EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*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 Wu, Alston, Bagnall, Cullison, Guzzone, Hill, S. Johnson, Kaiser,
Lopez, Martinez, Pena–Melnyk, Rosenberg, and Ross
Introduced and read first time: January 22, 2025
Assigned to: Health and Government Operations
Committee Report: Favorable with amendments
House action: Adopted
Read second time: March 6, 2025
CHAPTER ______
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 2 HOUSE BILL 500
awarding an expedited procurement contract; altering the membership of the Pricing 1
and Selection Committee for Preferred Providers; transferring the Employment 2
Works Program from the Department of General Services to the Office of Small, 3
Minority, and Women Business Affairs; altering certain authority of the Special 4
Secretary for Small, Minority, and Women Business Affairs and of units with regard 5
to the Minority Business Enterprise Program, Small Business Preference Program, 6
Veteran–Owned Small Business Enterprise Program, and Veteran–Owned Small 7
Business Reserve and associated goals; authorizing a primary procurement unit to 8
limit or revoke a unit’s ability to conduct small procurements under certain 9
circumstances; requiring the Board of Public Works to propose updated regulations 10
related to expedited change orders under certain circumstances; authorizing 11
modifications to State contracts under certain circumstances; clarifying that bids 12
and proposals can be considered for procurement contracts designated for a small 13
business reserve; clarifying pay–for–success contracting as a contract type and not a 14
source selection method; authorizing the Chief Procurement Officer, subject to 15
certain approval, to establish additional methods of procurement source selection; 16
requiring an intergovernmental cooperative purchasing agreement to be approved 17
by the primary procurement unit head or designee, or the Chief Procurement Officer 18
or designee; altering certain thresholds for master contracting; requiring a unit to 19
issue a solicitation for a task order to a certain number of contractors under certain 20
circumstances; requiring a contractor to submit a workforce diversity plan or 21
supplier diversity plan with procurements of a certain value; altering a State policy 22
regarding the payment of certain procurement contracts; requiring contractors 23
awarded certain procurements to use a certain internship program or a certain 24
apprenticeship program; establishing a procurement preference evaluation factor for 25
good labor practices certified businesses; requiring certain State departments to 26
establish a working group; requiring the Procurement Advisor to the Board to 27
conduct a certain study relating to instituting an in–State preference; and generally 28
relating to State procurement. 29
BY repealing and reenacting, without amendments, 30
Article – Correctional Services 31
Section 10–101(a) 32
Annotated Code of Maryland 33
(2017 Replacement Volume and 2024 Supplement) 34
BY repealing and reenacting, with amendments, 35
Article – Correctional Services 36
Section 10–101(c) 37
Annotated Code of Maryland 38
(2017 Replacement Volume and 2024 Supplement) 39
BY repealing and reenacting, without amendments, 40
Article – Election Law 41
Section 2–109(a)(1) 42
Annotated Code of Maryland 43
(2022 Replacement Volume and 2024 Supplement) 44 HOUSE BILL 500 3
BY repealing and reenacting, with amendments, 1
Article – Election Law 2
Section 2–109(a)(3) 3
Annotated Code of Maryland 4
(2022 Replacement Volume and 2024 Supplement) 5
BY repealing and reenacting, with amendments, 6
Article – Natural Resources 7
Section 3–103(g)(3)(ii)7. 8
Annotated Code of Maryland 9
(2023 Replacement Volume and 2024 Supplement) 10
BY repealing and reenacting, without amendments, 11
Article – State Finance and Procurement 12
Section 4–301(a), 4–316(a), 11–101(a), 12–111(a)(1), 13–101(a), 13–102(b), 14–106(a) 13
and (b), 14–303(b)(17) through (22), 14–401(a)(1), and 17–602(a) 14
Annotated Code of Maryland 15
(2021 Replacement Volume and 2024 Supplement) 16
BY repealing and reenacting, with amendments, 17
Article – State Finance and Procurement 18
Section 4–301(c) and (d), 4–303, 4–314, 11–101(k) through (y), 12–107(b)(2)(i)2. and 19
11., (3), and (4)(v), 12–111(a)(3)(i), 13–101(h) and (i), 13–102.1(b), 20
13–103(a)(2)(v), (c)(3), and (f), 13–104(g), 13–106(a)(2), 13–108(b)(1) and (8)(i) 21
and (d), 13–110(b)(7), 13–113(d), (e), and (f), 13–206(b), 13–207(a), (b), and 22
(c)(1), 13–216, 14–106(c), 14–108(b) and (c), 14–203(a), 14–204, 14–205, 23
14–302(a)(1)(ii)1., (iii)1., (iv)1., (2), and (8) through (15), 14–303(a)(1)(ii) and 24
(b)(12), (13), and (18) through (22) and (13), 14–401(a)(5), 14–502.1(a) and (b), 25
14–504(c), 14–601, 14–602, 15–103, 15–111(a), 15–112(e), 17–103, 17–602(b) 26
and (e), 17–604(a), 19–114, and 19–116 27
Annotated Code of Maryland 28
(2021 Replacement Volume and 2024 Supplement) 29
BY adding to 30
Article – State Finance and Procurement 31
Section 11–101(k) and (y), 12–107(b)(2)(i)11. and 12., 13–102(a)(11) and (c), 32
13–104(d)(3), 13–109(f), 13–228, 13–229, 14–302(a)(8), and 14–602.1; 14–801 33
through 14–805 to be under the new subtitle “Subtitle 8. Internship and 34
Registered Apprenticeship Program”; 14–901 through 14–906 to be under the 35
new subtitle “Subtitle 9. Good Labor Practices Preference Evaluation Factor”; 36
and 15–112.1 37
Annotated Code of Maryland 38
(2021 Replacement Volume and 2024 Supplement) 39
BY repealing 40
Article – State Finance and Procurement 41 4 HOUSE BILL 500
Section 12–107(b)(2)(i)10. and (5), 13–101(g), 13–102(a)(11), and 13–112.1, and 1
14–303(b)(17) 2
Annotated Code of Maryland 3
(2021 Replacement Volume and 2024 Supplement) 4
BY repealing and reenacting, without amendments, 5
Article – State Government 6
Section 4–113(a) 7
Annotated Code of Maryland 8
(2021 Replacement Volume and 2024 Supplement) 9
BY repealing and reenacting, with amendments, 10
Article – State Government 11
Section 4–113(b)(5) 12
Annotated Code of Maryland 13
(2021 Replacement Volume and 2024 Supplement) 14
BY repealing and reenacting, without amendments, 15
Article – State Personnel and Pensions 16
Section 13–401(a) 17
Annotated Code of Maryland 18
(2024 Replacement Volume and 2024 Supplement) 19
BY repealing and reenacting, with amendments, 20
Article – State Personnel and Pensions 21
Section 13–401(c) 22
Annotated Code of Maryland 23
(2024 Replacement Volume and 2024 Supplement) 24
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 25
That the Laws of Maryland read as follows: 26
Article – Correctional Services 27
10–101. 28
(a) In this subtitle the following words have the meanings indicated. 29
(c) “State correctional facility” has the meaning stated in [§ 11–101(w)] § 11–101 30
of the State Finance and Procurement Article. 31
Article – Election Law 32
2–109. 33
(a) (1) In this section the following words have the meanings indicated. 34
HOUSE BILL 500 5
(3) “Contract” means an agreement in any form entered into by a 1
governmental entity for a procurement as defined in [§ 11–101(m)(1)] § 11–101 of the State 2
Finance and Procurement Article. 3
Article – Natural Resources 4
3–103. 5
(g) (3) (ii) The Service may procure materials, equipment, services, or 6
supplies by utilizing: 7
7. Pay–for–success contracting under [§ 13–112.1] § 13–228 8
of the State Finance and Procurement Article. 9
Article – State Finance and Procurement 10
4–301. 11
(a) In this subtitle the following words have the meanings indicated. 12
(c) (1) “Services” means the rendering of time, effort, or work, rather than the 13
furnishing of a specific physical product other than reports incidental to the required 14
performance. 15
(2) “Services” includes maintenance, construction–related services, 16
architectural services, engineering services, INFORMATION TECHNOLO GY SERVICES, 17
CYBERSECURITY , and the professional, personal, or contractual services provided by 18
attorneys, accountants, physicians, consultants, and other professionals who are 19
independent contractors. 20
(d) “Supplies” means tangible property, including COMMODITIES , 21
INFORMATION TECHNOLO GY HARDWARE AND SOFTWARE , equipment, and materials, 22
AND INTANGIBLE PROPE RTY, INCLUDING INFORMATIO N TECHNOLOGY SOFTWAR E. 23
4–303. 24
The Secretary may delegate any power or duty set forth in Part I or Part II of this 25
subtitle OR DIVISION II OF THIS ARTICLE to the Chief Procurement Officer of the Office 26
of State Procurement. 27
4–314. 28
At time intervals set by the Secretary OR CHIEF PROCUREMENT OFFICER, each 29
unit that procures supplies under Division II of this article shall send to the Secretary OR 30
CHIEF PROCUREMENT OFFICER estimates of the amount and quality of any needed 31
supplies. 32 6 HOUSE BILL 500
4–316. 1
(a) Subject to the initial approval of the Secretary or Chief Procurement Officer, 2
the appropriate purchasing unit for the following entities may use the services of the 3
Department to purchase services, materials, supplies, and equipment: 4
(1) a county; 5
(2) a municipality; 6
(3) a governmental unit in the State; 7
(4) a public or quasi–public agency that: 8
(i) receives State money; and 9
(ii) is exempt from taxation under § 501(c)(3) of the Internal Revenue 10
Code; 11
(5) a private elementary or secondary school that: 12
(i) either has been issued a certificate of approval from the State 13
Board of Education or is accredited by the Association of Independent Schools; and 14
(ii) is exempt from taxation under § 501(c)(3) of the Internal Revenue 15
Code; or 16
(6) a nonpublic institution of higher education as provided under § 17–106 17
of the Education Article. 18
11–101. 19
(a) In this Division II the following words have the meanings indicated unless: 20
(1) the context clearly requires a different meaning; or 21
(2) a different definition is provided for a particular title or provision. 22
(K) “INFORMATION TECHNOLOG Y” HAS THE MEANING STAT ED IN § 3.5–301 23
OF THIS ARTICLE. 24
[(k)] (L) “Invitation for bids” means any document used for soliciting bids under 25
§ 13–103 of this article. 26
HOUSE BILL 500 7
[(l)] (M) “Person” means an individual, receiver, trustee, guardian, personal 1
representative, fiduciary, or representative of any kind and any partnership, firm, 2
association, corporation, or other entity. 3
[(m)] (N) “Primary procurement units” means: 4
(1) the State Treasurer; 5
(2) the Department of General Services; 6
(3) the Department of Transportation; 7
(4) the University System of Maryland; 8
(5) the Maryland Port Commission; 9
(6) the Morgan State University; and 10
(7) the St. Mary’s College of Maryland. 11
[(n)] (O) (1) “Procurement” means the process of: 12
(i) leasing real or personal property as lessee; or 13
(ii) buying or otherwise obtaining supplies, services, construction, 14
construction related services, architectural services, engineering services, or services 15
provided under an energy performance contract. 16
(2) “Procurement” includes the solicitation and award of procurement 17
contracts and all phases of procurement contract administration. 18
[(o)] (P) (1) “Procurement contract” means an agreement in any form entered 19
into by a unit for procurement. 20
(2) “Procurement contract” does not include: 21
(i) a collective bargaining agreement with an employee 22
organization; 23
(ii) an agreement with a contractual employee, as defined in § 24
1–101(d) of the State Personnel and Pensions Article; 25
(iii) a Medicaid, Judicare, or similar reimbursement contract for 26
which law sets: 27
1. user or recipient eligibility; and 28
8 HOUSE BILL 500
2. price payable by the State; or 1
(iv) a Medicaid contract with a managed care organization, as 2
defined in § 15–101(e) of the Health – General Article as to which regulations adopted by 3
the Department establish: 4
1. recipient eligibility; 5
2. minimum qualifications for managed care organizations; 6
and 7
3. criteria for enrolling recipients in managed care 8
organizations. 9
[(p)] (Q) “Procurement officer” means an individual authorized by a unit to: 10
(1) enter into a procurement contract; 11
(2) administer a procurement contract; or 12
(3) make determinations and findings with respect to a procurement 13
contract. 14
[(q)] (R) “Proposal” means a response to any solicitation other than an invitation 15
for bids. 16
[(r)] (S) “Request for proposals” means any document used for soliciting 17
