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.
Italics indicate opposite chamber/conference committee amendments.
*hb0500*
HOUSE BILL 500
P2 (5lr0451)
ENROLLED BILL
— Health and Government Operations/Budget and Taxation —
Introduced 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
Read and Examined by Proofreaders:
_______________________________________________
Proofreader.
_______________________________________________
Proofreader.
Sealed with the Great Seal and presented to the Governor, for his approval this
_______ day of _______________ at ________________________ o’clock, ________M.
______________________________________________
Speaker.
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; requiring the Department of Information Technology to 6
establish a technical procurement team; altering the authority of the Department of 7
Transportation and the Maryland Transportation Authority to engage in 8
procurement for certain supplies and services for transportation–related activities; 9
authorizing the head of a unit or a designee of the head of the unit to designate small 10 2 HOUSE BILL 500
business preferences under certain circumstances; altering certain dollar values at 1
which a unit must publish notice of certain procurements, submit certain reports, 2
and designate a procurement for the small business reserve, at which a procurement 3
officer may require bid security or other security on certain procurements, and at 4
which certain apprenticeship requirements apply; requiring oral presentations for 5
certain procurements under certain circumstances; authorizing the Chief 6
Procurement Officer or the Chief Procurement Officer’s designee to approve the use 7
of noncompetitive negotiation for certain classes of procurements; altering certain 8
authority to authorize a procurement officer to make a procurement on an expedited 9
basis and to approve the cancellation of a solicitation or rejection of bids or proposals; 10
requiring a unit to report certain information to the Board of Public Works after 11
awarding an expedited procurement contract; altering the membership of the Pricing 12
and Selection Committee for Preferred Providers; transferring the Employment 13
Works Program from the Department of General Services to the Office of Small, 14
Minority, and Women Business Affairs; altering certain authority of the Special 15
Secretary for Small, Minority, and Women Business Affairs and of units with regard 16
to the Minority Business Enterprise Program, Small Business Preference Program, 17
Veteran–Owned Small Business Enterprise Program, and Veteran–Owned Small 18
Business Reserve and associated goals; authorizing a primary procurement unit to 19
limit or revoke a unit’s ability to conduct small procurements under certain 20
circumstances; requiring the Board of Public Works to propose updated regulations 21
related to expedited change orders under certain circumstances; authorizing 22
modifications to State contracts under certain circumstances; clarifying that bids 23
and proposals can be considered for procurement contracts designated for a small 24
business reserve; clarifying pay–for–success contracting as a contract type and not a 25
source selection method; authorizing the Chief Procurement Officer, subject to 26
certain approval, to establish additional methods of procurement source selection; 27
requiring an intergovernmental cooperative purchasing agreement to be approved 28
by the primary procurement unit head or designee, or the Chief Procurement Officer 29
or designee; altering certain thresholds for master contracting; requiring a unit to 30
issue a solicitation for a task order to a certain number of contractors under certain 31
circumstances; requiring a contractor to submit a workforce diversity plan or 32
supplier diversity plan with procurements of a certain value; altering a State policy 33
regarding the payment of certain procurement contracts; requiring contractors 34
awarded certain procurements to use a certain internship program or a certain 35
apprenticeship program; establishing a procurement preference evaluation factor for 36
good labor practices certified businesses; requiring certain State departments to 37
establish a working group; requiring the Procurement Advisor to the Board to 38
conduct a certain study relating to instituting an in–State preference; and generally 39
relating to State procurement. 40
BY repealing and reenacting, without amendments, 41
Article – Correctional Services 42
Section 10–101(a) 43
Annotated Code of Maryland 44
(2017 Replacement Volume and 2024 Supplement) 45
HOUSE BILL 500 3
BY repealing and reenacting, with amendments, 1
Article – Correctional Services 2
Section 10–101(c) 3
Annotated Code of Maryland 4
