHETHER TO BRING A C IVIL ACTION AGAINST A PERSON OR BUSINESS FOR A 22
VIOLATION OF THIS SU BTITLE. 23
(D) PENALTIES SHALL BE RE COVERABLE IN CIVIL A CTIONS AND PAID TO 24
THE STATE APPRENTICESHIP TRAINING FUND ESTABLISHED UNDE R § 17–602 OF 25
THIS ARTICLE, UNLESS OTHERWISE REQ UIRED BY FEDERAL LAW . 26
(E) THE SECRETARY MAY FILE SU IT TO ENFORCE THIS S UBTITLE IN ANY 27
COURT OF COMPETENT J URISDICTION. 28
(F) IN AN ACTION FILED UN DER THIS SECTION , THE COURT SHALL REQU IRE 29
THE CONTRACTOR TO PA Y THE AMOUNT REQUIRE D BY SUBSECTION (A) OF THIS 30
SECTION, INCLUDING INTERE ST, REASONABLE ATTORNEY ’S FEES, AND COURT 31
COSTS. 32 42 HOUSE BILL 500
SUBTITLE 9. GOOD LABOR PRACTICES PREFERENCE . 1
14–901. 2
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 3
INDICATED. 4
(B) “COMMISSIONER ” MEANS THE COMMISSIONER OF LABOR AND 5
INDUSTRY. 6
(C) “GOOD LABOR PRACTICES CERTI FIED BUSINESS” MEANS A BUSINESS 7
THAT MEETS THE QUALI FICATIONS ESTABLISHE D UNDER § 14–903 OF THIS 8
SUBTITLE. 9
(D) “GOOD LABOR PRACTICES PREFERENCE ” MEANS A PREFERENCE 10
ESTABLISHED UNDER § 14–904 OF THIS SUBTITLE APP LIED TO BUSINESSES 11
HOLDING A VALID, CURRENT CERTIFICATIO N OF THEIR GOOD LABO R PRACTICES. 12
(E) “PUBLIC BODY” HAS THE MEANING STAT ED IN § 17–201 OF THIS 13
ARTICLE. 14
(F) “PUBLIC WORK CONTRACT ” HAS THE MEANING STAT ED IN § 15
17–201 OF THIS ARTICLE. 16
14–902. 17
THIS SUBTITLE APPLIES TO: 18
(1) PUBLIC WORK CONTRACT S PROCURED BY A PUBL IC BODY; AND 19
(2) A CONTRACT SUBJECT T O § 18–102 OF THIS ARTICLE. 20
14–903. 21
(A) TO OBTAIN INITIAL CER TIFICATION AS A GOOD LABOR PRACTICES 22
CERTIFIED BUSINESS , A BUSINESS MUST ATTE ST THAT, ON ANY CONTRACT SUBJECT 23
TO THIS SUBTITLE THA T IT IS AWARDED OR U NDER WHICH IT PERFOR MS ANY WORK, 24
THE BUSINESS WILL : 25
(1) DIRECTLY EMPLOY , AS W–2 EMPLOYEES, ALL PERSONS 26
PERFORMING WORK UNDE R THE CONTRACT ; 27
HOUSE BILL 500 43
(2) PAY ALL PERSONS BY C HECK OR ELECTRONIC M EANS AS 1
AVAILABLE AND NOT IN CASH OR CA SH EQUIVALENT ; 2
(3) STRICTLY COMPLY WITH ALL LEGAL OBLIGATION S AS AN 3
EMPLOYER, INCLUDING ITS OBLIGA TIONS AS AN EMPLOYER UNDER TITLE 3, TITLE 4
5, TITLE 8, OR TITLE 9 OF THE LABOR AND EMPLOYMENT ARTICLE AND, AS 5
APPLICABLE, UNDER TITLE 17 OR TITLE 18 OF THIS ARTICLE; 6
(4) PROVIDE ADVANCE WRIT TEN NOTIFICATION TO THE 7
PROCUREMENT AUTHORIT Y AND TO THE MARYLAND DEPARTMENT OF LABOR, 8
DIVISION OF LABOR AND INDUSTRY, IN A FORM TO BE DETE RMINED BY THE 9
COMMISSIONER , OF ANY SUBCONTRACTOR S PERFORMING WORK UNDER THE 10
CONTRACT; 11
(5) PROVIDE WRITTEN NOTI CE OF THE REQUIREMEN TS OF ITEMS (1), 12
(2), AND (3) OF THIS SUBSECTION T O ANY SUBCONTRACTORS PERFORMING WORK 13
UNDER THE CONTRACT ; 14
(6) OBTAIN WRITTEN ACKNO WLEDGMENT OF THE NOT ICE PROVIDED 15
IN ITEM (5) OF THIS SUBSECTION AND O F THE SUBCONTRACTOR ’S AGREEMENT TO 16
ADHERE TO THOSE REQU IREMENTS, TO BE FILED WITH THE COMMISSIONER , IN A 17
FORM AND MANNER DETE RMINED BY THE COMMISSIONER ; 18
(7) SUCCESSFULLY COMPLET E A COMPREHENSIVE CO NSULTATION 19