proposals. 18
[(s)] (T) “Responsible bidder or offeror” means a person who: 19
(1) has the capability in all respects to perform fully the requirements for 20
a procurement contract; and 21
(2) possesses the integrity and reliability that will ensure good faith 22
performance. 23
[(t)] (U) “Responsive bid” means a bid that: 24
(1) is submitted under § 13–103 of this article; and 25
(2) conforms in all material respects to the invitation for bids. 26
[(u)] (V) (1) Except as provided in paragraph (3) of this subsection, “services” 27
means: 28
HOUSE BILL 500 9
(i) the labor, time, or effort of a contractor; and 1
(ii) any product or report necessarily associated with the rendering 2
of a service. 3
(2) “Services” includes: 4
(I) services provided by attorneys, accountants, physicians, 5
consultants, and other professionals who are independent contractors; AND 6
(II) INFORMATION TECHNOLO GY SERVICES AND 7
CYBERSECURITY . 8
(3) “Services” does not include: 9
(i) construction related services; 10
(ii) architectural services; 11
(iii) engineering services; or 12
(iv) energy performance contract services. 13
[(v)] (W) “State” means: 14
(1) a state, possession, territory, or commonwealth of the United States; or 15
(2) the District of Columbia. 16
[(w)] (X) (1) “State correctional facilities” means correctional institutions, 17
and all places of correctional confinement, that are located within the State of Maryland 18
and are primarily operated by the Maryland State government. 19
(2) “State correctional facilities” includes Patuxent Institution. 20
(Y) “STATEWIDE CONTRACT ” MEANS A CONTRACT THA T HAS BEEN 21
PROCURED BY A PRIMAR Y PROCUREMENT UNIT T O BE USED BY ANY UNIT OR AN ALL 22
UNITS OR ANY ENTITY LISTED IN § 4–316 OF THIS ARTICLE. 23
[(x)] (Z) (1) “Supplies” means: 24
(i) insurance; 25
(ii) tangible personal property INCLUDING INFORMATIO N 26
TECHNOLOGY HARDWARE AND SOFTWARE ; 27
10 HOUSE BILL 500
(iii) printing; and 1
(iv) services necessarily associated with insurance or tangible 2
personal property. 3
(2) “Supplies” does not include: 4
(i) an interest in real property; or 5
(ii) tangible personal property acquired or used in connection with 6
an energy performance contract. 7
[(y)] (AA) (1) “Unit” means an officer or other entity that is in the Executive 8
Branch of the State government and is authorized by law to enter into a procurement 9
contract. 10
(2) “Unit” does not include: 11
(i) a bistate, multistate, bicounty, or multicounty governmental 12
agency; or 13
(ii) a special tax district, sanitary district, drainage district, soil 14
conservation district, water supply district, or other political subdivision of the State. 15
12–107. 16
(b) Subject to the authority of the Board, jurisdiction over procurement is as 17
follows: 18
(2) the Department of General Services may: 19
(i) engage in or control procurement of: 20
2. supplies, including supplies under Title 4, Subtitle 3 of 21
this article, but excluding insurance[, information processing equipment,] and motor 22
vehicle leases; 23
[10. information processing equipment and associated 24
services, as provided in Title 3.5, Subtitle 3 of this article; and] 25
[11.] 10. telecommunication equipment, systems, or 26
services, as provided in Title 3.5, Subtitle 4 of this article; 27
11. INFORMATION TECHNOLO GY SYSTEM 28
MODERNIZATION , AS PROVIDED IN TITLE 3.5, SUBTITLE 3 OF THIS ARTICLE; AND 29
HOUSE BILL 500 11
12. CYBERSECURITY UPGRAD ES AND MODERNIZATION , 1
AS PROVIDED IN TITLE 3.5, SUBTITLE 3 OF THIS ARTICLE; 2
(3) the Department of Transportation and the Maryland Transportation 3
Authority, without the approval of any of the other primary procurement units, may engage 4
in the procurement of: 5
(i) construction that is related to transportation, as provided in the 6
Transportation Article; 7
(ii) construction related services that are related to transportation, 8
as provided in the Transportation Article; 9
(iii) architectural or engineering services that are related to 10
transportation, under Title 13, Subtitle 3 of this article; 11
(IV) SUPPLIES FOR TRANSPO RTATION–RELATED ACTIVITIES , 12
INCLUDING INFORMATIO N TECHNOLOGY SUPPLIE S THAT ARE SUBJECT T O TITLE 13
3.5 OF THIS ARTICLE, BUT EXCLUDING : 14
1. SUPPLIES FUNDED BY T HE PROCEEDS FROM STATE 15
GENERAL OBLIGATION B ONDS; AND 16
2. INSURANCE; 17
(V) SERVICES FOR TRANSPO RTATION–RELATED ACTIVITIES , 18
INCLUDING INFORMATIO N TECHNOLOGY SERVICE S THAT ARE SUBJECT T O TITLE 19
3.5 OF THIS ARTICLE, BUT EXCLUDING BANKIN G AND FINANCIAL SERV ICES UNDER 20
THE AUTHORITY OF THE STATE TREASURER UNDER ITEM (1) OF THIS SUBSECTION ; 21
[(iv)] (VI) rolling stock and other property peculiar to the operation 22
of a transit system, as provided in § 7–403 of the Transportation Article; 23
[(v)] (VII) supplies for aeronautics related activities, including motor 24
vehicles and information processing supplies, but excluding: 25
1. supplies funded by the proceeds from State general 26
obligation bonds; and 27
2. insurance; and 28
[(vi)] (VIII) services for aeronautics related activities, including 29
information processing services, but excluding banking and financial services under the 30
authority of the State Treasurer under item (1) of this subsection; AND 31
12 HOUSE BILL 500
(4) the Maryland Port Commission, without the approval of any of the 1
other primary procurement units, may engage in the procurement of: 2
(v) leases of real property for port related activities unless the lease 3
payments are from the General Fund of the State[; and]. 4
[(5) the Department of General Services, without the approval of any other 5
primary procurement unit, may engage in or control procurement of: 6
(i) information processing equipment, cloud computing equipment, 7
and associated services, as provided in Title 3.5, Subtitle 3 of this article; 8
(ii) information technology system modernization, as provided in 9
Title 3.5, Subtitle 3 of this article; 10
(iii) telecommunication equipment, systems, or services, as provided 11
in Title 3.5, Subtitle 4 of this article; and 12
(iv) cybersecurity upgrades and modernization, as provided in Title 13
3.5, Subtitle 3 of this article.] 14
12–111. 15
(a) (1) In this section the following words have the meanings indicated. 16
(3) (i) Except as provided in subparagraph (ii) of this paragraph, 17
“services” has the meaning stated in [§ 11–101(u)] § 11–101 of this article. 18
13–101. 19
(a) In this subtitle the following words have the meanings indicated. 20
[(g) “Pay–for–success contracting” means a performance–based procurement 21
method through which a unit contracts with an organization to deliver services or 22
commodities in exchange for payment based on the achievement of outcomes.] 23
[(h)] (G) “Person” includes, unless the context requires otherwise: 24
(1) the State; 25
(2) a county, a municipal corporation, or any other political subdivision; 26
and 27
(3) any unit of the State government or a political subdivision. 28
HOUSE BILL 500 13
[(i)] (H) “Task order” means a procurement process in which only those vendors 1
with master contracts may compete to provide the services, supplies, or commodities under 2
the procurement. 3
13–102. 4
(a) The following procurement methods are authorized at the procurement 5
officer’s discretion, where applicable: 6
[(11) pay–for–success contracting under § 13–112.1 of this subtitle.] 7
(11) A SOURCE SELECTION METH OD ESTABLISHED UNDER 8
SUBSECTION (C) OF THIS SECTION. 9
(b) (1) In awarding a procurement contract for human, social, cultural, or 10
educational service, the preferred method is by competitive sealed proposals under § 11
13–104 of this subtitle. 12
(2) In awarding a procurement contract for a lease of real property, the 13
preferred method is by competitive sealed proposals under § 13–105 of this subtitle. 14
(3) Procurement under an intergovernmental cooperative purchasing 15
agreement is appropriate in situations where the State is expected to achieve a better price 16
as the result of economies of scale or to otherwise benefit by purchasing in cooperation with 17
another governmental entity. 18
(C) THE SUBJECT TO APPROVAL B Y THE BOARD, THE CHIEF 19
PROCUREMENT OFFICER MAY ESTABLISH METHODS OF SOURCE SE LECTION IN 20
ADDITION TO THOSE LI STED IN SUBSECTION (A) OF THIS SECTION AND PROVIDE 21
GUIDELINES FOR USAGE . 22
13–102.1. 23
(b) (1) Subject to approval by the Board of Public Works, the Chief 24
Procurement Officer may establish fees for the use of eMaryland Marketplace by an entity 25
that publishes a notice of a procurement, conducts a procurement, or publishes a notice of 26
award. 27
(2) The Chief Procurement Officer may not charge a unit, as defined in [§ 28
11–101(y)] § 11–101 of this article, a fee under this subsection. 29
13–103. 30
(a) (2) Subject to subsection (b) of this section, an invitation for bids shall 31
include: 32
14 HOUSE BILL 500
(v) if the [Secretary of General Services, the Secretary of 1
Transportation, or the Chancellor of the University System of Maryland] HEAD OF THE 2
UNIT OR THE HEAD OF THE UNIT’S DESIGNEE has so designated, the small business 3
preference. 4
(c) (3) The unit shall publish notice in eMaryland Marketplace at least 20 days 5
before bid opening if: 6
(i) the procurement officer reasonably expects bid prices to exceed 7
[$50,000] THE SMALL PROCUREMEN T AMOUNT SPECIFIED I N § 13–109 OF THIS 8
SUBTITLE or a lower amount set by the Board by regulation in accordance with Title 10, 9
Subtitle 1 of the State Government Article; and 10
(ii) at least part of the procurement contract is to be performed in 11
this State or the District of Columbia. 12
(f) Not more than 30 days after the execution and approval of a procurement 13
contract in excess of [$50,000] THE SMALL PROCUREMEN T AMOUNT SPECIFIED I N § 14
13–109 OF THIS SUBTITLE awarded under this section, or a lower amount set by the Board 15
by regulation in accordance with Title 10, Subtitle 1 of the State Government Article, a unit 16
shall publish notice of the award in eMaryland Marketplace. 17
13–104. 18
(d) (3) (I) EXCEPT AS PROVIDED IN SUBPARAGRAPH (II) OF THIS 19
PARAGRAPH , AN ORAL PRESENTATION IS REQUIRED WHEN : 20
1. THE TOTAL VALUE OF T HE CONTRACT IS EXPEC TED 21
TO EXCEED $2,000,000 FOR ARCHITECTURAL AN D ENGINEERING SERVIC ES; 22
2. THE TOTAL VALUE OF T HE CONTRACT IS EXPEC TED 23
TO EXCEED $10,000,000 FOR CONSTRUCTION AND CONSTRUCTION RELATED 24
SERVICES; OR 25
3. FOR ANY OTHER PROCUR EMENT, INCLUDING 26
INFORMATION TECHNOLO GY AND PROFESSIONAL SERVICES, THE TOTAL VALUE OF 27
THE CONTRACT IS EXPE CTED TO EXCEED $5,000,000. 28
(II) IF THE PROCUREMENT OF FICER MAKES A WRITTE N 29
DETERMINATION THAT O RAL PRESENTATIONS AR E UNLIKELY TO AID IN THE 30
EVALUATION PROCESS , ORAL PRESENTATIONS A RE NOT REQUIRED . 31
(g) A unit shall publish notice of a contract in excess of [$50,000] THE SMALL 32
PROCUREMENT AMOUNT S PECIFIED IN § 13–109 OF THIS SUBTITLE awarded under 33 HOUSE BILL 500 15
this section, or a lower amount set by the Board by regulation in accordance with Title 10, 1
Subtitle 1 of the State Government Article in eMaryland Marketplace. 2
13–106. 3
(a) A procurement officer may award a procurement contract on the basis of 4
noncompetitive negotiation if: 5
(2) the procurement is one of a class for which the [Department of Budget 6
and Management] CHIEF PROCUREMENT OFFICER OR THE CHIEF PROCUREMENT 7
OFFICER’S DESIGNEE has approved the use of noncompetitive negotiation; and 8
13–108. 9
(b) (1) Except as provided in § 11–205 (“Collusion”), § 10–204 (“Approval for 10
designated contracts”), § 13–219 (“Required clauses – Nondiscrimination clause”), [§ 11
13–221 (“Disclosures to Secretary of State”),] Title 16 (“Suspension and Debarment of 12
Contractors”), or Title 17 (“Special Provisions – State and Local Subdivisions”) of this 13
article, with the approval of the head of a unit, its procurement officer may make an 14
emergency procurement by any method that the procurement officer considers most 15
appropriate to avoid or mitigate serious damage to public health, safety, or welfare. 16
(8) (i) This paragraph applies only to the award of a contract or a 17
contract modification made under this subsection that, with prior modifications, exceeds 18
[$50,000] THE SMALL PROCUREMEN T AMOUNT SPECIFIED I N § 13–109 OF THIS 19
SUBTITLE. 20
(d) (1) Except as provided in § 11–205 (“Collusion”), § 10–204 (“Approval for 21