(2017 Replacement Volume and 2024 Supplement) 5
BY repealing and reenacting, without amendments, 6
Article – Election Law 7
Section 2–109(a)(1) 8
Annotated Code of Maryland 9
(2022 Replacement Volume and 2024 Supplement) 10
BY repealing and reenacting, with amendments, 11
Article – Election Law 12
Section 2–109(a)(3) 13
Annotated Code of Maryland 14
(2022 Replacement Volume and 2024 Supplement) 15
BY repealing and reenacting, with amendments, 16
Article – Natural Resources 17
Section 3–103(g)(3)(ii)7. 18
Annotated Code of Maryland 19
(2023 Replacement Volume and 2024 Supplement) 20
BY adding to 21
Article – State Finance and Procurement 22
Section 3.5–205, 11–101(k) and (y), 12–107(b)(2)(i)11. and 12., 13–102(a)(11) and (c), 23
13–104(d)(3), 13–109(f), 13–228, 13–229, 14–302(a)(8), and 14–602.1; 14–801 24
through 14–805 to be under the new subtitle “Subtitle 8. Internship and 25
Registered Apprenticeship Program”; and 14–901 through 14–906 to be under 26
the new subtitle “Subtitle 9. Good Labor Practices Evaluation Factor” 27
Annotated Code of Maryland 28
(2021 Replacement Volume and 2024 Supplement) 29
BY repealing and reenacting, without amendments, 30
Article – State Finance and Procurement 31
Section 4–301(a), 4–316(a), 11–101(a), 12–111(a)(1), 13–101(a), 13–102(b), 14–106(a) 32
and (b), 14–303(b)(17) through (22), 14–401(a)(1), and 17–602(a) 33
Annotated Code of Maryland 34
(2021 Replacement Volume and 2024 Supplement) 35
BY repealing and reenacting, with amendments, 36
Article – State Finance and Procurement 37
Section 4–301(c) and (d), 4–303, 4–314, 11–101(k) through (y), 12–107(b)(2)(i)2. and 38
11., (3), and (4)(v), 12–111(a)(3)(i), 13–101(h) and (i), 13–102(a)(9) and (10), 39
13–102.1(b), 13–103(a)(2)(v), (c)(3), and (f), 13–104(g), 13–106(a)(2), 40
13–108(b)(1) and (8)(i) and (d), 13–110(b)(7), 13–113(d), (e), and (f), 13–206(b), 41 4 HOUSE BILL 500
13–207(a), (b), and (c)(1), 13–216, 14–106(c), 14–108(b) and (c), 14–203(a), 1
14–204, 14–205, 14–302(a)(1)(ii)1., (iii)1., (iv)1., (2), and (8) through (15), 2
14–303(a)(1)(ii) and (b)(12), (13), and (18) through (22) and (13), 14–401(a)(5), 3
14–502.1(a) and (b),14–504(c), 14–601, 14–602, 15–103, 15–111(a), 15–112(e), 4
17–103, 17–602(b) and (e), 17–604(a), 19–114, and 19–116 5
Annotated Code of Maryland 6
(2021 Replacement Volume and 2024 Supplement) 7
BY adding to 8
Article – State Finance and Procurement 9
Section 11–101(k) and (y), 12–107(b)(2)(i)11. and 12., 13–102(a)(11) and (c), 10
13–104(d)(3), 13–109(f), 13–228, 13–229, 14–302(a)(8), and 14–602.1; 14–801 11
through 14–805 to be under the new subtitle “Subtitle 8. Internship and 12
Registered Apprenticeship Program”; and 14–901 through 14–906 to be under 13
the new subtitle “Subtitle 9. Good Labor Practices Preference Evaluation 14
Factor”; and 15–112.1 Evaluation Factor” 15
Annotated Code of Maryland 16
(2021 Replacement Volume and 2024 Supplement) 17
BY repealing 18
Article – State Finance and Procurement 19
Section 12–107(b)(2)(i)10. and (5), 13–101(g), 13–102(a)(11), and 13–112.1, and 20
14–303(b)(17) 21
Annotated Code of Maryland 22
(2021 Replacement Volume and 2024 Supplement) 23
BY repealing and reenacting, without amendments, 24
Article – State Government 25
Section 4–113(a) 26
Annotated Code of Maryland 27
(2021 Replacement Volume and 2024 Supplement) 28
BY repealing and reenacting, with amendments, 29
Article – State Government 30
Section 4–113(b)(5) 31
Annotated Code of Maryland 32
(2021 Replacement Volume and 2024 Supplement) 33
BY repealing and reenacting, without amendments, 34
Article – State Personnel and Pensions 35
Section 13–401(a) 36
Annotated Code of Maryland 37
(2024 Replacement Volume and 2024 Supplement) 38
BY repealing and reenacting, with amendments, 39
Article – State Personnel and Pensions 40
Section 13–401(c) 41 HOUSE BILL 500 5
Annotated Code of Maryland 1
(2024 Replacement Volume and 2024 Supplement) 2
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 3
That the Laws of Maryland read as follows: 4
Article – Correctional Services 5
10–101. 6
(a) In this subtitle the following words have the meanings indicated. 7
(c) “State correctional facility” has the meaning stated in [§ 11–101(w)] § 11–101 8
of the State Finance and Procurement Article. 9
Article – Election Law 10
2–109. 11
(a) (1) In this section the following words have the meanings indicated. 12
(3) “Contract” means an agreement in any form entered into by a 13
governmental entity for a procurement as defined in [§ 11–101(m)(1)] § 11–101 of the State 14
Finance and Procurement Article. 15
Article – Natural Resources 16
3–103. 17
(g) (3) (ii) The Service may procure materials, equipment, services, or 18
supplies by utilizing: 19
7. Pay–for–success contracting under [§ 13–112.1] § 13–228 20