VISIT BY THE MARYLAND OCCUPATIONAL SAFETY AND HEALTH PROGRAM WITHIN 20
A REASONABLE TIME DE TERMINED BY THE COMMISSIONER , FOLLOWING THE START 21
OF WORK UNDER THE CO NTRACT; 22
(8) BE JOINTLY AND SEVER ALLY LIABLE AS AN EM PLOYER FOR ANY 23
VIOLATION OF A SUBCO NTRACTOR UNDER TITLE 3, TITLE 5, TITLE 8, OR TITLE 9 OF 24
THE LABOR AND EMPLOYMENT ARTICLE OR TITLE 17 OR TITLE 18 OF THIS ARTICLE 25
IN CONNECTION WITH T HE SUBCONTRACTOR ’S PERFORMANCE OF WOR K UNDER THE 26
CONTRACT; 27
(9) PROMPTLY DISCLOSE TO THE COMMISSIONER , IN A FORM AND 28
MANNER TO BE PRESCRI BED BY THE COMMISSIONER , ANY SUITS, CHARGES, 29
DEMANDS, ORDERS, FINDINGS, OR ADJUDICATIONS MAD E AGAINST IT IN 30
CONNECTION WITH VIOL ATIONS SUBJECT TO IT EM (1), (2), OR (3) OF THIS 31
SUBSECTION OR AGAINS T ANY OF ITS SUBCONT RACTORS AS PROVIDED IN ITEM (8) 32
OF THIS SUBSECTION; AND 33
(10) ON CONTRACTS SUBJECT TO § 18–102 OF THIS ARTICLE, PROVIDE 34
PROOF THAT THE BUSIN ESS HAS SECURED A PA YMENT BOND SUFFICIEN T TO 35 44 HOUSE BILL 500
ENSURE PAYMENT OF WA GES TO ALL EMPLOYEES PERFORMING WORK UNDE R THE 1
CONTRACT. 2
(B) (1) A BUSINESS THAT SUBMIT S AN APPLICATION TO TH E 3
COMMISSIONER , ON A FORM DEVELOPED BY THE COMMISSIONER , DEMONSTRATING 4
SATISFACTION OF THE CRITERIA LISTED IN S UBSECTION (A) OF THIS SECTION, MAY 5
BE ISSUED A GOOD LAB OR PRACTICES CERTIFI CATION. 6
(2) THE CERTIFICATION IN PARAGRAPH (1) OF THIS SUBSECTION 7
SHALL BE VALID FOR 12 MONTHS FROM THE DATE OF ISSUANCE, PROVIDED THAT 8
THE BUSINESS’S ELIGIBILITY FOR CE RTIFICATION IS MAINT AINED CONTINUOUSLY 9
DURING THAT PERIOD . 10
(3) THE COMMISSIONER SHALL : 11
(I) MAINTAIN A LIST OF A LL BUSINESSES W ITH CURRENT , 12
VALID GOOD LABOR PRA CTICES CERTIFICATION ; 13
(II) PROVIDE THE LIST IN ITEM (I) OF THIS PARAGRAPH TO ALL 14
PROCUREMENT OFFICERS AT LEAST ONCE EVERY 3 MONTHS AND ON REQUES T; AND 15
(III) PUBLISH THE LIST IN ITEM (I) OF THIS PARAGRAPH ON THE 16
MARYLAND DEPARTMENT OF LABOR’S PUBLIC WEBSITE . 17
(C) A BUSINESS SEEKING TO RENEW ITS CERTIFICAT ION FOR AN 18
ADDITIONAL 12–MONTH PERIOD SHALL : 19
(1) PROVIDE AN UPDATED A TTESTATION AT A TIME AND IN A FORM 20
DEVELOPED BY THE COMMISSIONER ; AND 21
(2) PROVIDE ANY ADDI TIONAL INFORMATION R EQUESTED BY THE 22
COMMISSIONER . 23
(D) IF THE COMMISSIONER DETERMIN ES THAT A BUSINESS I S NOT 24
ELIGIBLE, OR IS NO LONGER ELIG IBLE, FOR CERTIFICATION , THE COMMISSIONER 25
SHALL: 26
(1) REVOKE THE CERTIFICA TION; AND 27
(2) REMOVE THE BUSINESS FROM THE LIST OF GOOD LABOR 28
PRACTICES CERTIFIED BUSINESSES MAINTAINE D UNDER SUBSECTION (B) OF THIS 29
SECTION. 30
HOUSE BILL 500 45
(E) THE CHIEF PROCUREMENT OFFICER, IN CONSULTATION WITH THE 1
COMMISSIONER , MAY ADOPT REGULATION S TO IMPLEMENT THE P ROVISIONS OF 2
THIS SUBTITLE. 3
14–904. 4
(A) IN THIS SECTION , “PERCENTAGE PREFERENC E” MEANS THE 5
PERCENTAGE OF THE LO WEST RESPONSIVE BID SUBMITTED BY A RESPO NSIBLE 6
BIDDER WHO IS NOT A GOOD LABOR PRACTICES CERTIFIED BUSINESS B Y WHICH A 7