designated contracts”), § 13–219 (“Required clauses – Nondiscrimination clause”), 22
[§ 13–221 (“Disclosures to Secretary of State”),] Title 16 (“Suspension and Debarment of 23
Contractors”), or Title 17 (“Special Provisions – State and Local Subdivisions”) of this 24
article, with the approval of the head of the unit and the [Board] CHIEF PROCUREMENT 25
OFFICER OR THE CHIEF PROCUREMENT OFFICER’S DESIGNEE, a unit’s procurement 26
officer may make a procurement on an expedited basis if the head of the unit and the 27
[Board] HEAD OF T HE PRIMARY PROCUREME NT UNIT, HEAD OF THE PRIMARY 28
PROCUREMENT UNIT ’S DESIGNEE, CHIEF PROCUREMENT OFFICER, OR CHIEF 29
PROCUREMENT OFFICER’S DESIGNEE find that: 30
(i) urgent circumstances require prompt action; 31
(ii) an expedited procurement best serves the public interest; and 32
(iii) the need for the expedited procurement outweighs the benefits of 33
making the procurement on the basis of competitive sealed bids or competitive sealed 34
proposals. 35
16 HOUSE BILL 500
(2) The procurement officer shall attempt to obtain as much competition as 1
reasonably possible TO OBTAIN THE BEST V ALUE TO THE STATE WITHIN THE 2
LIMITATIONS REQUIRIN G THE USE OF THE EXP EDITED PROCUREMENT . 3
(3) AFTER AWARDING AN EXP EDITED PROCUREMENT C ONTRACT 4
UNDER THIS SUBSECTIO N, A UNIT SHALL REPORT THE EXPEDITED PROCUREMENT 5
CONTRACT AND THE JUS TIFICATION FOR THE C ONTRACT TO THE BOARD. 6
13–109. 7
(F) IF A PRIMARY PROCUREM ENT UNIT DETERMINES THAT A UNIT DOES 8
NOT ADHERE TO THE ES TABLISHED SMALL PROC UREMENT REGULATIONS , THE 9
PRIMARY PROCUREMENT UNIT MAY LIMIT OR RE VOKE A UNIT ’S ABILITY TO 10
CONDUCT SMALL PROCUR EMENTS. 11
13–110. 12
(b) (7) If a primary procurement unit sponsors or participates in an 13
intergovernmental cooperative purchasing agreement, the intergovernmental cooperative 14
purchasing agreement shall be: 15
(i) approved by: 16
1. the [unit] head OF THE PRIMARY PROCU REMENT UNIT 17
OR THE HEAD OF THE P RIMARY PROCUREMENT U NIT’S DESIGNEE; OR 18
2. THE CHIEF PROCUREMENT OFFICER OR THE CHIEF 19
PROCUREMENT OFFICER’S DESIGNEE; and 20
(ii) subject to any other approval required by law. 21
[13–112.1. 22
(a) (1) In this section the following words have the meanings indicated. 23
(2) “Aggregator” means a person that: 24
(i) provides or contracts for environmental outcomes; or 25
(ii) provides or raises capital to finance delivery of environmental 26
outcomes. 27
(3) “Environmental outcome” means a commodity that is modeled or 28
directly measured as a single, quantifiable, and certified unit of improvement to the 29
environment, including a nutrient or carbon benefit. 30
HOUSE BILL 500 17
(4) “Environmental outcomes project” means a project designed to secure 1
environmental outcomes. 2
(5) “Evaluator” means a person other than an aggregator that determines 3
whether environmental outcomes have been achieved based on defined performance 4
measures. 5
(6) “Outcome payment” means the money paid when a pay –for–success 6
contract performance measure is met. 7
(7) “Quantification plan” means a plan in which an aggregator describes: 8
(i) the method that will be used to measure or model environmental 9
outcomes and co–benefits under a pay–for–success contract; 10
(ii) the compliance monitoring that will occur to ensure that the 11
actions proposed in the pay–for–success contract are taken and maintained over the life of 12
the project; 13
(iii) verification steps that will be carried out by the State to confirm 14
model results or accurate measurement of environmental outcomes; and 15
(iv) the timeline for proposed payments under the pay–for–success 16
contract. 17
(b) The General Assembly finds and declares that: 18
(1) pay–for–success contracting shifts the risk of performance to the 19
contractor because government payment is made only on achievement of outcomes; 20
(2) social and environmental impact investment is growing dramatically, 21
and investors are seeking ways to finance and execute pay–for–success contracts in the 22
State to expand the success of Chesapeake Bay restoration efforts and achieve other public 23
outcomes; and 24
(3) it is in the best interest of the State to include pay–for–success 25
contracting as a procurement option, particularly for units responsible for land 26
conservation and environmental protection, enhancement, and restoration. 27
(c) A unit may enter into a pay–for–success contract only if the procurement 28
officer of the unit determines that: 29
(1) the contract will produce estimated financial savings or other 30
quantifiable public benefits for the State; and 31
(2) a substantial portion of the outcome payment due under the contract 32
will be paid only after specific outcomes have been documented. 33 18 HOUSE BILL 500
(d) (1) This subsection applies only to procurements by: 1
(i) the Department of Agriculture; 2
(ii) the Department of the Environment; 3
(iii) the Department of Natural Resources; 4
(iv) the Department of Transportation; 5
(v) the Maryland Environmental Service; and 6
(vi) the Department of General Services. 7
(2) This subsection does not apply to the purchase of nitrogen load 8
reductions with funds from the Clean Water Commerce Account of the Bay Restoration 9
Fund established under § 9–1605.2 of the Environment Article. 10
(3) (i) A unit specified in paragraph (1) of this subsection may enter into 11
a pay–for–success contract with an aggregator to procure: 12
1. delivery of an environmental outcomes project; or 13
2. already certified environmental outcomes. 14
(ii) Other State and local entities may participate in a 15
pay–for–success contract under this subsection in accordance with an intergovernmental 16
cooperative purchasing agreement under § 13–110 of this subtitle. 17
(4) A pay–for–success contract executed under this subsection shall 18
include: 19
(i) a quantification plan approved by the unit; 20
(ii) a statement of the environmental outcomes to be procured under 21
the contract and a description of how defined performance measures will demonstrate 22
progress in achieving these outcomes; 23
(iii) requirements regarding the content and frequency of progress 24
reports regarding the achievement of environmental outcomes; 25
(iv) a methodology for calculating the amount and timing of outcome 26
payments to an aggregator when the evaluator determines that the aggregator has 27
achieved a defined performance measure; 28
HOUSE BILL 500 19
(v) a statement that the basis of payment is the determination of 1
achievement of environmental outcomes by the evaluator and that payments for those 2
outcomes do not require itemized billing or cost documentation by the aggregator; and 3
(vi) terms addressing: 4
1. compliance with State law; 5
2. nondiscrimination in employment; 6
3. contractor indemnification; 7
4. termination for default; and 8
5. the unit’s right to inspect the environmental outcomes 9
project. 10
(5) A pay–for–success contract executed under this subsection may include 11
provisions regarding: 12
(i) long–term maintenance and monitoring of environmental 13
services, including the establishment of a stewardship fund; 14
(ii) a requirement that the unit hold contract funds in a reserve 15
account for outcome payments; 16
(iii) for agriculture services, payment for achievement of baseline 17
water quality requirements for nitrogen, phosphorus, or sediment; or 18
(iv) terminations prior to the first payment under the contract for the 19
purpose of selling environmental outcomes without penalty to another entity or for any 20
other reason. 21
(e) (1) (i) Beginning July 2025 and every 3 years thereafter, the Maryland 22
Environmental Service shall review and evaluate the results of all pay–for–success 23
contracts completed under this section for the previous 3 fiscal years. 24
(ii) The first review conducted under subparagraph (i) of this 25
paragraph shall include a review of all pay–for–success contracts completed under this 26
section between July 1, 2022, and June 30, 2025. 27
(2) The review conducted under paragraph (1) of this subsection shall 28
include: 29
(i) the cost of each project performed under a contract; 30
20 HOUSE BILL 500
(ii) the length of time taken to complete the project, from the date of 1
notice to proceed until completion; 2
(iii) the average cost and project duration for each project type; and 3
(iv) whether each project met the terms of its contract. 4
(3) Each unit that enters into a pay–for–success contract under this section 5
shall execute an agreement with the Maryland Environmental Service to reimburse the 6
Service for each of the unit’s completed contracts the Service reviews under this section. 7
(4) The Maryland Environmental Service shall provide copies of each 8
review conducted under this subsection to: 9
(i) each unit for which the Service reviewed and evaluated a 10
contract; and 11
(ii) in accordance with § 2–1257 of the State Government Article, the 12
Senate Education, Health, and Environmental Affairs Committee, the Senate Budget and 13
Taxation Committee, the House Environment and Transportation Committee, and the 14
House Appropriations Committee.] 15
13–113. 16
(d) (1) THIS SUBSECTIO N DOES NOT APPLY TO A TASK ORDER 17
DESIGNATED AS A SMAL L BUSINESS RESERVE I N ACCORDANCE WITH § 14–502 OF 18
THIS ARTICLE. 19
(2) Except as provided in subsection (f) of this section, if the unit of the 20
Executive Branch expects that the total cost of the services, supplies, or commodities will 21
exceed [$100,000] $500,000, the unit shall issue a solicitation for a task order to all master 22
contractors in the appropriate category established by the designated procurement unit. 23
[(2)] (3) If the unit of the Executive Branch expects that the total cost of 24
the services, supplies, or commodities will [be] EXCEED $100,000 [or less] BUT WILL NOT 25
EXCEED $500,000, the unit shall issue a solicitation for a task order to a minimum of six 26
qualified master contractors ON A ROTATING BASIS FOR MASTER CONTRACTS 27
DESIGNATED BY THE CHIEF PROCUREMENT OFFICER or all master contractors, 28
whichever is less, in the appropriate category established by the designated procurement 29
unit. 30
(4) IF THE UNIT OF THE EXECUTIVE BRANCH EXPECTS THAT T HE 31
TOTAL COST OF THE SE RVICES, SUPPLIES, OR COMMODITIES WILL BE $100,000 OR 32
LESS, THE UNIT SHALL ISSUE A SOLICITATION FOR A TASK ORDER TO A MINIM UM OF 33
THREE QUALIFIED MAST ER CONTRACTORS ON A ROTATING BASIS FOR MASTER 34
CONTRACTS DESIGNATED BY THE CHIEF PROCUREMENT OFFICER OR ALL MASTER 35 HOUSE BILL 500 21
CONTRACTORS , WHICHEVER IS FEWER , IN THE APPROPRIATE C ATEGORY 1
ESTABLISHED BY THE D ESIGNATED PROCU REMENT UNIT . 2
(e) (1) Except as provided in subsection (f) of this section, after a unit of the 3
Executive Branch receives responses from master contractors to a solicitation for a task 4
order, the unit shall evaluate the responses and may select a master contractor based on 5
the response that is determined to be the most advantageous to the State considering the 6
evaluation factors set forth in the task order. 7
(2) EXCEPT AS PROVIDED IN PARAGRAPH (3) OF THIS SUBSECTION , 8
ORAL PRESENTATIONS A RE REQUIRED PRIOR TO SELECTING A MASTE R 9
CONTRACTOR WHEN : 10
(I) THE TOTAL VALUE OF T HE TASK ORDER IS EXP ECTED TO 11
EXCEED $2,000,000 FOR ARCHITECTURAL AN D ENGINEERING SERVIC ES; 12
(II) THE TOTAL VALUE OF T HE TASK ORDER IS EXP ECTED TO 13
EXCEED $10,000,000 FOR CONSTRUCTION AND CONSTRUCTION RELATED SERVICES; 14
OR 15
(III) FOR ALL OTHER PROCUR EMENT, INCLUDING INFORMATIO N 16
TECHNOLOGY AND PROFE SSIONAL SERVICES , WHEN THE TOTAL VALUE OF THE TASK 17
ORDER IS EXPECTED TO EXCEED $5,000,000. 18
(3) IF THE PROCUREMENT OF FICER MAKES A WRITTE N 19
DETERMINATION THAT OR AL PRESENTATIONS ARE UNLIKELY TO AID IN T HE 20
EVALUATION PROCESS , ORAL PRESENTATIONS W ILL NOT BE REQUIRED . 21
(f) The requirements of subsections (c)(2), (d), and [(e)] (E)(1) of this section do 22
not apply to a master contract for construction if the master contract: 23
(1) is awarded through a competitive process in accordance with this 24
subtitle; and 25
(2) states: 26
(i) how task orders will be awarded; and 27
(ii) the maximum number of qualified contractors that will be 28
awarded a master contract for construction. 29
13–206. 30
22 HOUSE BILL 500
(b) If, with the approval of the [Board] CHIEF PROCUREMENT OFFICER OR 1
THE CHIEF PROCUREMENT OFFICER’S DESIGNEE, a unit determines that it is fiscally 2