of the State Finance and Procurement Article. 21
Article – State Finance and Procurement 22
3.5–205. 23
(A) THE DEPARTMENT SHALL ESTA BLISH A TECHNICAL PR OCUREMENT 24
TEAM THAT INCLUDES I NDIVIDUALS WITH EXPE RTISE IN TECHNOLOGY 25
PROCUREMENT AND AGIL E PROCUREMENT . 26
(B) THE TECHNICAL PROCURE MENT TEAM: 27
6 HOUSE BILL 500
(1) IN COLLABORATION WIT H THE DEPARTMENT OF GENERAL 1
SERVICES, SHALL DEVELOP MATERI ALS THAT ENCOURAGE C OST–EFFECTIVE AND 2
COST–EFFICIENT INFORMATIO N TECHNOLOGY SERVICE S SPENDING, INCLUDING 3
PROCUREMENT TEMPLATE S, PROCUREMENT CONTRACT S, AND OTHER 4
PROCUREMENT MATERIAL S; AND 5
(2) MAY ASSIST A UNIT OF STATE GOVERNMENT , INCLUDING THE 6
DEPARTMENT OF GENERAL SERVICES, TO PROCURE INFORMATI ON TECHNOLOGY 7
SERVICES, INCLUDING: 8
(I) DRAFTING REQUESTS FO R PROPOSALS; 9
(II) REVIEWING BIDS AND S ELECTING VENDORS ; AND 10
(III) DEVELOPING INFORMATI ON TECHNOLOGY SERVIC E 11
CONTRACTS IN A MANNE R THAT ENCOURAGES CO MPETITION AND FULL 12
PARTICIPATION BY VEN DORS. 13
4–301. 14
(a) In this subtitle the following words have the meanings indicated. 15
(c) (1) “Services” means the rendering of time, effort, or work, rather than the 16
furnishing of a specific physical product other than reports incidental to the required 17
performance. 18
(2) “Services” includes maintenance, construction–related services, 19
architectural services, engineering services, INFORMATION TECHNOLO GY SERVICES, 20
CYBERSECURITY , and the professional, personal, or contractual services provided by 21
attorneys, accountants, physicians, consultants, and other professionals who are 22
independent contractors. 23
(d) “Supplies” means tangible property, including COMMODITIES , 24
INFORMATION TECHNOLO GY HARDWARE AND SOFTWARE , equipment, and materials, 25
AND INTANGIBLE PROPE RTY, INCLUDING INFORMATIO N TECHNOLOGY SOFTWAR E. 26
4–303. 27
The Secretary may delegate any power or duty set forth in Part I or Part II of this 28
subtitle OR DIVISION II OF THIS ARTICLE to the Chief Procurement Officer of the Office 29
of State Procurement. 30
4–314. 31
HOUSE BILL 500 7
At time intervals set by the Secretary OR CHIEF PROCUREMENT OFFICER, each 1
unit that procures supplies under Division II of this article shall send to the Secretary OR 2
CHIEF PROCUREMENT OFFICER estimates of the amount and quality of any needed 3
supplies. 4
4–316. 5
(a) Subject to the initial approval of the Secretary or Chief Procurement Officer, 6
the appropriate purchasing unit for the following entities may use the services of the 7
Department to purchase services, materials, supplies, and equipment: 8
(1) a county; 9
(2) a municipality; 10
(3) a governmental unit in the State; 11
(4) a public or quasi–public agency that: 12
(i) receives State money; and 13
(ii) is exempt from taxation under § 501(c)(3) of the Internal Revenue 14
Code; 15
(5) a private elementary or secondary school that: 16
(i) either has been issued a certificate of approval from the State 17
Board of Education or is accredited by the Association of Independent Schools; and 18
(ii) is exempt from taxation under § 501(c)(3) of the Internal Revenue 19
Code; or 20
(6) a nonpublic institution of higher education as provided under § 17–106 21
of the Education Article. 22
11–101. 23
(a) In this Division II the following words have the meanings indicated unless: 24
(1) the context clearly requires a different meaning; or 25
(2) a different definition is provided for a particular title or provision. 26
(K) “INFORMATION TECHNOLOG Y” HAS THE MEANING STAT ED IN § 3.5–301 27
OF THIS ARTICLE. 28
8 HOUSE BILL 500
[(k)] (L) “Invitation for bids” means any document used for soliciting bids under 1
§ 13–103 of this article. 2
[(l)] (M) “Person” means an individual, receiver, trustee, guardian, personal 3
representative, fiduciary, or representative of any kind and any partnership, firm, 4
association, corporation, or other entity. 5
[(m)] (N) “Primary procurement units” means: 6
(1) the State Treasurer; 7
(2) the Department of General Services; 8
(3) the Department of Transportation; 9
(4) the University System of Maryland; 10
(5) the Maryland Port Commission; 11
(6) the Morgan State University; and 12
(7) the St. Mary’s College of Maryland. 13
[(n)] (O) (1) “Procurement” means the process of: 14
(i) leasing real or personal property as lessee; or 15
(ii) buying or otherwise obtaining supplies, services, construction, 16
construction related services, architectural services, engineering services, or services 17
provided under an energy performance contract. 18
(2) “Procurement” includes the solicitation and award of procurement 19
contracts and all phases of procurement contract administration. 20
[(o)] (P) (1) “Procurement contract” means an agreement in any form entered 21
into by a unit for procurement. 22