RESPONSIVE BID BY A GOOD LABOR PRACTICES CERTIFIED BUSINESS MAY: 8
(1) EXCEED THE LOWEST BI D; AND 9
(2) BE AWARDED A PROCURE MENT CONTRACT UNDER THIS 10
SUBTITLE. 11
(B) THE CHIEF PROCUREMENT OFFICER, IN CONSULTATION WITH THE 12
SECRETARY, SHALL ESTABLISH A PE RCENTAGE PREFERENCE OF AT LEAST 5% FOR 13
A GOOD LABOR PRACTICES CERTIFIED BUSINESS. 14
(C) THE PERCENTAGE PREFER ENCE ESTABLISHED UND ER THIS SECTION 15
SHALL BE IN ADDITION TO ANY OTHER PREFERE NCE FOR WHICH THE BU SINESS IS 16
QUALIFIED UNDER THIS TITLE. 17
14–905. 18
(A) A PERSON MAY NOT ENGAG E IN CONDUCT PROHIBI TED UND ER § 19
14–605(A) OR § 14–606 OF THIS TITLE IN CON NECTION WITH ANY ACT UNDERTAKEN 20
TO OBTAIN, RENEW, MAINTAIN, OR EXERCISE A GOOD L ABOR PRACTICES 21
CERTIFICATION . 22
(B) THE PENALTIES ESTABLI SHED IN §§ 14–605(B) AND (C) AND 14–606 OF 23
THIS TITLE APPLY TO VIOLATIONS OF THIS SUBTITLE . 24
14–906. 25
IN ADDITION TO THE PE NALTIES ESTABLISHED UNDER § 14–905 OF THIS 26
SUBTITLE, A PERSON THAT WILLFU LLY MISREPRESENTS OR WILLFULLY OMITS ANY 27
MATERIAL MATTER IN C ONNECTION WITH AN AP PLICATION OR REQUIRE D 28
DISCLOSURE FOR PURPO SES OF OBTAINING OR RETAINI NG A CONTRACT OR 29
SUBCONTRACT UNDER TH IS SUBTITLE MAY BE S UBJECT TO: 30
46 HOUSE BILL 500
(1) SUSPENSION OR DEBARM ENT UNDER TITLE 16 OF THIS ARTICLE; 1
OR 2
(2) CIVIL PENALTIES UNDE R THE MARYLAND FALSE CLAIMS ACT. 3
15–103. 4
It is the policy of the State to make a payment under a procurement contract [within 5
30 days]: 6
(1) WITHIN 30 DAYS after the day on which the payment becomes due 7
[under the procurement contract; or 8
(2) if later, after the day on which] AND the unit receives [an] A PROPER 9
invoice; OR 10
(2) FOR A SMALL BUSINESS RESERVE CONTRACT , WITHIN 15 DAYS 11
AFTER THE DAY ON WHI CH THE PAYMENT BECOM ES DUE AND THE UNIT RECEIVES A 12
PROPER INVOICE . 13
15–111. 14
(a) Within 60 days after the end of each fiscal year, each primary procurement 15
unit shall submit to the Chief Procurement Officer a report on each procurement contract 16
that was awarded during the preceding fiscal year, whether the procurement was 17
conducted by the primary procurement unit or subject to review by the pri mary 18
procurement unit, and: 19
(1) was exempt from the notice requirements of § 13–103(c) of this article 20
because the procurement officer reasonably expected that the procurement contract would 21
be performed entirely outside this State and the District of Columbia; 22
(2) cost more than [$100,000] THE SMALL PROCUREMEN T AMOUNT 23
SPECIFIED IN § 13–109 OF THIS ARTICLE and was awarded for the procurement of 24
services, construction related services, architectural services, or engineering services; or 25
(3) was awarded on the basis of: 26
(i) § 13–107 of this article (“Sole source procurement”); 27
(ii) § 13–108(a) of this article (“Emergency procurement”); or 28
(iii) § 13–108(c) of this article (“Expedited procurement”). 29
15–112. 30
HOUSE BILL 500 47
(e) [Before January 1, 2017, the] THE Board shall propose UPDATED regulations 1