advantageous or otherwise in the best interests of the State, the unit may: 3
(1) cancel an invitation for bids, a request for proposals, or other 4
solicitation; or 5
(2) reject all bids or proposals. 6
13–207. 7
(a) Except as otherwise provided in this section, a procurement officer may not 8
require a bidder or offeror to provide bid security on a procurement contract if the 9
procurement officer expects the price to be [$100,000 or] less THAN OR EQUAL TO THE 10
SMALL PROCU REMENT AMOUNT SPECIF IED IN § 13–109 OF THIS TITLE. 11
(b) (1) A procurement officer shall require a bidder or offeror to provide bid 12
security on a procurement contract for construction if: 13
(i) the price is expected to exceed [$100,000] THE SMALL 14
PROCURE MENT AMOUNT SPECIFIE D IN § 13–109 OF THIS TITLE; or 15
(ii) [the price is expected to be $100,000 or less but] REQUIRED BY 16
federal law or a condition of federal assistance requires the security. 17
(2) The amount of bid security required for a procurement contract for 18
construction shall be: 19
(i) at least 5% of the bid or price proposal; or 20
(ii) if the bid or price proposal states a rate but not a total price, an 21
amount determined by the procurement officer. 22
(c) (1) A procurement officer may require a bidder or offeror to provide bid 23
security on a procurement contract for services, supplies, or construction related services if 24
the price of the procurement contract is expected to exceed [$50,000] THE SMALL 25
PROCUREMENT AMOUNT S PECIFIED IN § 13–109 OF THIS TITLE. 26
13–216. 27
(a) Except as provided in subsection (b) of this section, a procurement officer may 28
not require a contractor to provide a performance bond, payment bond, or other security on 29
a procurement contract for construction, construction related services, services, or supplies 30
if the price of the procurement contract is [$100,000 or] less THAN OR EQUAL TO THE 31
SMALL PROCUREMENT AM OUNT SPECIFIED IN § 13–109 OF THIS TITLE. 32
HOUSE BILL 500 23
(b) A procurement officer shall require a contractor to provide a performance 1
bond, payment bond, or other security if federal law or a condition of federal assistance 2
requires the security. 3
(c) If the price of a procurement contract for construction exceeds [$100,000] THE 4
SMALL PROCUREMENT AM OUNT SPECIFIED IN § 13–109 OF THIS TITLE FOR 5
CONSTRUCTION , a procurement officer shall require a contractor to provide security as 6
required under Title 17, Subtitle 1 of this article. 7
(d) A procurement officer may require a contractor to provide a performance bond 8
or other security on a procurement contract for supplies, services, or construction related 9
services if: 10
(1) circumstances warrant security; and 11
(2) the price of the procurement contract exceeds [$100,000] THE SMALL 12
PROCUREMENT AMOUNT S PECIFIED IN § 13–109 OF THIS TITLE. 13
(e) (1) The Board shall adopt regulations to establish separate surety bond 14
forms for procurement officers to use to require security for: 15
(i) fixed–price contracts; and 16
(ii) multiyear contracts. 17
(2) The form for multiyear contracts shall provide for annual and 18
renewable contracts. 19
13–228. 20
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 21
INDICATED. 22
(2) “AGGREGATOR ” MEANS A PERSON THAT : 23
(I) PROVIDES OR CONTRACT S FOR ENVIRONMENTAL 24
OUTCOMES; OR 25
(II) PROVIDES OR RAISES CAPITAL TO FINANCE D ELIVERY OF 26
ENVIRONMENTAL OUTCOM ES. 27
(3) “ENVIRONMENTAL OUTCOME ” MEANS A COMMODITY TH AT IS 28
MODELED OR DIRECTLY MEASURED AS A SINGLE , QUANTIFIABLE , AND CERTIFIED 29
UNIT OF IMPROVEMENT TO THE ENVIRONMENT , INCLUDING A NUTRIENT OR 30
CARBON BEN EFIT. 31
24 HOUSE BILL 500
(4) “ENVIRONMENTAL OUTCOME S PROJECT” MEANS A PROJECT 1
DESIGNED TO SECURE E NVIRONMENTAL OUTCOME S. 2
(5) “EVALUATOR” MEANS A PERSON OTHER THAN AN AGGREGATOR 3
THAT DETERMINES WHET HER ENVIRONMENTAL OU TCOMES HAVE BEEN ACH IEVED 4
BASED ON DEFINED PER FORMANCE MEASURES . 5
(6) “OUTCOME PAYMENT ” MEANS THE MONEY PAID WHEN A 6
PAY–FOR–SUCCESS CONTRACT PER FORMANCE MEASURE IS MET. 7
(7) “QUANTIFICATION PLAN ” MEANS A PLAN IN WHIC H AN 8
AGGREGATOR DESCRIBES : 9
(I) THE METHOD THAT WILL BE USED TO MEASURE O R MODEL 10
ENVIRONMENTAL OUTCOM ES AND CO –BENEFITS UNDER A PAY –FOR–SUCCESS 11
CONTRACT; 12
(II) THE COMPLIANCE MONIT ORING THAT WILL OCCU R TO 13
ENSURE THAT THE ACTI ONS PROPOSED IN THE PAY–FOR–SUCCESS CONTRACT ARE 14
TAKEN AND MAINTAINED OVER THE LIFE OF THE PROJECT; 15
(III) VERIFICATION STEPS T HAT WILL BE CARRIED OUT BY THE 16
STATE TO CONFIRM MODE L RESULTS OR ACCURAT E MEASUREMENT OF 17
ENVIRONMENTAL OUTCOM ES; AND 18
(IV) THE TIMELINE FOR PRO POSED PAYMENTS UNDER THE 19
PAY–FOR–SUCCESS CONTRACT . 20
(B) THE GENERAL ASSEMBLY FINDS AND DECLARES THAT : 21
(1) PAY–FOR–SUCCESS CONTRACTING SHIFTS THE RISK OF 22
PERFORMANCE TO THE C ONTRACTOR BECAUSE GO VERNMENT PAYMENT IS MADE 23
ONLY ON ACHIEVEMENT OF OUTCOMES ; 24
(2) SOCIAL AND ENVIRONME NTAL IMPACT INVESTME NT IS GROWING 25
DRAMATICALLY , AND INVESTORS ARE SEEKING WAYS TO FINANCE AND EXECUTE 26
PAY–FOR–SUCCESS CONTRACTS IN THE STATE TO EXPAND THE S UCCESS OF 27
CHESAPEAKE BAY RESTORATION EFFOR TS AND ACHIEVE OTHER PUBLIC 28
OUTCOMES; AND 29
(3) IT IS IN THE BEST IN TEREST OF THE STATE TO INCLUDE 30
PAY–FOR–SUCCESS CON TRACTING AS A CONTRA CTING OPTION, PARTICULARLY FOR 31
UNITS RESPONSIBLE FO R LAND CONSERVATION AND ENVIRONMENTAL 32
PROTECTION , ENHANCEMENT , AND RESTORATION . 33 HOUSE BILL 500 25
(C) A UNIT MAY ENTER INTO A PAY–FOR–SUCCESS CONTRACT ONL Y IF THE 1
PROCUREMENT OFFICER OF THE UNIT DETERM INES THAT: 2
(1) THE CONTRACT WILL PR ODUCE ESTIMATED FINA NCIAL SAVINGS 3
OR OTHER QUANTIFIABL E PUBLIC BENEFITS FO R THE STATE; AND 4
(2) A SUBSTANTIAL PORTIO N OF THE OUTCOME PAY MENT DUE UNDER 5
THE CONTRACT WILL BE PAID ONLY AFTER SPEC IFIC OUTCOMES HAVE B EEN 6
DOCUMENTED . 7
(D) (1) THIS SUBSECTION APPLI ES ONLY TO CONTRACTS BY: 8
(I) THE DEPARTMENT OF AGRICULTURE ; 9
(II) THE DEPARTMENT OF THE ENVIRONMENT ; 10
(III) THE DEPARTMENT OF NATURAL RESOURCES; 11
(IV) THE DEPARTMENT OF TRANSPORTATION ; 12
(V) THE MARYLAND ENVIRONMENTAL SERVICE; AND 13
(VI) THE DEPARTMENT OF GENERAL SERVICES. 14
(2) THIS SUBSECTION DOES NOT APPLY TO THE PUR CHASE OF 15
NITROGEN LOAD REDUCT IONS WITH FUNDS FROM THE CLEAN WATER COMMERCE 16
ACCOUNT OF THE BAY RESTORATION FUND ESTABLISHED UNDE R § 9–1605.2 OF 17
THE ENVIRONMENT ARTICLE. 18
(3) (I) A UNIT SPECIFIED IN PA RAGRAPH (1) OF THIS SUBSECTION 19
MAY ENTER INTO A PAY –FOR–SUCCESS CONTRACT WIT H AN AGGREGATOR TO 20
PURCHASE: 21
1. DELIVERY OF AN ENVIR ONMENTAL OUTCOMES 22
PROJECT; OR 23
2. ALREADY CER TIFIED ENVIRONMENTAL OUTCOMES. 24
(II) OTHER STATE AND LOCAL ENTIT IES MAY PARTICIPATE IN A 25
PAY–FOR–SUCCESS CONTRACT UND ER THIS SUBSECTION I N ACCORDANCE WITH AN 26
INTERGOVERNMENTAL CO OPERATIVE PURCHASING AGREEMENT UNDER § 13–110 27
OF THIS TITLE. 28
26 HOUSE BILL 500
(4) A PAY–FOR–SUCCESS CONTRACT EXE CUTED UNDER THIS 1
SUBSECTION SHALL INC LUDE: 2
(I) A QUANTIFICATION PLA N APPROVED BY THE UN IT; 3
(II) A STATEMENT OF THE E NVIRONMENTAL OUTCOME S TO BE 4
PROCURED UNDER THE C ONTRACT AND A DESCRI PTION OF HOW DEFINED 5
PERFORMANCE MEASURES WILL DEMONSTRATE PRO GRESS IN ACHIEVING T HESE 6
OUTCOMES; 7
(III) REQUIREMENTS REGARDI NG THE CONTENT AND 8
FREQUENCY OF PROGRES S REPORTS REGARDING THE ACHIEVEMENT OF 9
ENVIRONMENTAL OUTCOM ES; 10
(IV) A METHODOLOGY FOR CA LCULATING THE AMOUNT AND 11
TIMING OF OUTC OME PAYMENTS TO AN A GGREGATOR WHEN THE E VALUATOR 12
DETERMINES THAT THE AGGREGATOR HAS ACHIE VED A DEFINED PERFOR MANCE 13
MEASURE; 14
(V) A STATEMENT THAT THE BASIS OF PAYMENT IS THE 15
DETERMINATION OF ACH IEVEMENT OF ENVIRONM ENTAL OUTCOMES BY TH E 16
EVALUATOR AND THA T PAYMENTS FOR THOSE OUTCOMES DO NOT REQU IRE 17
ITEMIZED BILLING OR COST DOCUMENTATION B Y THE AGGREGATOR ; AND 18
(VI) TERMS ADDRESSING : 19
1. COMPLIANCE WITH STATE LAW; 20
2. NONDISCRIMINATION IN EMPLOYMENT ; 21
3. CONTRACTOR INDEMNIFI CATION; 22
4. TERMINATION FOR DEFA ULT; AND 23
5. THE UNIT’S RIGHT TO INSPECT T HE ENVIRONMENTAL 24
OUTCOMES PROJECT . 25
(5) A PAY–FOR–SUCCESS CONTRACT EXE CUTED UNDER THIS 26
SUBSECTION MAY INCLU DE PROVISIONS REGARD ING: 27
(I) LONG–TERM MAINTENANCE AND MONITORING OF 28
ENVIRONM ENTAL SERVICES , INCLUDING THE ESTABL ISHMENT OF A STEWARD SHIP 29
FUND; 30
HOUSE BILL 500 27
(II) A REQUIREMENT THAT T HE UNIT HOLD CONTRAC T FUNDS 1
IN A RESERVE ACCOUNT FOR OUTCOME PAYMENTS ; 2
(III) FOR AGRICULTURE SERV ICES, PAYMENT FOR 3
ACHIEVEMENT OF BASEL INE WATER QUALITY RE QUIREMENTS FOR NITROG EN, 4
PHOSPHORUS , OR SEDIMENT; OR 5
(IV) TERMINATIONS PRIOR T O THE FIRST PAYMENT UNDER THE 6
CONTRACT FOR THE PUR POSE OF SELLING ENVI RONMENTAL OUTCOMES W ITHOUT 7
PENALTY TO ANOTHER E NTITY OR FOR ANY OTH ER REASON. 8
(E) (1) BEGINNING JULY 2025 AND EVERY 3 YEARS THEREAFTER , THE 9
MARYLAND ENVIRONMENTAL SERVICE SHALL REVIEW AND EVALUATE THE 10
RESULTS OF ALL PAY –FOR–SUCCESS CONTRACTS CO MPLETED UNDER THIS S ECTION 11
FOR THE PREVIOUS 3 FISCAL YEARS. 12
(2) THE REVIEW CONDUCTED UNDER PARAGRAPH (1) OF THIS 13
SUBSECTION SHALL INC LUDE: 14
(I) THE COST OF EACH PRO JECT PERFORMED UNDER A 15
CONTRACT; 16
(II) THE LENGTH OF TIME T AKEN TO COMPLETE THE PROJECT, 17
FROM THE DATE OF NOT ICE TO PROCEED UNTIL COMPLETION ; 18
(III) THE AVERAGE COST AND PROJECT DURATION FOR EACH 19
PROJECT TYPE ; AND 20
(IV) WHETHER EACH PROJECT MET THE TERMS OF ITS 21
CONTRACT. 22
(3) EACH UNIT THAT ENTERS INTO A PAY–FOR–SUCCESS CONTRACT 23
UNDER THIS SECTION S HALL EXECUTE AN AGRE EMENT WITH THE MARYLAND 24
ENVIRONMENTAL SERVICE TO REIMBURSE THE MARYLAND ENVIRONMENTAL 25
SERVICE FOR EACH OF T HE UNIT’S COMPLETED CONTRACT S THE MARYLAND 26
ENVIRONMENTAL SERVICE REVIEWS UNDER THIS SECTION. 27
(4) THE MARYLAND ENVIRONMENTAL SERVICE SHALL PROVIDE 28
COPIES OF EACH REVIE W CONDUCTED UNDER TH IS SUBSECTION TO : 29
(I) EACH UNIT FOR WHICH THE MARYLAND ENVIRONMENTAL 30
SERVICE REVIEWED AND EVALUATED A CONTRACT ; AND 31
28 HOUSE BILL 500
(II) IN ACCORDANCE WITH § 2–1257 OF THE STATE 1
GOVERNMENT ARTICLE, THE SENATE COMMITTEE ON EDUCATION, ENERGY, AND 2
THE ENVIRONMENT , THE SENATE BUDGET AND TAXATION COMMITTEE, THE 3
HOUSE ENVIRONMENT AND TRANSPORTATION COMMITTEE, AND THE HOUSE 4
APPROPRIATIONS COMMITTEE. 5
13–229. 6
(A) BEFORE A UNIT AWARDS ANY PROCUREMENT CONT RACT FOR AN 7
AMOUNT ABOVE $500,000, THE RECOMMENDED AWAR DEE MAY BE REQUIRED TO 8
SUBMIT A WORKFORCE DIVERSITY PLAN TO TH E PROCUREMENT OFFICE R. 9
(B) BEFORE A UNIT AWARDS ANY PROCUREMENT CONT RACT FOR AN 10
AMOUNT ABOVE $250,000, THE RECOMMENDED AWAR DEE MAY BE REQUIRED TO 11
SUBMIT A SUPPLIER DI VERSITY PLAN TO THE PROCUREMENT OFFICER . 12
(C) THE GOVERNOR’S OFFICE OF SMALL, MINORITY, AND WOMEN 13
BUSINESS AFFAIRS IN CONSULTATI ON WITH THE OFFICE OF STATE PROCUREMENT 14
SHALL ADOPT REGULATI ONS TO CARRY OUT THI S SECTION THAT INCLU DE: 15
(1) SUGGESTED CONTENT TO BE INCLUDED IN A WOR KFORCE OR 16
SUPPLIER DIVERSITY P LAN; AND 17
(2) GUIDANCE FOR UNITS T O COMPLY WITH THE RE QUIREMENTS OF 18
THIS SECTION. 19
14–106. 20
(a) In this section, “Committee” means the Pricing and Selection Committee for 21
Preferred Providers. 22
(b) There is a Pricing and Selection Committee for Preferred Providers. 23
(c) The Committee consists of the following [5] 6 members: 24
(1) the Secretary of Transportation or a designee; 25
(2) the [Secretary of General Services] CHIEF PROCUREMENT OFFICER 26
or a designee; 27
(3) the Secretary of Public Safety and Correctional Services or a designee; 28
(4) the Assistant Secretary for Vocational Rehabilitation within the State 29
Department of Education or a designee; [and] 30
HOUSE BILL 500 29
(5) the Secretary of Labor or a designee; AND 1
(6) THE SPECIAL SECRETARY FOR THE OFFICE OF SMALL, 2
MINORITY, AND WOMEN BUSINESS AFFAIRS OR A DESIGNEE . 3
14–108. 4
(b) There is an Employment Works Program in the [Department of General 5
Services] GOVERNOR’S OFFICE OF SMALL, MINORITY, AND WOMEN BUSINESS 6
AFFAIRS. 7
(c) The SPECIAL Secretary [of General Services] FOR THE OFFICE OF SMALL, 8
MINORITY, AND WOMEN BUSINESS AFFAIRS shall designate Maryland Works, Inc., or 9
another appropriate coordinating entity, to facilitate the distribution of procurement 10
contracts for supplies and services among community service providers and individual with 11
disability owned businesses. 12
14–203. 13
(a) By regulation, the [Board] SPECIAL SECRETARY FOR THE OFFICE OF 14
SMALL, MINORITY, AND WOMEN BUSINESS AFFAIRS shall specify the criteria that a 15