(2) “Procurement contract” does not include: 23
(i) a collective bargaining agreement with an employee 24
organization; 25
(ii) an agreement with a contractual employee, as defined in § 26
1–101(d) of the State Personnel and Pensions Article; 27
HOUSE BILL 500 9
(iii) a Medicaid, Judicare, or similar reimbursement contract for 1
which law sets: 2
1. user or recipient eligibility; and 3
2. price payable by the State; or 4
(iv) a Medicaid contract with a managed care organization, as 5
defined in § 15–101(e) of the Health – General Article as to which regulations adopted by 6
the Department establish: 7
1. recipient eligibility; 8
2. minimum qualifications for managed care organizations; 9
and 10
3. criteria for enrolling recipients in managed care 11
organizations. 12
[(p)] (Q) “Procurement officer” means an individual authorized by a unit to: 13
(1) enter into a procurement contract; 14
(2) administer a procurement contract; or 15
(3) make determinations and findings with respect to a procurement 16
contract. 17
[(q)] (R) “Proposal” means a response to any solicitation other than an invitation 18
for bids. 19
[(r)] (S) “Request for proposals” means any document used for soliciting 20
proposals. 21
[(s)] (T) “Responsible bidder or offeror” means a person who: 22
(1) has the capability in all respects to perform fully the requirements for 23
a procurement contract; and 24
(2) possesses the integrity and reliability that will ensure good faith 25
performance. 26
[(t)] (U) “Responsive bid” means a bid that: 27
(1) is submitted under § 13–103 of this article; and 28
10 HOUSE BILL 500
(2) conforms in all material respects to the invitation for bids. 1
[(u)] (V) (1) Except as provided in paragraph (3) of this subsection, “services” 2
means: 3
(i) the labor, time, or effort of a contractor; and 4
(ii) any product or report necessarily associated with the rendering 5
of a service. 6
(2) “Services” includes: 7
(I) services provided by attorneys, accountants, physicians, 8
consultants, and other professionals who are independent contractors; AND 9
(II) INFORMATION TECHNOLO GY SERVICES AND 10
CYBERSECURITY . 11
(3) “Services” does not include: 12
(i) construction related services; 13
(ii) architectural services; 14
(iii) engineering services; or 15
(iv) energy performance contract services. 16
[(v)] (W) “State” means: 17
(1) a state, possession, territory, or commonwealth of the United States; or 18
(2) the District of Columbia. 19
[(w)] (X) (1) “State correctional facilities” means correctional institutions, 20
and all places of correctional confinement, that are located within the State of Maryland 21
and are primarily operated by the Maryland State government. 22
(2) “State correctional facilities” includes Patuxent Institution. 23
(Y) “STATEWIDE CONTRACT ” MEANS A CONT RACT THAT HAS BEEN 24
PROCURED BY A PRIMAR Y PROCUREMENT UNIT T O BE USED BY ANY UNIT OR AN ALL 25
UNITS OR ANY ENTITY LISTED IN § 4–316 OF THIS ARTICLE. 26
[(x)] (Z) (1) “Supplies” means: 27
HOUSE BILL 500 11
(i) insurance; 1
(ii) tangible personal property INCLUDING INFORMATIO N 2
TECHNOLOGY HARDWARE AND SOFTWARE ; 3
(iii) printing; and 4
(iv) services necessarily associated with insurance or tangible 5
personal property. 6
(2) “Supplies” does not include: 7
(i) an interest in real property; or 8
(ii) tangible personal property acquired or used in connection with 9
an energy performance contract. 10
[(y)] (AA) (1) “Unit” means an officer or other entity that is in the Executive 11
Branch of the State government and is authorized by law to enter into a procurement 12
contract. 13
(2) “Unit” does not include: 14
(i) a bistate, multistate, bicounty, or multicounty governmental 15
agency; or 16
(ii) a special tax district, sanitary district, drainage district, soil 17
conservation district, water supply district, or other political subdivision of the State. 18
12–107. 19
(b) Subject to the authority of the Board, jurisdiction over procurement is as 20
follows: 21
(2) the Department of General Services may: 22
(i) engage in or control procurement of: 23
2. supplies, including supplies under Title 4, Subtitle 3 of 24
this article, but excluding insurance[, information processing equipment,] and motor 25
vehicle leases; 26
[10. information processing equipment and associated 27
services, as provided in Title 3.5, Subtitle 3 of this article; and] 28
12 HOUSE BILL 500
[11.] 10. telecommunication equipment, systems, or 1
services, as provided in Title 3.5, Subtitle 4 of this article; 2
11. INFORMATION TECHNOLO GY SYSTEM 3
MODERNIZATION , AS PROVIDED IN TITLE 3.5, SUBTITLE 3 OF THIS ARTICLE; AND 4
12. CYBERSECURITY UPGRAD ES AND MODERNIZATION , 5
AS PROVIDED IN TITLE 3.5, SUBTITLE 3 OF THIS ARTICLE; 6
(3) the Department of Transportation and the Maryland Transportation 7