AS NEEDED that provide for an expedited change order process for change orders valued 2
at more than [$50,000] THE SMALL PROCUREMEN T AMOUNT SPECIFIED I N § 13–109 3
OF THIS ARTICLE . 4
15–112.1. 5
(A) IN THIS SECTION, “CONTRACT MODIFICATIO N” MEANS A WRITTEN 6
ALTERATION THAT : 7
(1) AFFECTS SPECIFICATIO NS, DELIVERY POINT , DATE OF DELIVERY , 8
PERIOD OF PERFORMANC E, PRICE, QUANTITY, OR OTHER PROVISIONS OF A 9
PROCUREMENT CONTRACT ; AND 10
(2) IS ACCOMPLISHED BY M UTUAL ACTION OF THE PARTIES TO AN 11
EXISTING PROCUREMENT CONTRACT. 12
(B) THIS SECTION APPLIES TO ALL STATE PROCUREMENT CON TRACTS. 13
(C) A PROCUREMENT OFFICER MAY APPROVE CONTRACT MODIFICATIONS 14
UNDER THE FOLLOWING CONDITIONS: 15
(1) THE CONTRACT MODIFIC ATION DOES N OT MATERIALLY CHANGE 16
THE SCOPE OF WORK ; AND 17
(2) THE CONTRACT MODIFIC ATION DOES NOT INCRE ASE THE TOTAL 18
VALUE OF THE CONTRAC T TO AN AMOUNT THAT EXCEEDS THE SMALL 19
PROCUREMENT AMOUNT S PECIFIED IN § 13–109 OF THIS ARTICLE. 20
(D) THE PRIMARY PROCUREME NT UNIT, THE CHIEF PROCUREMENT 21
OFFICER, OR THE CHIEF PROCUREMENT OFFICER’S DESIGNEE MAY APPRO VE A 22
CONTRACT MODIFICATIO N UP TO $1,000,000 THAT DOES NOT MATERI ALLY CHANGE 23
THE SCOPE OF WORK . 24
(E) A PROCUREMENT OFFICER SHALL DOCUMENT A CON TRACT 25
MODIFICATION MADE UN DER SUBSECTION (C) OR (D) OF THIS SECTION. 26
(F) THE CHIEF PROCUREMENT OFFICER SHALL ESTABLI SH GUIDELINES 27
FOR THE CONTRACT MOD IFICATION PROCESS . 28
17–103. 29
(a) (1) Before a public body awards a construction contract exceeding 30
[$100,000] THE SMALL PROCUREMEN T AMOUNT SPECIFIED IN § 13–109 OF THIS 31 48 HOUSE BILL 500
ARTICLE FOR CONSTRUC TION, the contractor shall provide payment security and 1
performance security that meet the requirements of § 17–104 of this subtitle. 2
(2) The security shall be: 3
(i) for performance security, in an amount that the public body 4
considers adequate for its protection; and 5
(ii) for payment security, at least 50% of the total amount payable 6
under the contract. 7
(b) A public body, other than the State or a unit of the State government, may 8
require payment security or performance security for a construction contract if: 9
(1) the contract exceeds [$50,000] $100,000 but does not exceed 10
[$100,000] THE SMALL PROCUREMEN T AMOUNT SPECIFIED I N § 13–109 OF THIS 11
ARTICLE; and 12
(2) the amount of the security does not exceed 50% of the contract amount. 13
17–602. 14
(a) There is a State Apprenticeship Training Fund in the Department. 15
(b) The Fund consists of: 16
(1) payments made by contractors or subcontractors in accordance with 17
this subtitle and Subtitle 6A of this title; [and] 18
(2) penalties collected as a result of violations of this subtitle and Subtitle 19
6A of this title; AND 20
(3) PENALTIES COLLECTED AS A RESULT OF VIOLATIONS O F TITLE 21
14, SUBTITLE 8 OF THIS ARTICLE . 22
(e) The Secretary shall use money in the fund to: 23
(1) promote preapprenticeship programs and other workforce development 24