business must meet to qualify as a small business. 16
14–204. 17
The [Board] SPECIAL SECRETARY FOR THE OFFICE OF SMALL, MINORITY, 18
AND WOMEN BUSINESS AFFAIRS shall adopt regulations to establish procedures for: 19
(1) compiling and maintaining a comprehensive bidder’s list of small 20
businesses; 21
(2) locating potential sources for various construction related services, 22
supplies, and services and affirmatively seeking to locate potential minority business 23
enterprise sources for those construction related services, supplies, and services; 24
(3) helping small businesses to comply with the procedures for bidding on 25
procurement contracts; 26
(4) examining requests for construction related services, supplies, and 27
services to determine when an invitation for bids may be designated for the Small Business 28
Preference Program; 29
(5) bidding for a procurement contract designated for a small business 30
preference; 31
30 HOUSE BILL 500
(6) simplifying procurement specifications and terms, to increase the 1
opportunities for small business participation; 2
(7) investigating the responsibility of bidders on small business 3
preferences; and 4
(8) explaining to a small business the reason for which its bid for a small 5
business preference was rejected. 6
14–205. 7
The Department of Commerce shall help the [Board] SPECIAL SECRETARY FOR 8
THE OFFICE OF SMALL, MINORITY, AND WOMEN BUSINESS AFFAIRS in establishing 9
procedures to carry out § 14–204(1) and (2) of this subtitle. 10
14–302. 11
(a) (1) (ii) 1. The overall percentage goal shall be established on a 12
biennial basis by the Special Secretary for the Office of Small, Minority, and Women 13
Business Affairs, in consultation with the Secretary of Transportation, THE CHIEF 14
PROCUREMENT OFFICER, and the Attorney General. 15
(iii) 1. In consultation with the Secretary of Transportation, THE 16
CHIEF PROCUREMENT OFFICER, and the Attorney General, the Special Secretary for 17
the Office of Small, Minority, and Women Business Affairs shall establish guidelines on a 18
biennial basis for each unit to consider while determining whether to set subgoals for the 19
minority groups listed in § 14–301(k)(1)(i)1, 2, 3, 4, and 6 of this subtitle. 20
(iv) 1. The Special Secretary for the Office of Small, Minority, 21
and Women Business Affairs, in consultation with the Secretary of Transportation, THE 22
CHIEF PROCUREMENT OFFICER, and the Attorney General, shall establish goals and 23
subgoal guidelines that, to the maximum extent feasible, approximate the level of minority 24
business enterprise participation that would be expected in the absence of discrimination. 25
(2) The Special Secretary for the Office of Small, Minority, and Women 26
Business Affairs, in consultation with the Secretary of Transportation, THE CHIEF 27
PROCUREMENT OFFICER, and the Attorney General, shall establish guidelines for each 28
unit to consider when determining the a ppropriate minority business enterprise 29
participation percentage goal for a procurement contract in accordance with paragraph (3) 30
of this subsection. 31
(8) A UNIT MAY CONSIDER AD DING OR INCREASING T HE MINORITY 32
BUSINESS PARTICIPATI ON GOAL ON A PROCURE MENT CONTRACT: 33
(I) AT ANY TIME PRIOR TO CONTRACT EXECUTION ; 34
HOUSE BILL 500 31
(II) AFTER CONTRACT EXECU TION, WHEN DETERMINED TO B E 1
IN THE BEST INTEREST OF THE STATE; OR 2
(III) WHEN THE MINORITY BU SINESS ENTERPRISE 3
PARTICIPATION SCHEDU LE HAS BEEN CREATED OR AMENDED . 4
(8) (I) SUBJECT TO SUBPARAGRA PH (II) OF THIS PARAGRAPH , A 5
UNIT MAY CONSIDER MO DIFYING THE MINORITY BUSINESS PARTICIPATI ON GOAL ON 6
A PROCUREMENT CONTRA CT: 7
1. AT ANY TIME PRIOR TO CONTRACT EXECUTION ; OR 8
2. AFTER CONTRACT EXECU TION, WHEN DETERMINED 9
TO BE IN THE BEST IN TEREST OF THE STATE. 10
(II) BEFORE A UNIT MAY CON SIDER MODIFYING A MI NORITY 11
BUSINESS PARTICIPATI ON GOAL UNDER SUBPAR AGRAPH (I) OF THIS PARAGRAPH , 12
THE UNIT SHALL : 13
1. MAKE A DETERMINATION THAT THERE HAS BEEN A 14
CHANGE IN THE FACTORS ESTABLIS HED UNDER PARAGRAPH (3) OF THIS 15
SUBSECTION; 16
2. USE THE FACTORS ESTA BLISHED UNDER PARAGR APH 17
(3) OF THIS SUBSECTION T O DETERMINE THE PERC ENTAGE MODIFICATION TO THE 18
MINORITY BUSINESS PA RTICIPATION GOAL ; AND 19
3. OBTAIN THE AGREEM ENT OF THE CONTRACTO R, 20
INCLUDING ANY REASON ABLE PRICING CONSIDE RATIONS. 21
[(8)] (9) The Special Secretary for the Office of Small, Minority, and 22
Women Business Affairs shall: 23
(i) in consultation with the Secretary of Transportation, THE 24
CHIEF PROCUREMENT OFFICER, and the Attorney General, establish procedures 25
governing how the participation of minority business enterprise prime contractors is 26
counted toward contract goals; and 27
(ii) notwithstanding § 12–101 of this article, adopt regulations 28
setting forth the procedures established in accordance with this paragraph. 29
[(9)] (10) (i) 1. If a contractor, including a certified minority 30
business enterprise, does not achieve all or a part of the minority business enterprise 31
participation goals on a contract, the unit shall make a finding of whether the contractor 32 32 HOUSE BILL 500
has demonstrated that the contractor took all necessary and reasonable steps to achieve 1
the goals, including compliance with paragraph (7) of this subsection. 2
2. A waiver of any part of the minority business enterprise 3
goals for a contract shall be granted if a contractor provides a reasonable demonstration of 4
good–faith efforts to achieve the goals. 5
(ii) If the unit determines that a waiver should be granted in 6
accordance with subparagraph (i) of this paragraph, the unit may not require the contractor 7
to renegotiate any subcontract in order to achieve a different result. 8
(iii) The head of the unit may waive any of the requirements of this 9
subsection relating to the establishment, use, and waiver of contract goals for a sole source, 10
expedited, or emergency procurement in which the public interest cannot reasonably 11
accommodate use of those requirements. 12
(iv) 1. Except for waivers granted in accordance with 13
subparagraph (iii) of this paragraph, when a waiver determination is made, the unit shall 14
issue the determination in writing. 15
2. The head of the unit shall: 16
A. keep one copy of the waiver determination and the reasons 17
for the determination; and 18
B. forward one copy of the waiver determination to the 19
Governor’s Office of Small, Minority, and Women Business Affairs. 20
(v) On or before July 31 of each year, each unit shall submit directly 21
to the Board of Public Works and the Governor’s Office of Small, Minority, and Women 22
Business Affairs an annual report of waivers requested and waivers granted under this 23
paragraph. 24
(vi) The report required under subparagraph (v) of this paragraph 25
shall contain the following information on those contracts where the unit considered a 26
contractor’s request for waiver of all or a portion of the minority business enterprise goals: 27
1. the contract titles, numbers, and dates; 28
2. the number of waiver requests received; 29
3. the number of waiver requests granted; and 30
4. any other information specifically requested by the Board. 31
HOUSE BILL 500 33
[(10)] (11) (i) [1.] This paragraph applies to a bidder or offeror after 1
submission of a bid or proposal and before the execution of a contract with an expected 2
degree of minority business enterprise participation. 3
[2. If the bidder or offeror determines that a minority 4
business enterprise identified in the minority business enterprise participation schedule 5
has become or will become unavailable or ineligible to perform the work required under the 6
contract, the bidder or offeror shall notify the unit within 72 hours of making the 7
determination.] 8
[(ii) 1. If a minority business enterprise identified in the minority 9
business enterprise participation schedule submitted with a bid or offer has become or will 10
become unavailable or ineligible to perform the work required under the contract, the 11
bidder or offeror may submit a written request with the unit to amend the minority 12
business enterprise participation schedule. 13
2. The request to amend the minority business enterprise 14
participation schedule shall indicate the bidder’s or offeror’s efforts to substitute another 15
certified minority business enterprise to perform the work that the unavailable or ineligible 16
minority business enterprise would have performed. 17
(iii) A minority business enterprise participation schedule may not 18
be amended unless: 19
1. the bidder or offeror provides a satisfactory explanation of 20
the reason for inclusion of the unavailable or ineligible firm on the minority business 21
enterprise participation schedule; and 22
2. the amendment is approved by the unit’s procurement 23
officer after consulting with the unit’s minority business enterprise liaison.] 24
(II) 1. IF A UNIT’S PROCUREMENT OFFICE R DETERMINES 25
THAT A DEFICIENCY EX ISTS IN THE MINORITY BUSINESS ENTERPRISE 26
PARTICIPATION SCHEDU LE, THE PROCUREMENT OFFI CER SHALL NOTIFY THE 27
BIDDER OR OFFEROR OF THE DEFICIENCY AND R EQUIRE THE BIDDER OR OFFEROR 28
TO SUBMIT AN AMENDED MINORITY BUSINESS EN TERPRISE PARTICIPAT ION 29
SCHEDULE WITHIN A RE ASONABLE TIME PERIOD . 30
2. A DETERMINATION UNDER SUBSUBPARAGRAPH 1 OF 31
THIS SUBPARAGRAPH SH ALL BE MADE IN CONSU LTATION WITH THE UNI T’S 32
MINORITY BUSINESS EN TERPRISE LIAISON . 33
3. AS DIRECTED BY THE NO TIFICATION MADE UNDE R 34
SUBSUBPARAGRAPH 1 OF THIS SUBPARAGRAPH , THE BIDDER OR OFFERO R SHALL 35 34 HOUSE BILL 500
SUBMIT AN AMENDED MI NORITY BUSINESS ENTE RPRISE PARTICIPATION SCHEDULE 1
CORRECTING THE DEFIC IENCY IDENTIFIED . 2
[(11)] (12) (i) This paragraph applies after execution of a contract with 3
an expected degree of minority business enterprise participation. 4
(ii) The minority business enterprise participation schedule, 5
including any amendment, shall be attached to and made a part of the executed contract. 6
(iii) 1. A. Except as provided in subsubsubparagraph B of this 7
subsubparagraph, for purposes of this subparagraph, good cause for removal of a certified 8
minority business enterprise after contract execution includes documented 9
nonperformance by the minority business enterprise or election by the certified minority 10
business enterprise to cease work on the contract. 11
B. Failure of a certified minority business enterprise to 12
provide a bond requested by a contractor in violation of § 13–227 of this article may not be 13
considered nonperformance by the minority business enterprise. 14
2. A contractor may not terminate or otherwise cancel the 15
contract of a certified minority business enterprise subcontractor listed in the minority 16
business enterprise participation schedule without showing good cause and obtaining the 17
prior written consent of the minority business enterprise liaison and approval of the head 18
of the unit. 19
3. The unit shall send a copy of the written consent obtained 20
under subsubparagraph 2 of this subparagraph to the Governor’s Office of Small, Minority, 21
and Women Business Affairs. 22
(iv) A minority business enterprise participation schedule may [not] 23
be amended TO ADD TO OR INCREASE MODIFY MINORITY BUSINESS EN TERPRISE 24
PARTICIPATION after the date of contract execution [unless the request is] ONLY IF: 25
1. IT IS IN THE BEST INTEREST OF THE STATE; 26
2. IT IS approved by the head of the unit; and 27
3. the contract is amended. 28
[(12)] (13) If, during the performance of a contract, a certified minority 29
business enterprise contractor or subcontractor becomes ineligible to participate in the 30
Minority Business Enterprise Program because one or more of its owners has a personal 31
net worth that exceeds the amount specified in § 14–301(k)(3) of this subtitle: 32
HOUSE BILL 500 35
(i) that ineligibility alone may not cause the termination of the 1
certified minority business enterprise’s contractual relationship for the remainder of the 2
term of the contract; and 3
(ii) the certified minority business enterprise’s participation under 4
the contract shall continue to be counted toward the program and contract goals. 5
[(13)] (14) (i) Except as provided in subparagraph (ii) of this paragraph, 6
a nonprofit entity participating as a minority business enterprise on a procurement 7
contract awarded by a unit before July 1, 2015, may continue to participate in the contract 8