Authority, without the approval of any of the other primary procurement units, may engage 8
in the procurement of: 9
(i) construction that is related to transportation, as provided in the 10
Transportation Article; 11
(ii) construction related services that are related to transportation, 12
as provided in the Transportation Article; 13
(iii) architectural or engineering services that are related to 14
transportation, under Title 13, Subtitle 3 of this article; 15
(IV) SUPPLIES FOR TRANSPO RTATION–RELATED ACTIVITIES , 16
INCLUDING INFORMATIO N TECHNOLOGY SUPPLIE S THAT ARE SUBJECT T O TITLE 17
3.5 OF THIS ARTICLE, BUT EXCLUDING : 18
1. SUPPLIES FUNDED BY T HE PROCEEDS FROM STATE 19
GENERAL OBLIGATION B ONDS; AND 20
2. INSURANCE; 21
(V) SERVICES FOR TRANSPO RTATION–RELATED ACTIVITIES , 22
INCLUDING INFORMATIO N TECHNOLOGY SERVICE S THAT ARE SUBJECT T O TITLE 23
3.5 OF THIS ARTICLE, BUT EXCLUDIN G BANKING AND FINANC IAL SERVICES UNDER 24
THE AUTHORITY OF THE STATE TREASURER UNDER ITEM (1) OF THIS SUBSECTION ; 25
[(iv)] (VI) rolling stock and other property peculiar to the operation 26
of a transit system, as provided in § 7–403 of the Transportation Article; 27
[(v)] (VII) supplies for aeronautics related activities, including motor 28
vehicles and information processing supplies, but excluding: 29
1. supplies funded by the proceeds from State general 30
obligation bonds; and 31
HOUSE BILL 500 13
2. insurance; and 1
[(vi)] (VIII) services for aeronautics related activities, including 2
information processing services, but excluding banking and financial services under the 3
authority of the State Treasurer under item (1) of this subsection; AND 4
(4) the Maryland Port Commission, without the approval of any of the 5
other primary procurement units, may engage in the procurement of: 6
(v) leases of real property for port related activities unless the lease 7
payments are from the General Fund of the State[; and]. 8
[(5) the Department of General Services, without the approval of any other 9
primary procurement unit, may engage in or control procurement of: 10
(i) information processing equipment, cloud computing equipment, 11
and associated services, as provided in Title 3.5, Subtitle 3 of this article; 12
(ii) information technology system modernization, as provided in 13
Title 3.5, Subtitle 3 of this article; 14
(iii) telecommunication equipment, systems, or services, as provided 15
in Title 3.5, Subtitle 4 of this article; and 16
(iv) cybersecurity upgrades and modernization, as provided in Title 17
3.5, Subtitle 3 of this article.] 18
12–111. 19
(a) (1) In this section the following words have the meanings indicated. 20
(3) (i) Except as provided in subparagraph (ii) of this paragraph, 21
“services” has the meaning stated in [§ 11–101(u)] § 11–101 of this article. 22
13–101. 23
(a) In this subtitle the following words have the meanings indicated. 24
[(g) “Pay–for–success contracting” means a performance–based procurement 25
method through which a unit contracts with an organization to deliver services or 26
commodities in exchange for payment based on the achievement of outcomes.] 27
[(h)] (G) “Person” includes, unless the context requires otherwise: 28
(1) the State; 29
14 HOUSE BILL 500
(2) a county, a municipal corporation, or any other political subdivision; 1
and 2
(3) any unit of the State government or a political subdivision. 3
[(i)] (H) “Task order” means a procurement process in which only those vendors 4
with master contracts may compete to provide the services, supplies, or commodities under 5
the procurement. 6
13–102. 7
(a) The following procurement methods are authorized at the procurement 8
officer’s discretion, where applicable: 9
(9) architectural, engineering, and land surveying services qualification 10
based selection under § 13–112 of this subtitle; OR 11
(10) master contracting under § 13–113 of this subtitle[; or]. 12
[(11) pay–for–success contracting under § 13–112.1 of this subtitle.] 13
(11) A SOURCE SELECTION M ETHOD ESTABLISHED UN DER 14
SUBSECTION (C) OF THIS SECTION. 15
(b) (1) In awarding a procurement contract for human, social, cultural, or 16
educational service, the preferred method is by competitive sealed proposals under § 17
13–104 of this subtitle. 18
(2) In awarding a procurement contract for a lease of real property, the 19
preferred method is by competitive sealed proposals under § 13–105 of this subtitle. 20
(3) Procurement under an intergovernmental cooperative purchasing 21
agreement is appropriate in situations where the State is expected to achieve a better price 22
as the result of economies of scale or to otherwise benefit by purchasing in cooperation with 23
another governmental entity. 24