programs in the State’s public secondary schools and community colleges that assist 25
students in preparing for and entering apprenticeship training programs; and 26
(2) pay any costs associated with carrying out the provisions of this subtitle 27
and Subtitle 6A of this title OR TITLE 14, SUBTITLE 8 OF THIS ARTICLE . 28
17–604. 29
HOUSE BILL 500 49
(a) A subcontractor that performs work [valued] at [$100,000 or more] A VALUE 1
EXCEEDING THE SMALL PROCUREMENT AMOUNT S PECIFIED IN § 13–109 OF THIS 2
ARTICLE for a covered project shall provide to a unit written verification that: 3
(1) the subcontractor participates in an apprenticeship training program 4
for each covered craft in which it will employ persons for the covered project; 5
(2) the subcontractor will make payments to the Fund; or 6
(3) the subcontractor will make payments in amounts determined under § 7
17–605 of this subtitle to a registered apprenticeship program or to an organization that 8
has registered apprenticeship programs for the purpose of supporting these programs. 9
19–114. 10
Every contract and subcontract shall contain a nondiscrimination clause that [reads 11
as follows] IS SUBSTANTIALLY SIM ILAR TO THE FOLLOWIN G: 12
“As a condition of entering into this agreement, the company represents and warrants that 13
it will comply with the State’s Commercial Nondiscrimination Policy, as described under 14
Title 19 of the State Finance and Procurement Article of the Annotated Code of Maryland. 15
As part of such compliance, the company may not discriminate on the basis of race, color, 16
religion, ancestry or national origin, sex, age, marital status, sexual orientation, gender 17
identity, or on the basis of disability or other unlawful forms of discrimination in the 18
solicitation, selection, hiring, or commercial treatment of subcontractors, vendors, 19
suppliers, or commercial customers, nor shall the company retaliate against any person for 20
reporting instances of such discrimination. The company shall provide equal opportunity 21
for subcontractors, vendors, and suppliers to participate in all of its public sector and 22
private sector subcontracting and supply opportunities, provided that nothing contained in 23
this clause shall prohibit or limit otherwise lawful efforts to remedy the effects of 24
marketplace discrimination that have occurred or are occurring in the marketplace. The 25
company understands and agrees that a material violation of this clause shall be considered 26
a material breach of this agreement and may result in termination of this agreement, 27
disqualification of the company from participating in State contracts, or other sanctions. 28
This clause is not enforceable by or for the benefit of, and creates no obligation to, any third 29
party.”. 30
19–116. 31
Every contract that the State enters into shall include LANGUAGE SUBSTANTIAL LY 32
SIMILAR TO the following [language]: 33
“As a condition of entering into this agreement, upon the request of the Commission on 34