until the contract expires or otherwise terminates, including all options, renewals, and 9
other extensions. 10
(ii) 1. The nonprofit entity’s participation may not be counted 11
toward achieving the minority business enterprise participation goals in this subsection. 12
2. The unit may not require that a certified minority 13
business enterprise be substituted for the nonprofit entity in order to meet the minority 14
business enterprise goals for the procurement contract. 15
[(14)] (15) (i) For purposes of this paragraph and paragraph [(15)] (16) 16
of this subsection, “regular dealer”: 17
1. means a firm that owns, operates, or maintains a store, a 18
warehouse, or any other establishment in which the materials, supplies, articles, or 19
equipment are of the general character described by the specifications required under the 20
contract and are bought, kept in stock, or regularly sold or leased to the public in the usual 21
course of business; and 22
2. does not include a packager, a broker, a manufacturer’s 23
representative, or any other person that arranges or expedites transactions. 24
(ii) A unit may apply only 60% of the costs of the materials and 25
supplies provided by the certified minority business enterprise if the certified minority 26
business enterprise is a regular dealer for purposes of achieving the minority business 27
enterprise contract goal. 28
[(15)] (16) With respect to materials or supplies purchased from a certified 29
minority business enterprise that is neither a manufacturer nor a regular dealer: 30
(i) a unit may apply the entire amount of fees or commissions 31
charged for assistance in the procurement of the materials and supplies, fees, or 32
transportation charges for the delivery of materials and supplies required on a procurement 33
toward minority business enterprise contract goals, provided a unit determines the fees to 34
be reasonable and not excessive as compared with fees customarily allowed for similar 35
services; and 36
36 HOUSE BILL 500
(ii) a unit may not apply any portion of the costs of the materials and 1
supplies toward minority business enterprise goals. 2
14–303. 3
(a) (1) (ii) The Board shall keep a record of information regarding any 4
waivers requested in accordance with [§ 14–302(a)(9)(i)] § 14–302(A)(10)(I) of this 5
subtitle and subsection (b)(12) of this section and submit a copy of the record to the General 6
Assembly on or before October 1 of each year, in accordance with § 2–1257 of the State 7
Government Article. 8
(b) These regulations shall include: 9
(12) consistent with [§ 14–302(a)(9)] § 14–302(A)(10) of this subtitle, 10
provisions relating to any circumstances under which a unit may waive obligations of the 11
contractor relating to minority business enterprise participation; 12
(13) provisions requiring a [monthly] submission to the unit by minority 13
business enterprises acknowledging all payments received [in the preceding 30 days] OR 14
ANY OTHER INFORMATIO N REQUESTED BASED ON CRITERIA ESTABLISHED BY THE 15
GOVERNOR’S OFFICE OF SMALL, MINORITY, OR WOMEN BUSINESS AFFAIRS under 16
a contract governed by this subtitle; 17
[(17) a requirement that a bid or proposal based on a solicitation with an 18
expected degree of minority business enterprise participation identify the specific 19
commitment of certified minority business enterprises at the time of submission;] 20
[(18)] (17) provisions promoting and providing for the counting and 21
reporting of certified minority business enterprises as prime contractors; 22
[(19)] (18) provisions establishing standards to require a minority business 23
enterprise to perform a commercially useful function on a contract; 24
[(20)] (19) a requirement that each unit work with the Governor’s Office of 25
Small, Minority, and Women Business Affairs to designate certain procurements as being 26
excluded from the requirements of § 14–302(a) of this subtitle; 27
[(21)] (20) provisions promoting and providing for the counting and 28
reporting of minority business enterprises certified as both a woman–owned business and 29
a business owned by a member of an ethnic or racial group in accordance with § 30
14–302(a)(5) of this subtitle; and 31
[(22)] (21) other provisions that the Board considers necessary or 32
appropriate to encourage participation by minority business enterprises and to protect the 33
integrity of the procurement process. 34
HOUSE BILL 500 37
14–401. 1
(a) (1) In this section the following words have the meanings indicated. 2
(5) (i) [“Services”] SUBJECT TO SUBPARAGRA PH (II) OF THIS 3
PARAGRAPH , “SERVICES” has the meaning stated in [§ 11–101(t)(1) and (2)] § 11–101 of 4
this article. 5
(ii) Notwithstanding [§ 11–101(t)(3)] § 11–101 of this article, 6
“services” includes construction related services and energy performance contract services. 7
14–502.1. 8
(a) (1) This section applies to a procurement by any unit or agency of the 9
Executive Branch of State government for goods, supplies, services, maintenance, 10
construction, construction–related services, architectural services, or engineering services. 11
(2) This section does not apply to: 12
(i) procurements made under Subtitle 1 of this title; 13
(ii) procurements involving expenditures of federal dollars, to the 14
extent that inclusion in the small business reserve program conflicts with federal law or 15
grant provisions; 16
[(iii) procurements with a total dollar value under $50,000;] 17
[(iv)] (III) the procurement of human, social, cultural, or educational 18
services; or 19
[(v)] (IV) term and master contracts exempted under subsection (c) 20
of this section. 21
(b) (1) A procurement with a total dollar value [between $50,000 and 22
$500,000] OF $1,000,000 OR LESS shall be designated for the small business reserve. 23
(2) Each unit or agency shall implement this subsection in a manner 24
consistent with all applicable statutes, including the requirements of Subtitle 3 of this title. 25
14–504. 26
(c) The procurement officer of a unit shall award a procurement contract 27
designated for a small business reserve to the small business that submits a responsive bid 28
OR A PROPOSAL THAT I S REASONABLY SUSCEPT IBLE OF BEING SELECT ED FOR 29
AWARD that: 30
38 HOUSE BILL 500
(1) is the lowest bid price; 1
(2) if the invitation for bids so provides, is the lowest evaluated bid price; 2
or 3
(3) is the bid or proposal most favorable to the State within the small 4
business reserve. 5
14–601. 6
(a) In this subtitle the following words have the meanings indicated. 7
(b) “Veteran” [means an individual who is verified as having served on active duty 8
in the armed forces of the United States, other than for training, and was discharged or 9
released under conditions other than dishonorable] HAS THE MEANING STAT ED IN § 10
9–901 OF THE STATE GOVERNMENT ARTICLE. 11
(c) “Veteran–owned small business enterprise” means a for–profit business that: 12
(1) meets the size standards adopted by the United States Small Business 13
Administration in 13 C.F.R. 121.201 and any subsequent revision of that regulation; and 14
(2) is at least 51% owned by one or more individuals who: 15
(i) are veterans; and 16
(ii) control the management and daily operations of the business. 17
14–602. 18
(a) (1) A unit shall structure procurement procedures, consistent with the 19
purposes of this subtitle, to try to achieve or exceed an overall percentage goal of the unit’s 20
total dollar value of procurement contracts to be made directly or indirectly with 21
veteran–owned small business enterprises. 22
(2) The Office of Small, Minority, and Women Business Affairs shall adopt 23
regulations that establish the overall percentage goal. 24
(b) Solicitation documents shall state the expected percentage of veteran–owned 25
small business enterprise participation based, in part, on: 26
(1) the potential contracting opportunities available in the procurement 27
contract, including both prime contracting and subcontracting opportunities, as determined 28
through analysis of the scope of the work presented in the solicitation documents; and 29
(2) the availability of veteran–owned small business enterprises to respond 30
competitively to the potential contracting opportunities. 31 HOUSE BILL 500 39
(C) (1) (I) THIS PARAGRAPH APPLIE S TO A BIDDER OR OFF EROR 1
AFTER SUB MISSION OF A BID OR PROPOSAL AND BEFORE THE EXECUTION OF A 2
CONTRACT WITH AN EXP ECTED DEGREE OF VETE RAN–OWNED SMALL BUSINESS 3
ENTERPRISE PARTICIPA TION. 4
(II) 1. IF A UNIT’S PROCUREMENT OFFICE R DETERMINES 5
THAT A DEFICIENCY EX ISTS IN THE VETERAN –OWNED SMALL BUSINESS ENTERPRISE 6
PARTICIPATION SCHEDU LE, THE PROCUREMENT OFFI CER SHALL NOTIFY THE 7
BIDDER OR OFFEROR OF THE DEFICIENCY AND R EQUIRE THE BIDDER OR OFFEROR 8
TO SUBMIT AN AMENDED VETERAN–OWNED SMALL BUSINESS ENTERPRISE 9
PARTICIPATION SCHEDU LE WITHIN A REASONA BLE TIME PERIOD . 10
2. A DETERMINATION UNDER SUBSUBPARAGRAPH 1 OF 11
THIS SUBPARAGRAPH SH ALL BE MADE IN CONSU LTATION WITH THE UNI T’S 12
VETERAN–OWNED SMALL BUSINESS ENTERPRISE LIAISON . 13
3. AS DIRECTED BY THE NO TIFICATION MADE UNDE R 14
SUBSUBPARAGRAPH 1 OF THIS SUBPARAGRAPH , THE BIDDER OR OFFERO R SHALL 15
SUBMIT AN AMENDED VE TERAN–OWNED SMALL BUSINESS ENTERPRISE 16
PARTICIPATION SCHEDU LE CORRECTING THE DE FICIENCY IDENTIFIED . 17
(2) A UNIT MAY CONSIDER AD DING OR INCREASING T HE 18
VETERAN–OWNED SMALL BUSINESS PARTICIPATION GOAL ON A PROCUR EMENT 19
CONTRACT: 20
(I) AT ANY TIME PRIOR TO CONTRACT EXECUTION ; 21
(II) AFTER CONTRACT EXECU TION, WHEN DETERMINED TO B E 22
IN THE BEST INTEREST OF THE STATE; OR 23
(III) WHEN THE VETERAN –OWNED SMALL BUSINESS 24
ENTERPRISE PARTICIPA TION SCHEDULE HAS BEEN CR EATED OR AMENDED . 25
(2) (I) SUBJECT TO SUBPARAGRA PH (II) OF THIS PARAGRAPH , A 26
UNIT MAY CONSIDER MO DIFYING THE VETERAN –OWNED SMALL BUSINESS 27
PARTICIPATION GOAL O N A PROCUREMENT CONT RACT: 28
1. AT ANY TIME PRIOR TO CONTRACT EXECUTION ; OR 29
2. AFTER CONTRACT EXECU TION, WHEN DETERMINED 30
TO BE IN THE BEST IN TEREST OF THE STATE. 31
40 HOUSE BILL 500
(II) BEFORE A UNIT MAY CON SIDER MODIFYING A 1
VETERAN–OWNED SMALL BUSINESS PARTICIPATION GOAL U NDER SUBPARAGRAPH 2
(I) OF THIS PARAGRAPH , THE UNIT SHALL: 3
1. MAKE A DETERMINATION THAT THERE HAS BEEN A 4
CHANGE IN THE FACTOR S ESTABLISHED UNDER SUBSECTION (B) OF THIS SECTION; 5
2. USE THE FACTORS ESTA BLISHED UNDER SUBSEC TION 6
(B) OF THIS SECTION TO D ETERMINE THE PERCENT AGE MODIFICATION TO THE 7
VETERAN–OWNED SM ALL BUSINESS PARTICI PATION GOAL; AND 8
3. OBTAIN THE AGREEMENT OF THE CONTRACTOR , 9
INCLUDING ANY REASON ABLE PRICING CONSIDE RATIONS. 10
(3) THE VETERAN –OWNED SMALL BUSINESS ENTERPRISE 11
PARTICIPATION SCHEDU LE, INCLUDING ANY AMENDM ENT, SHALL BE ATTACHED TO 12
AND MADE A PART OF T HE EXECUTED CONTRACT . 13
(4) A VETERAN–OWNED SMALL BUSINESS ENTERPRISE 14
PARTICIPATION SCHEDU LE MAY BE AMENDED TO ADD TO OR INCREASE MODIFY THE 15
VETERAN–OWNED SMALL BUSINESS ENTERPRISE PARTICIPA TION AFTER THE DATE 16
OF CONTRACT EXECUTIO N ONLY IF: 17
(I) IT IS IN THE BEST INTEREST OF THE STATE; 18
(II) IT IS APPROVED BY TH E HEAD OF THE UNIT ; AND 19
(III) THE CONTRACT IS AMEN DED. 20
[(c)] (D) The provisions of this subtitle do not apply to a unit’s procurement 21
procedures to the extent that any unit determines that those provisions are in conflict with 22
an applicable federal program. 23
14–602.1. 24
(A) IN THIS SECTION , “VETERAN–OWNED SMALL BUSINESS RESERVE” 25
MEANS THOSE PROCUREM ENTS THAT ARE LIMITE D TO RESPONSES FROM 26
BUSINESSES THAT QUAL IFY AS A VETERAN–OWNED SMALL BUSINESS ENTERPRISE. 27
(B) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , 28
THIS SECTION APPLIES TO ALL PROCUREMENTS BY THE DEPARTMENT OF 29
VETERANS AND MILITARY FAMILIES AND THE MILITARY DEPARTMENT OR ANY 30
UNIT ACTING ON BEHAL F OF THE DEPARTMENT OF VETERANS AND MILITARY 31
FAMILIES OR THE MILITARY DEPARTMENT . 32 HOUSE BILL 500 41
(2) THIS SECTION DOES NOT APPLY TO: 1
(I) PROCUREMENTS MADE UN DER SUBTITLE 1 OF THIS TITLE; 2
OR 3
(II) PROCUREMENTS INVOLVI NG EXPENDITURES OF F EDERAL 4
DOLLARS, TO THE EXTENT THAT THE REQUIR EMENTS IN THIS SECTI ON CONFLICT 5
WITH FEDERAL LAW OR OTHER GRANT PROVISIO NS. 6
(C) NOTWITHSTANDING SUBTITLE 5 OF THIS TITLE, ANY PROCUREMENT BY 7
THE DEPARTMENT OF VETERANS AND MILITARY FAMILIES OR THE MILITARY 8
DEPARTMENT OF GOODS , SUPPLIES, SERVICES, MAINTENANCE , CONSTRUCTION , 9