(C) THE SUBJECT TO APPROVAL B Y THE BOARD, THE CHIEF 25
PROCUREMENT OFFICER MAY ESTABLISH METHODS OF SOURCE SE LECTION IN 26
ADDITION TO THOSE LI STED IN SUBSECTION (A) OF THIS SECTION AND PROVIDE 27
GUIDELINES FOR USAGE . 28
13–102.1. 29
(b) (1) Subject to approval by the Board of Public Works, the Chief 30
Procurement Officer may establish fees for the use of eMaryland Marketplace by an entity 31 HOUSE BILL 500 15
that publishes a notice of a procurement, conducts a procurement, or publishes a notice of 1
award. 2
(2) The Chief Procurement Officer may not charge a unit, as defined in [§ 3
11–101(y)] § 11–101 of this article, a fee under this subsection. 4
13–103. 5
(a) (2) Subject to subsection (b) of this section, an invitation for bids shall 6
include: 7
(v) if the [Secretary of General Services, the Secretary of 8
Transportation, or the Chancellor of the University System of Maryland] HEAD OF THE 9
UNIT OR THE HEAD OF THE UNIT ’S DESIGNEE has so designated, the small business 10
preference. 11
(c) (3) The unit shall publish notice in eMaryland Marketplace at least 20 days 12
before bid opening if: 13
(i) the procurement officer reasonably expects bid prices to exceed 14
[$50,000] THE SMALL PROCUREMEN T AMOUNT SPECIFIED I N § 13–109 OF THIS 15
SUBTITLE or a lower amount set by the Board by regulation in accordance with Title 10, 16
Subtitle 1 of the State Government Article; and 17
(ii) at least part of the procurement contract is to be performed in 18
this State or the District of Columbia. 19
(f) Not more than 30 days after the execution and approval of a procurement 20
contract in excess of [$50,000] THE SMALL PROCUREMEN T AMOUNT SPECIFIED I N § 21
13–109 OF THIS SUBTITLE awarded under this section, or a lower amount set by the Board 22
by regulation in accordance with Title 10, Subtitle 1 of the State Government Article, a unit 23
shall publish notice of the award in eMaryland Marketplace. 24
13–104. 25
(d) (3) (I) EXCEPT AS PROVIDED IN SUBPARAG RAPH (II) OF THIS 26
PARAGRAPH , AN ORAL PRESENTATION IS REQUIRED WHEN : 27
1. THE TOTAL VALUE OF T HE CONTRACT IS EXPEC TED 28
TO EXCEED $2,000,000 FOR ARCHITECTURAL AN D ENGINEERING SERVIC ES; 29
2. THE TOTAL VALUE OF T HE CONTRACT IS EXPEC TED 30
TO EXCEED $10,000,000 FOR CONSTRUCTION AND CONSTRUCTION RELATED 31
SERVICES; OR 32
16 HOUSE BILL 500
3. FOR ANY OTHER PROCUR EMENT, INCLUDING 1
INFORMATION TECHNOLO GY AND PROFESSIONAL SERVICES, THE TOTAL VALUE OF 2
THE CONTRACT IS EXPE CTED TO EXCEED $5,000,000. 3
(II) IF THE PROCUREMENT OFFICER MAKES A WRIT TEN 4
DETERMINATION THAT O RAL PRESENTATIONS AR E UNLIKELY TO AID IN THE 5
EVALUATION PROCESS , ORAL PRESENTATIONS A RE NOT REQUIRED . 6
(g) A unit shall publish notice of a contract in excess of [$50,000] THE SMALL 7
PROCUREMENT AMOUNT S PECIFIED IN § 13–109 OF THIS SUBTITLE awarded under 8
this section, or a lower amount set by the Board by regulation in accordance with Title 10, 9
Subtitle 1 of the State Government Article in eMaryland Marketplace. 10
13–106. 11
(a) A procurement officer may award a procurement contract on the basis of 12
noncompetitive negotiation if: 13
(2) the procurement is one of a class for which the [Department of Budget 14
and Management] CHIEF PROCUREMENT OFFICER OR THE CHIEF PROCUREMENT 15
OFFICER’S DESIGNEE has approved the use of noncompetitive negotiation; and 16
13–108. 17
(b) (1) Except as provided in § 11–205 (“Collusion”), § 10–204 (“Approval for 18
designated contracts”), § 13–219 (“Required clauses – Nondiscrimination clause”), [§ 19
13–221 (“Disclosures to Secretary of State”),] Title 16 (“Suspension and Debarment of 20
Contractors”), or Title 17 (“Special Provisions – State and Local Subdivisions”) of this 21
article, with the approval of the head of a unit, its procurement officer may make an 22
emergency procurement by any method that the procurement officer considers most 23
appropriate to avoid or mitigate serious damage to public health, safety, or welfare. 24
(8) (i) This paragraph applies only to the award of a contract or a 25
contract modification made under this subsection that, with prior modifications, exceeds 26
[$50,000] THE SMALL PROCUREMEN T AMOUNT SPECIFIED I N § 13–109 OF THIS 27
SUBTITLE. 28
(d) (1) Except as provided in § 11–205 (“Collusion”), § 10–204 (“Approval for 29
designated contracts”), § 13–219 (“Required clauses – Nondiscrimination clause”), 30
[§ 13–221 (“Disclosures to Secretary of State”),] Title 16 (“Suspension and Debarment of 31
Contractors”), or Title 17 (“Special Provisions – State and Local Subdivisions”) of this 32
article, with the approval of the head of the unit and the [Board] CHIEF PROCUREMENT 33
OFFICER OR THE CHIEF PROCUREMENT OFFICER’S DESIGNEE, a unit’s procurement 34
officer may make a procurement on an expedited basis if the head of the unit and the 35