Civil Rights, and only after the filing of a complaint against the company under Title 19 of 35
the State Finance and Procurement Article, as amended from time to time, the company 36
agrees to: provide to the State within 60 days after the request a truthful and complete list 37 50 HOUSE BILL 500
of the names of all subcontractors, vendors, and suppliers that the company has used in the 1
past 4 years on any of its contracts that were undertaken within the State of Maryland, 2
including the total dollar amount paid by the contractor on each subcontract or supply 3
contract. The company further agrees to cooperate in any investigation conducted by the 4
State pursuant to the State’s Commercial Nondiscrimination Policy as set forth under Title 5
19 of the State Finance and Procurement Article of the Annotated Code of Maryland, to 6
provide any documents relevant to any investigation that is requested by the State. The 7
company understands and agrees that violation of this clause shall be considered a material 8
breach of this agreement and may result in contract termination, disqualification by the 9
State from participating in State contracts, and other sanctions.”. 10
Article – State Government 11
4–113. 12
(a) (1) In this section the following words have the meanings indicated. 13
(2) “Departments” means: 14
(i) the Office of the Comptroller; 15
(ii) the Office of the State Treasurer; 16
(iii) the Department of Budget and Management; 17
(iv) the Department of Information Technology; and 18
(v) the Department of General Services. 19
(3) “Financial management infrastructure” means the information 20
technology infrastructure that is used to maintain the general ledger and accountancy for 21
the State, including subledger functions that enable the management of all payments and 22
fund transfers throughout the State. 23
(4) “21st Century Financial Systems Enterprise” means a modern 24
cloud–based information technology infrastructure. 25
(b) In consultation with a designated representative from the Modernize 26
Maryland Oversight Commission, the departments shall: 27
(5) establish working groups as needed, INCLUDING A WORKING GROUP 28
TO STUDY WHETHER IMM EDIATE OR PROMPT PAY MENT FEATURES CAN BE ADDED 29
TO THE 21ST CENTURY FINANCIAL SYSTEMS ENTERPRISE TO DETERMI NE 30
WHETHER BOTH PRIM E CONTACTORS AND SUB CONTRACTORS ON A STATE 31
PROCUREMENT CONTRACT CAN BE PAID BY THE STATE AT THE SAME TIM E; and 32
HOUSE BILL 500 51
SECTION 2. AND BE IT FURTHER ENACTED, That the publisher of the 1
Annotated Code of Maryland, in consultation with and subject to the approval of the 2
Department of Legislative Services, shall correct, with no further action required by the 3
General Assembly, cross–references and terminology rendered incorrect by Section 1 of this 4
Act. The publisher shall adequately describe any correction that is made in an editor’s note 5
following the section affected. 6
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 7
October 1, 2025. 8