CONSTRUCTION RELATED SERVICES, ARCHITECTURAL SERVIC ES, AND 10
ENGINEERING SERVICES SHALL BE ELIGIBLE FO R DESIGNATION FOR TH E 11
VETERAN–OWNED SMALL BUSINESS RESERVE. 12
(D) THE GOVERNOR’S OFFICE OF SMALL, MINORITY, AND WOMEN 13
BUSINESS AFFAIRS SHALL: 14
(1) IN CONSULTATION WITH THE CHIEF PROCUREMENT OFFICER 15
AND THE ATTORNEY GENERAL, ESTABLISH STANDARDS AND GUIDELINES FOR 16
PARTICIPATION IN THE VETERAN–OWNED SMALL BUSINESS RESERVE PROGRAM 17
EVERY 5 YEARS; 18
(2) ESTABLISH GUIDEL INES FOR VETERAN –OWNED SMALL BUSINESS 19
RESERVE PROGRAM ADMI NISTRATION; AND 20
(3) COLLECT DATA REGARDI NG THE DEPARTMENT OF VETERANS 21
AND MILITARY FAMILIES’ AND THE MILITARY DEPARTMENT ’S USE OF 22
VETERAN–OWNED SMALL BUSINESS RESERVE VENDORS . 23
SUBTITLE 8. INTERNSHIP AND REGISTERED APPRENTICESHIP PROGRAM. 24
14–801. 25
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 26
INDICATED. 27
(B) “COVERED PROCUREMENT ” MEANS A PROCUREMENT CONTRACT THAT : 28
(1) MEETS THE CRITERIA E STABLISHED BY THE CHIEF 29
PROCUREMENT OFFICER, IN CONSULTATION WITH THE SECRETARY AND, FOR 30 42 HOUSE BILL 500
CONTRACTS SUBJECT TO TITLE 3.5 OF THIS ARTICLE , THE SECRETARY OF 1
INFORMATION TECHNOLOGY , UNDER § 14–802 OF THIS SUBTITLE; AND 2
(2) IS NOT A PUBLIC WORK CONTRACT SUB JECT TO § 17–202 OF THIS 3
ARTICLE. 4
(C) “DEPARTMENT ” MEANS THE MARYLAND DEPARTMENT OF LABOR. 5
(D) “ELIGIBLE INTERNSHIP P ROGRAM” MEANS AN INTERNSHIP PROGRAM 6
THAT REQUIRES A CONT RACTOR OR OTHER ENTI TY TO PROVIDE PAID I NTERNSHIPS 7
THAT MEET STANDARDS ESTABL ISHED BY THE SECRETARY. 8
(E) “REGISTERED APPRENTICE SHIP PROGRAM ” MEANS AN 9
APPRENTICESHIP PROGR AM THAT IS REGISTERE D WITH AND APPROVED BY THE 10
DIVISION OF WORKFORCE DEVELOPMENT AND ADULT LEARNING. 11
(F) “SECRETARY” MEANS THE SECRETARY O F LABOR. 12
14–802. 13
(A) THIS SUBTITLE APPLIES TO A COVERED PROCURE MENT MADE BY A 14
UNIT. 15
(B) A CONTRACTOR AWARDED A COVERED PROCUREMENT WITH AN 16
ESTIMATED TOTAL DOLL AR VALUE OF $1,000,000 OR MORE SHALL UTILIZ E AN 17
ELIGIBLE INTERNSHIP PROGRAM. 18
(C) A CONTRACTOR AWARDED A COV ERED PROCUREMENT SHA LL UTILIZE A 19
REGISTERED APPRENTIC ESHIP PROGRAM . 20
(D) THE CHIEF PROCUREMENT OFFICER, IN CONSULTATION WITH THE 21
SECRETARY AND, FOR CONTRACTS SUBJEC T TO TITLE 3.5 OF THIS ARTICLE , THE 22
SECRETARY OF INFORMATION TECHNOLOG Y: 23
(1) SHALL ADOPT REGULATI ONS ESTABLISHING THE DEFINITION OF 24
“COVERED PROCUREMENT ”; AND 25
(2) MAY ADOPT OTHER REGU LATIONS NECESSARY TO CARRY OUT 26
THIS SUBTITLE, INCLUDING WAIVER PRO CESSES. 27
14–803. 28
(A) A CONTRACTOR THAT SUBM ITS A BID OR PROPOSA L FOR A COVERED 29
PROCUREMENT SHALL PR OVIDE TO A UNIT WRIT TEN VERIFICATION OF : 30 HOUSE BILL 500 43
(1) THE NUMBER OF APPREN TICES OR INTERNS THA T WILL BE 1
UTILIZED THROUGHOUT THE CONTRACT TERM , INCLUDING POTENTIAL RENEWAL 2
OPTIONS; 3
(2) THE WORK TO BE PERFO RMED BY APPRENTICES IN A REGISTERED 4
APPRENTICESHIP PROGR AM OR INTERNS IN AN ELIGIBLE INTERNSHIP PROGRAM; 5
AND 6
(3) THE DURATION OF THE APPRENTICESHIP OR TH E INTERNSHIP. 7
(B) THE WRITTEN VERIFICAT ION REQUIRED UNDER S UBSECTION (A) OF 8
THIS SECTION SHALL B E PROVIDED BEFORE TH E CONTRACTOR MAY BE AWARDE D A 9
CONTRACT FOR A COVER ED PROCUREMENT . 10
14–804. 11
(A) THE SECRETARY IS RESPONSI BLE FOR ENSURING COM PLIANCE WITH 12
THE REQUIREMENTS OF THIS SUBTITLE. 13
(B) THE SECRETARY SHALL ESTAB LISH CRITERIA TO ASS IST UNITS IN 14
ENSURING CONTRACTOR COMPLIANCE WITH THIS SUB TITLE, INCLUDING: 15
(1) PENALTIES FOR A CONT RACTOR’S FAILURE TO USE APP RENTICES 16
OR INTERNS AS PROVID ED IN A BID OR PROPO SAL; AND 17
(2) PROCEDURES FOR REPOR TING ALLEGED VIOLATI ONS OF THIS 18
SUBTITLE. 19
14–805. 20
(A) A CONTRACTOR THAT IS AWARDED A CONTRACT F OR A COVERED 21
PROCUREMENT UNDER TH IS SUBTITLE WHO FAIL S TO USE APPRENTICES FROM A 22
REGISTERED APPRENTIC ESHIP PROGRAM OR INT ERNS FROM AN ELIGIBL E 23
INTERNSHIP PROGRAM A S PROVIDED IN THE BI D OR PROPOSAL SHALL BE LIABLE 24
FOR AN AMOUNT AS SPE CIFIED BY THE CRITERIA ESTABLISHED UNDER § 14–804 OF 25
THIS SUBTITLE. 26
(B) A UNIT SHALL REPORT AL LEGED VIOLATIONS OF THIS SUBTITLE TO THE 27
DEPARTMENT AS SPECIFI ED IN THE CRITERIA E STABLISHED UNDER § 14–804 OF 28
THIS SUBTITLE. 29
(C) THE DEPARTMENT SHALL REPO RT ALLEGED VIOLATIONS OF T HIS 30
SUBTITLE TO THE OFFICE OF THE ATTORNEY GENERAL, WHICH SHALL DETERMIN E 31 44 HOUSE BILL 500
WHETHER TO BRING A C IVIL ACTION AGAINST A PERSON OR BUSINESS FOR A 1
VIOLATION OF THIS SU BTITLE. 2
(D) PENALTIES SHALL BE RE COVERABLE IN CIVIL A CTIONS AND PAID TO 3
THE STATE APPRENTICESHIP TRAINING FUND ESTABLISHED UNDE R § 17–602 OF 4
THIS ARTICLE, UNLESS OTHERWISE REQ UIRED BY FEDERAL LAW . 5
(E) THE SECRETARY MAY FILE SU IT TO ENFORCE THIS S UBTITLE IN ANY 6
COURT OF COMPETENT J URISDICTION. 7
(F) IN AN ACTION FILED UN DER THIS SECTION, THE COURT SHALL REQU IRE 8
THE CONTRACTOR TO PA Y THE AMOUNT REQUIRE D BY SUBSECTION (A) OF THIS 9
SECTION, INCLUDING INTEREST , REASONABLE ATTORNEY ’S FEES, AND COURT 10
COSTS. 11
SUBTITLE 9. GOOD LABOR PRACTICES PREFERENCE EVALUATION FACTOR. 12
14–901. 13
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 14
INDICATED. 15
(B) “COMMISSIONER ” MEANS THE COMMISSIONER OF LABOR AND 16
INDUSTRY. 17
(C) “GOOD LABOR PRACTICES CERTIFIED BUSINESS ” MEANS A BUSINESS 18
THAT MEETS THE QUALI FICATIONS ESTABLISHE D UNDER § 14–903 OF THIS 19
SUBTITLE. 20
(D) “GOOD LABOR PRACTICES PREFERENCE ” MEANS A PREFERENCE 21
ESTABLISHED UNDER § 14–904 OF THIS SUBTITLE APP LIED TO BUSINESSES 22
HOLDING A VALID , CURRENT CERTIFICATIO N OF THEIR GOOD LABO R PRACTICES. 23
(C) “GOOD LABOR PRACTICES EVALUATION FACTOR” MEANS A FACTOR FOR 24
GOOD LABOR PRACTICES THAT WILL BE USED TO EVALUATE TECHNICAL P ROPOSALS 25
RECEIVED FOR PROCURE MENTS BEING CONDUCTE D THROUGH THE COMPET ITIVE 26
SEALED PROPOSALS PRO CUREMENT METHOD UNDE R § 13–104 OF THIS ARTICLE. 27
(E) (D) “PUBLIC BODY” HAS THE MEANING STAT ED IN § 17–201 OF THIS 28
ARTICLE. 29
(F) (E) “PUBLIC WORK CONTRACT ” HAS THE MEANING STAT ED IN § 30
17–201 OF THIS ARTICLE. 31
HOUSE BILL 500 45
14–902. 1
THIS SUBTITLE APPLIES TO: 2
(1) PUBLIC WORK CONTRACT S PROCURED BY A PUBL IC BODY; AND 3
(2) A CONTRACT SUBJECT TO § 18–102 OF THIS ARTICLE. 4
14–903. 5
(A) TO OBTAIN INITIAL CERTI FICATION AS A QUALIFY FOR APPLICAT ION OF 6
THE GOOD LABOR PRACTICES CERTIFIED BUSINESS EVALUATION FACTOR , A 7
BUSINESS MUST ATTEST BY AFFIDAVIT THAT, ON ANY CONTRACT SUBJECT TO THIS 8
SUBTITLE THAT IT IS AWA RDED OR UNDER WHICH IT PERFORMS ANY WORK , THE 9
BUSINESS WILL: 10
(1) DIRECTLY EMPLOY , AS W–2 EMPLOYEES, ALL PERSONS WORKERS 11
PERFORMING WORK TASKS ON BEHALF OF T HE BUSINESS, EXCEPT FOR A PERSON 12
EXEMPT UNDER TITLE 3, SUBTITLE 9 OF THE LABOR AND EMPLOYMENT ARTICLE, 13
UNDER THE CONTRACT ; 14
(2) PAY ALL PERSONS WORKERS BY CHECK OR ELECTRON IC MEANS 15
AS AVAILABLE AND NOT IN CASH OR CASH EQUI VALENT; 16
(3) STRICTLY COMPLY WITH ALL LEGAL OBLIGATION S AS AN 17
EMPLOYER, INCLUDING ITS OBLIGA TIONS AS AN EMPLOYER UNDER TITLE 3, TITLE 18
5, TITLE 8, OR TITLE 9 OF THE LABOR AND EMPLOYMENT ARTICLE AND, AS 19
APPLICABLE, UNDER TITLE 17 OR TITLE 18 OF THIS ARTICLE; 20
(4) PROVIDE ADVANCE WRIT TEN NOTIFICATION TO THE 21
PROCUREMENT AUTHORIT Y AND TO THE MARYLAND DEPARTMENT OF LABOR, 22
DIVISION OF LABOR AND INDUSTRY, IN A FORM TO BE DETE RMINED BY THE 23
COMMISSIONER , OF ANY SUBCONTRACTOR S PERFORMING WORK UN DER THE 24
CONTRACT; 25
(5) PROVIDE WRITTEN NOTI CE OF THE REQUIREMEN TS OF ITEMS (1), 26
(2), AND (3) OF THIS SUBSECTION T O ANY SUBCONTRACTORS PERFORMIN G WORK 27
UNDER THE CONTRACT ; 28
(6) OBTAIN WRITTEN ACKNO WLEDGMENT OF THE NOT ICE PROVIDED 29
IN ITEM (5) OF THIS SUBSECTION A ND OF THE SUBCONTRAC TOR’S AGREEMENT TO 30
ADHERE TO THOSE REQU IREMENTS, TO BE FILED WITH THE COMMISSIONER , IN A 31
FORM AND MANNER DETERMINED BY THE COMMISSIONER ; 32
46 HOUSE BILL 500
(7) SUCCESSFULLY COMPLET E A COMPREHENSIVE CO NSULTATION 1
VISIT BY THE MARYLAND OCCUPATIONAL SAFETY AND HEALTH PROGRAM WITHIN 2
A REASONABLE TIME DE TERMINED BY THE COMMISSIONER , FOLLOWING THE START 3
OF WORK UNDER THE CONTRACT; 4
(8) BE JOINTLY AND SEVER ALLY LIABLE AS AN EM PLOYER FOR ANY 5
VIOLATION OF A SUBCO NTRACTOR UNDER TITLE 3, TITLE 5, TITLE 8, OR TITLE 9 OF 6
THE LABOR AND EMPLOYMENT ARTICLE OR TITLE 17 OR TITLE 18 OF THIS ARTICLE 7
IN CONNECTION WITH T HE SUBCONTRACTO R’S PERFORMANCE OF WOR K UNDER THE 8
CONTRACT; 9
(9) PROMPTLY DISCLOSE TO THE COMMISSIONER , IN A FORM AND 10
MANNER TO BE PRESCRI BED BY THE COMMISSIONER , ANY SUITS, CHARGES, 11
DEMANDS, ORDERS, FINDINGS, OR ADJUDICATIONS MAD E AGAINST IT IN 12
CONNECTION WITH VIOL ATIONS SUBJECT TO ITEM (1), (2), OR (3) OF THIS 13
SUBSECTION OR AGAINS T ANY OF ITS SUBCONT RACTORS AS PROVIDED IN ITEM (8) 14
OF THIS SUBSECTION ; AND 15
(10) ON CONTRACTS SUBJECT TO § 18–102 OF THIS ARTICLE, PROVIDE 16
PROOF THAT THE BUSIN ESS HAS SECURED A PA YMENT BOND SUFFICIENT TO 17
ENSURE PAYMENT OF WA GES TO ALL EMPLOYEES PERFORMING WORK UNDE R THE 18
CONTRACT. 19
(B) (1) A BUSINESS THAT SUBMIT S AN APPLICATION TO THE 20
COMMISSIONER , ON A FORM DEVELOPED BY THE COMMISSIONER , DEMONSTRATING 21
SATISFACTION OF THE CRITERIA LISTED IN SUBSECTION (A) OF THIS SECTION, MAY 22
BE ISSUED A GOOD LAB OR PRACTICES CERTIFI CATION. 23
(2) THE CERTIFICATION IN PARAGRAPH (1) OF THIS SUBSECTION 24
SHALL BE VALID FOR 12 MONTHS FROM THE DATE OF ISSUANCE, PROVIDED THAT 25
THE BUSINESS’S ELIGIBILITY FOR CE RTIFICATION IS MAINTAINED CO NTINUOUSLY 26
DURING THAT PERIOD . 27
(B) A PROCUREMENT OFFICER WHO RECEIVES A PROPO SAL FOR A 28
COMPETITIVE SEALED P ROPOSAL PROCUREMENT THAT IS SUBMITTED WI TH THE 29
AFFIDAVIT DESCRIBED UNDER SUBSECTION (A) OF THIS SECTION SHAL L EVALUATE 30
THE PROPOSAL WITH THE GOOD L ABOR PRACTICES EVALU ATION FACTOR . 31
(3) (C) THE COMMISSIONER SHALL : 32
(I) MAINTAIN A LIST OF A LL BUSINESSES WITH C URRENT, 33
VALID GOOD LABOR PRA CTICES CERTIFICATION ; 34
HOUSE BILL 500 47
(1) MAINTAIN A LIST FOR THE PRECEDING 12 MONTHS OF ALL 1
BUSINESSES THAT HAVE SUBMITTED THE AFFIDAVIT DESCRI BED UNDER 2
SUBSECTION (A) OF THIS SECTION , CONFIRMING ADHERENCE TO GOOD LABOR 3
PRACTICES; 4
(II) (2) PROVIDE THE LIST IN ITEM (I) OF THIS PARAGRAPH 5
(1) OF THIS SUBSECTION TO ALL PROCUREMENT O FFICERS AT LEAST ONC E EVERY 3 6
6 MONTHS AND ON REQUES T; AND 7
(III) (3) PUBLISH THE LIST IN ITEM (I) OF THIS PARAGRAPH 8
(1) OF THIS SUBSECTION ON THE MARYLAND DEPARTMENT OF LABOR’S PUBLIC 9
WEBSITE. 10
(C) A BUSINESS SEEKING TO RENEW ITS C ERTIFICATION FOR AN 11
ADDITIONAL 12–MONTH PERIOD SHALL : 12
(1) PROVIDE AN UPDATED A TTESTATION AT A TIME AND IN A FORM 13
DEVELOPED BY THE COMMISSIONER ; AND 14
(2) PROVIDE ANY ADDITION AL INFORMATION REQUE STED BY THE 15
COMMISSIONER . 16
(D) IF THE COMMISSIONER DETERMINES THAT A BU SINESS IS NOT 17
ELIGIBLE, OR IS NO LONGER ELIG IBLE, FOR CERTIFICATION , THE COMMISSIONER 18
SHALL: 19
(1) REVOKE THE CERTIFICA TION; AND 20
(2) REMOVE THE BUSINESS FROM THE LIST OF GOO D LABOR 21
PRACTICES CERTIFIED BUSINESSES MAINTAINE D UNDER SU BSECTION (B) OF THIS 22
SECTION. 23
(D) IF THE COMMISSIONER DETERMIN ES THAT A BUSINESS I S NOT 24
FOLLOWING GOOD LABOR PRACTICES, AS DESCRIBED IN SUBS ECTION (A) OF THIS 25
SECTION: 26
(1) THE COMMISSIONER SHALL RE MOVE THE BUSINESS FR OM THE 27
LIST MAINTAINED UNDE R SUBSECTION (C)(1) OF THIS SECTION; AND 28
(2) THE BUSINESS MAY NOT BE ELIGIBLE FOR THE GOOD LABOR 29
PRACTICES EVALUATION FACTOR FOR 12 MONTHS FOLLOWING THE 30
DETERMINATION MADE U NDER THIS SUBSECTION . 31
48 HOUSE BILL 500
(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 PRACTIC ES CERTIFIED BUSINES S BY WHICH A 7
RESPONSIVE BID BY A GOOD LABOR PRACTICES CERTIFIED BUSINESS M AY: 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 PRACTIC ES CERTIFIED BUSINES S. 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
(A) A GOOD LABOR PRACTICES EVALUATION FACTOR FO R GOOD LABOR 18
PRACTICES DESCRIBED IN § 14–903(A) OF THIS SUBTITLE SHA LL BE INCLUDED IN 19
THE TECHNICAL EVALUA TION FACTORS FOR COM PETITIVE SEALED PROP OSALS FOR 20
A PROPOSAL SUBMITTED FOR A CONTR ACT DESCRIBED IN § 14–902 OF THIS 21
SUBTITLE. 22
(B) THE GOOD LABOR PRACTI CES EVALUATION FACTO R SHALL BE: 23
(1) IF A POINT SYSTEM IS USED FOR EVALUATION OF PROPOSALS , 10% 24
OF THE TOTAL ALLOCAB LE TECHNICAL POINTS ; OR 25
(2) IF A POINT SYSTEM IS NOT USED FOR EVALUATION OF PROPOS ALS, 26
RANKED IN ITS RELATI VE ORDER OF IMPORTAN CE. 27
14–905. 28
(A) A PERSON MAY NOT ENGAG E IN CONDUCT PROHIBI TED UNDER § 29
14–605(A) OR § 14–606 OF THIS TITLE IN CON NECTION WITH ANY ACT UNDERTAKEN 30