[Board] HEAD OF THE PRIMARY PROCUREMENT UNIT, HEAD OF THE PRIMARY 36 HOUSE BILL 500 17
PROCUREMENT UNIT ’S DESIGNEE, CHIEF PROCUREMENT OFFICER, OR CHIEF 1
PROCUREMENT OFFICER’S DESIGNEE find that: 2
(i) urgent circumstances require prompt action; 3
(ii) an expedited procurement best serves the public interest; and 4
(iii) the need for the expedited procurement outweighs the benefits of 5
making the procurement on the basis of competitive sealed bids or competitive sealed 6
proposals. 7
(2) The procurement officer shall attempt to obtain as much competition as 8
reasonably possible TO OBTAIN THE BEST V ALUE TO THE STATE WITHIN THE 9
LIMITATIONS REQUIRIN G THE USE OF THE EXP EDITED PROCUREMENT . 10
(3) AFTER AWARDING AN EXP EDITED PROCUREMENT C ONTRACT 11
UNDER THIS SUBSECTIO N, A UNIT SHALL REPORT THE EXPEDITED PROCUR EMENT 12
CONTRACT AND THE JUSTIFICATIO N FOR THE CONTRACT T O THE BOARD. 13
13–109. 14
(F) IF A PRIMARY PROCUREM ENT UNIT DETERMINES THAT A UNIT DOES 15
NOT ADHERE TO THE ES TABLISHED SMALL PROC UREMENT REGULATIONS , THE 16
PRIMARY PROCUREMENT UNIT MAY LIMIT OR RE VOKE A UNIT ’S ABILITY TO 17
CONDUCT SMALL PROCUR EMENTS. 18
13–110. 19
(b) (7) If a primary procurement unit sponsors or participates in an 20
intergovernmental cooperative purchasing agreement, the intergovernmental cooperative 21
purchasing agreement shall be: 22
(i) approved by: 23
1. the [unit] head OF THE PRIMARY PROCU REMENT UNIT 24
OR THE HEAD OF THE P RIMARY PROCUREMENT U NIT’S DESIGNEE; OR 25
2. THE CHIEF PROCUREMENT OFFICER OR THE CHIEF 26
PROCUREMENT OFFICER’S DESIGNEE; and 27
(ii) subject to any other approval required by law. 28
[13–112.1. 29
(a) (1) In this section the following words have the meanings indicated. 30 18 HOUSE BILL 500
(2) “Aggregator” means a person that: 1
(i) provides or contracts for environmental outcomes; or 2
(ii) provides or raises capital to finance delivery of environmental 3
outcomes. 4
(3) “Environmental outcome” means a commodity that is modeled or 5
directly measured as a single, quantifiable, and certified unit of improvement to the 6
environment, including a nutrient or carbon benefit. 7
(4) “Environmental outcomes project” means a project designed to secure 8
environmental outcomes. 9
(5) “Evaluator” means a person other than an aggregator that determines 10
whether environmental outcomes have been achieved based on defined performance 11
measures. 12
(6) “Outcome payment” means the money paid when a pay–for–success 13
contract performance measure is met. 14
(7) “Quantification plan” means a plan in which an aggregator describes: 15
(i) the method that will be used to measure or model environmental 16
outcomes and co–benefits under a pay–for–success contract; 17
(ii) the compliance monitoring that will occur to ensure that the 18
actions proposed in the pay–for–success contract are taken and maintained over the life of 19
the project; 20
(iii) verification steps that will be carried out by the State to confirm 21
model results or accurate measurement of environmental outcomes; and 22
(iv) the timeline for proposed payments under the pay–for–success 23
contract. 24
(b) The General Assembly finds and declares that: 25
(1) pay–for–success contracting shifts the risk of performance to the 26
contractor because government payment is made only on achievement of outcomes; 27
(2) social and environmental impact investment is growing dramatically, 28
and investors are seeking ways to finance and execute pay–for–success contracts in the 29
State to expand the success of Chesapeake Bay restoration efforts and achieve other public 30
outcomes; and 31
HOUSE BILL 500 19
(3) it is in the best interest of the State to include pay–for–success 1
contracting as a procurement option, particularly for units responsible for land 2
conservation and environmental protection, enhancement, and restoration. 3
(c) A unit may enter into a pay–for–success contract only if the procurement 4
officer of the unit determines that: 5
(1) the contract will produce estimated financial savings or other 6
quantifiable public benefits for the State; and 7
(2) a substantial portion of the outcome payment due under the contract 8
will be paid only after specific outcomes have been documented. 9
(d) (1) This subsection applies only to procurements by: 10
(i) the Department of Agriculture; 11
(ii) the Department of the Environment; 12
(iii) the Department of Natural Resources; 13
(iv) the Department of Transportation; 14
(v) the Maryland Environmental Service; and 15
(vi) the Department of General Services. 16
(2) This subsection does not apply to the purchase of nitrogen load 17
reductions with funds from the Clean Water Commerce Account of the Bay Restoration 18
Fund established under § 9–1605.2 of the Environment Article. 19