TO OBTAIN, RENEW, MAINTAIN, OR EXERCISE A GOOD LABOR PRACTICES 31
CERTIFICATION . TO QUALIFY FOR A GOO D LABOR PRACTICES EV ALUATION FACTOR . 32 HOUSE BILL 500 49
(B) THE PENALTIES ESTABLI SHED IN §§ 14–605(B) AND (C) AND 14–606 OF 1
THIS TITLE APPLY TO VIOLATIONS OF THIS S UBTITLE. 2
14–906. 3
IN ADDITION TO THE PE NALTIES ESTA BLISHED UNDER § 14–905 OF THIS 4
SUBTITLE, A PERSON THAT WILLFU LLY MISREPRESENTS OR WILLFULLY OMITS ANY 5
MATERIAL MATTER IN C ONNECTION WITH AN AP PLICATION OR REQUIRE D 6
DISCLOSURE FOR PURPO SES OF OBTAINING OR RETAINING A CONTRACT OR 7
SUBCONTRACT UNDER TH IS SUBTITLE MAY BE SUBJECT T O: 8
(1) SUSPENSION OR DEBARM ENT UNDER TITLE 16 OF THIS ARTICLE; 9
OR 10
(2) CIVIL PENALTIES UNDE R THE MARYLAND FALSE CLAIMS ACT. 11
15–103. 12
(A) It is the policy of the State to make a payment under a procurement contract 13
[within 30 days]: 14
(1) WITHIN 30 DAYS after the day on which the payment becomes due 15
[under the procurement contract; or 16
(2) if later, after the day on which] AND the unit receives [an] A PROPER 17
invoice; OR 18
(2) FOR A SMALL BUSINESS RESERVE CONTRACT , WITHIN 15 DAYS 19
AFTER THE DAY ON WHI CH THE PAYMENT BECOM ES DUE AND THE UNIT RECEIVES A 20
PROPER INVOICE . 21
(B) INTEREST SHALL ACCRUE IN ACCORDANCE WITH § 15–104 OF THIS 22
SUBTITLE. 23
15–111. 24
(a) Within 60 days after the end of each fiscal year, each primary procurement 25
unit shall submit to the Chief Procurement Officer a report on each procurement contract 26
that was awarded during the preceding fiscal year, whether the procurement was 27
conducted by the primary procurement unit or subject to review by the primary 28
procurement unit, and: 29
50 HOUSE BILL 500
(1) was exempt from the notice requirements of § 13–103(c) of this article 1
because the procurement officer reasonably expected that the procurement contract would 2
be performed entirely outside this State and the District of Columbia; 3
(2) cost more than [$100,000] THE SMALL PROCUREMEN T AMOUNT 4
SPECIFIED IN § 13–109 OF THIS ARTICLE and was awarded for the procurement of 5
services, construction related services, architectural services, or engineering services; or 6
(3) was awarded on the basis of: 7
(i) § 13–107 of this article (“Sole source procurement”); 8
(ii) § 13–108(a) of this article (“Emergency procurement”); or 9
(iii) § 13–108(c) of this article (“Expedited procurement”). 10
15–112. 11
(e) [Before January 1, 2017, the] THE Board shall propose UPDATED regulations 12
AS NEEDED that provide for an expedited change order process for change orders valued 13
at more than [$50,000] THE SMALL PROCUREMEN T AMOUNT SPECIFIED I N § 13–109 14
OF THIS ARTICLE . 15
15–112.1. 16
(A) IN THIS SECTION , “CONTRACT MODIFICATIO N” MEANS A WRITTEN 17
ALTERATION THAT : 18
(1) AFFECTS SPECIFICATIO NS, DELIVERY POINT , DATE OF DELIVERY , 19
PERIOD OF PERFORMANC E, PRICE, QUANTITY, OR OTHER PROVISIONS OF A 20
PROCUREMENT CONTRACT ; AND 21
(2) IS ACCOMPLISHED BY M UTUAL ACTION OF THE PARTIES TO AN 22
EXISTING PROCUREMENT CONTRACT. 23
(B) THIS SECTION APPLIES TO ALL STATE PROCUREMENT CON TRACTS. 24
(C) A PROCUREMENT OFFICER MAY APPROVE CONTRACT MODIFICATIONS 25
UNDER THE FOLLOWING CONDITIONS: 26
(1) THE CONTRACT MODIFIC ATION DOES NOT MATER IALLY CHANGE 27
THE SCOPE OF WORK ; AND 28
HOUSE BILL 500 51
(2) THE CONTRACT MODIFIC ATION DOES NOT INCRE ASE THE TOTAL 1
VALUE OF THE CONTRAC T TO AN AMOUNT THAT EXCEEDS THE SMALL 2
PROCUREMENT AMOUNT S PECIFIED IN § 13–109 OF THIS ARTICLE. 3
(D) THE PRIMARY PROCUREME NT UNIT, THE CHIEF PROCUREMENT 4
OFFICER, OR THE CHIEF PROCUREMENT OFFICER’S DESIGNEE MAY APPRO VE A 5
CONTRACT MODIFICATIO N UP TO $1,000,000 $200,000 THAT DOES NOT MATERI ALLY 6
CHANGE THE SCOPE OF WORK. 7
(E) A PROCUREMENT OFFICER SHALL DOCUMENT A CON TRACT 8
MODIFICATION MADE UN DER SUBSECTION (C) OR (D) OF THIS SECTION. 9
(F) THE CHIEF PROCUREMENT OFFICER SHALL ESTABLI SH GUIDELINES 10
FOR THE CONTRACT MOD IFICATION PROCESS . 11
17–103. 12
(a) (1) Before a public body awards a construction contract exceeding 13
[$100,000] THE SMALL PROCUREMEN T AMOUNT SPECIFIED I N § 13–109 OF THIS 14
ARTICLE FOR CONSTRUC TION, the contractor shall provide payment security and 15
performance security that meet the requirements of § 17–104 of this subtitle. 16
(2) The security shall be: 17
(i) for performance security, in an amount that the public body 18
considers adequate for its protection; and 19
(ii) for payment security, at least 50% of the total amount payable 20
under the contract. 21
(b) A public body, other than the State or a unit of the State government, may 22
require payment security or performance security for a construction contract if: 23
(1) the contract exceeds [$50,000] $100,000 but does not exceed 24
[$100,000] THE SMALL PROCUREMEN T AMOUNT SPECIFIED I N § 13–109 OF THIS 25
ARTICLE; and 26
(2) the amount of the security does not exceed 50% of the contract amount. 27
17–602. 28
(a) There is a State Apprenticeship Training Fund in the Department. 29
(b) The Fund consists of: 30
52 HOUSE BILL 500
(1) payments made by contractors or subcontractors in accordance with 1
this subtitle and Subtitle 6A of this title; [and] 2
(2) penalties collected as a result of violations of this subtitle and Subtitle 3
6A of this title; AND 4
(3) PENALTIES COLLECTED AS A RESULT OF VIOLA TIONS OF TITLE 5
14, SUBTITLE 8 OF THIS ARTICLE. 6
(e) The Secretary shall use money in the fund to: 7
(1) promote preapprenticeship programs and other workforce development 8
programs in the State’s public secondary schools and community colleges that assist 9
students in preparing for and entering apprenticeship training programs; and 10
(2) pay any costs associated with carrying out the provisions of this subtitle 11
and Subtitle 6A of this title OR TITLE 14, SUBTITLE 8 OF THIS ARTICLE . 12
17–604. 13
(a) A subcontractor that performs work [valued] at [$100,000 or more] A VALUE 14
EXCEEDING THE SMALL PROCUREMENT AMOUNT S PECIFIED IN § 13–109 OF THIS 15
ARTICLE for a covered project shall provide to a unit written verification that: 16
(1) the subcontractor participates in an apprenticeship training program 17
for each covered craft in which it will employ persons for the covered project; 18
(2) the subcontractor will make payments to the Fund; or 19
(3) the subcontractor will make payments in amounts determined under § 20
17–605 of this subtitle to a registered apprenticeship program or to an organization that 21
has registered apprenticeship programs for the purpose of supporting these programs. 22
19–114. 23
Every contract and subcontract shall contain a nondiscrimination clause that [reads 24
as follows] IS SUBSTANTIALLY SIM ILAR TO THE FOLLOWING: 25
“As a condition of entering into this agreement, the company represents and warrants that 26
it will comply with the State’s Commercial Nondiscrimination Policy, as described under 27
Title 19 of the State Finance and Procurement Article of the Annotated Code of Maryland. 28
As part of such compliance, the company may not discriminate on the basis of race, color, 29
religion, ancestry or national origin, sex, age, marital status, sexual orientation, gender 30
identity, or on the basis of disability or other unlawful forms of discrimination in the 31
solicitation, selection, hiring, or commercial treatment of subcontractors, vendors, 32
suppliers, or commercial customers, nor shall the company retaliate against any person for 33 HOUSE BILL 500 53
reporting instances of such discrimination. The company shall provide equal opportunity 1
for subcontractors, vendors, and suppliers to participate in all of its public sector and 2
private sector subcontracting and supply opportunities, provided that nothing contained in 3
this clause shall prohibit or limit otherwise lawful efforts to remedy the effects of 4
marketplace discrimination that have occurred or are occurring in the marketplace. The 5
company understands and agrees that a material violation of this clause shall be considered 6
a material breach of this agreement and may result in termination of this agreement, 7
disqualification of the company from participating in State contracts, or other sanctions. 8
This clause is not enforceable by or for the benefit of, and creates no obligation to, any third 9
party.”. 10
19–116. 11
Every contract that the State enters into shall include LANGUAGE SUBSTANTIAL LY 12
SIMILAR TO the following [language]: 13
“As a condition of entering into this agreement, upon the request of the Commission on 14
Civil Rights, and only after the filing of a complaint against the company under Title 19 of 15
the State Finance and Procurement Article, as amended from time to time, the company 16
agrees to: provide to the State within 60 days after the request a truthful and complete list 17
of the names of all subcontractors, vendors, and suppliers that the company has used in the 18
past 4 years on any of its contracts that were undertaken within the State of Maryland, 19
including the total dollar amount paid by the contractor on each subcontract or supply 20
contract. The company further agrees to cooperate in any investigation conducted by the 21
State pursuant to the State’s Commercial Nondiscrimination Policy as set forth under Title 22
19 of the State Finance and Procurement Article of the Annotated Code of Maryland, to 23
provide any documents relevant to any investigation that is requested by the State. The 24
company understands and agrees that violation of this clause shall be considered a material 25
breach of this agreement and may result in contract termination, disqualification by the 26
State from participating in State contracts, and other sanctions.”. 27
Article – State Government 28
4–113. 29
(a) (1) In this section the following words have the meanings indicated. 30
(2) “Departments” means: 31
(i) the Office of the Comptroller; 32
(ii) the Office of the State Treasurer; 33
(iii) the Department of Budget and Management; 34
(iv) the Department of Information Technology; and 35
54 HOUSE BILL 500
(v) the Department of General Services. 1
(3) “Financial management infrastructure” means the information 2
technology infrastructure that is used to maintain the general ledger and accountancy for 3
the State, including subledger functions that enable the management of all payments and 4
fund transfers throughout the State. 5
(4)
“
21st Century Financial Systems Enterprise” means a modern 6
cloud–based information technology infrastructure. 7
(b) In consultation with a designated representative from the Modernize 8
Maryland Oversight Commission, the departments shall: 9
(5) establish working groups as needed, INCLUDING A WORKING GROUP 10
TO STUDY WHETHER IMM EDIATE OR PROMPT PAY MENT FEATURES CAN BE ADDED 11
TO THE 21ST CENTURY FINANCIAL SYSTEMS ENTERPRISE TO DETERMI NE 12
WHETHER BOTH PRIME C ONTACTORS AND SUBCON TRACTORS ON A STATE 13
PROCUREMENT CONTRACT CAN BE PAID BY THE STATE AT THE SAME TIM E; and 14
Article – State Personnel and Pensions 15
13–401. 16
(a) In this subtitle the following words have the meanings indicated. 17
(c) (1) [“Services”] EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS 18
SUBSECTION, “SERVICES” has the meaning stated in § 11–101 of the State Finance and 19
Procurement Article. 20
(2) “SERVICES” DOES NOT INCLUDE INF ORMATION TECHNOLOGY 21
SERVICES AND CYBERSE CURITY. 22
SECTION 2. AND BE IT FURTHER ENACTED, That, on or before December 1, 23
2025, the Procurement Advisor to the Board of Public Works shall conduct a study of the 24
economic impacts of instituting an in–State preference for Maryland vendors for all State 25
procurements and submit a report of its findings and recommendations to the Board of 26
Public Works and, in accordance with § 2–1257 of the State Government Article, the 27
General Assembly. 28
SECTION 2. 3. AND BE IT FURTHER ENACTED, That the publisher of the 29
Annotated Code of Maryland, in consultation with and subject to the approval of the 30
Department of Legislative Services, shall correct, with no further action required by the 31
General Assembly, cross–references and terminology rendered incorrect by Section 1 of this 32
Act. The publisher shall adequately describe any correction that is made in an editor’s note 33
following the section affected. 34
HOUSE BILL 500 55
SECTION 3. 4. AND BE IT FURTHER ENACTED, That this Act shall take effect 1
October 1, 2025. 2
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.