(3) (i) A unit specified in paragraph (1) of this subsection may enter into 20
a pay–for–success contract with an aggregator to procure: 21
1. delivery of an environmental outcomes project; or 22
2. already certified environmental outcomes. 23
(ii) Other State and local entities may participate in a 24
pay–for–success contract under this subsection in accordance with an intergovernmental 25
cooperative purchasing agreement under § 13–110 of this subtitle. 26
(4) A pay–for–success contract executed under this subsection shall 27
include: 28
(i) a quantification plan approved by the unit; 29
20 HOUSE BILL 500
(ii) a statement of the environmental outcomes to be procured under 1
the contract and a description of how defined performance measures will demonstrate 2
progress in achieving these outcomes; 3
(iii) requirements regarding the content and frequency of progress 4
reports regarding the achievement of environmental outcomes; 5
(iv) a methodology for calculating the amount and timing of outcome 6
payments to an aggregator when the evaluator determines that the aggregator has 7
achieved a defined performance measure; 8
(v) a statement that the basis of payment is the determination of 9
achievement of environmental outcomes by the evaluator and that payments for those 10
outcomes do not require itemized billing or cost documentation by the aggregator; and 11
(vi) terms addressing: 12
1. compliance with State law; 13
2. nondiscrimination in employment; 14
3. contractor indemnification; 15
4. termination for default; and 16
5. the unit’s right to inspect the environmental outcomes 17
project. 18
(5) A pay–for–success contract executed under this subsection may include 19
provisions regarding: 20
(i) long–term maintenance and monitoring of environmental 21
services, including the establishment of a stewardship fund; 22
(ii) a requirement that the unit hold contract funds in a reserve 23
account for outcome payments; 24
(iii) for agriculture services, payment for achievement of baseline 25
water quality requirements for nitrogen, phosphorus, or sediment; or 26
(iv) terminations prior to the first payment under the contract for the 27
purpose of selling environmental outcomes without penalty to another entity or for any 28
other reason. 29
(e) (1) (i) Beginning July 2025 and every 3 years thereafter, the Maryland 30
Environmental Service shall review and evaluate the results of all pay–for–success 31
contracts completed under this section for the previous 3 fiscal years. 32 HOUSE BILL 500 21
(ii) The first review conducted under subparagraph (i) of this 1
paragraph shall include a review of all pay–for–success contracts completed under this 2
section between July 1, 2022, and June 30, 2025. 3
(2) The review conducted under paragraph (1) of this subsection shall 4
include: 5
(i) the cost of each project performed under a contract; 6
(ii) the length of time taken to complete the project, from the date of 7
notice to proceed until completion; 8
(iii) the average cost and project duration for each project type; and 9
(iv) whether each project met the terms of its contract. 10
(3) Each unit that enters into a pay–for–success contract under this section 11
shall execute an agreement with the Maryland Environmental Service to reimburse the 12
Service for each of the unit’s completed contracts the Service reviews under this section. 13
(4) The Maryland Environmental Service shall provide copies of each 14
review conducted under this subsection to: 15
(i) each unit for which the Service reviewed and evaluated a 16
contract; and 17
(ii) in accordance with § 2–1257 of the State Government Article, the 18
Senate Education, Health, and Environmental Affairs Committee, the Senate Budget and 19
Taxation Committee, the House Environment and Transportation Committee, and the 20
House Appropriations Committee.] 21
13–113. 22
(d) (1) THIS SUBSECTION DOES NOT APPLY TO A TASK ORDER 23
DESIGNATED AS A SMAL L BUSINESS RESERVE I N ACCORDANCE WITH § 14–502 OF 24
THIS ARTICLE. 25
(2) Except as provided in subsection (f) of this section, if the unit of the 26
Executive Branch expects that the total cost of the services, supplies, or commodities will 27
exceed [$100,000] $500,000, the unit shall issue a solicitation for a task order to all master 28
contractors in the appropriate category established by the designated procurement unit. 29
[(2)] (3) If the unit of the Executive Branch expects that the total cost of 30
the services, supplies, or commodities will [be] EXCEED $100,000 [or less] BUT WILL NOT 31
EXCEED $500,000, the unit shall issue a solicitation for a task order to a minimum of six 32 22 HOUSE BILL 500
qualified master contractors ON A ROTATING BASIS FOR MASTER CONTRACTS 1
DESIGNATED BY THE CHIEF PROCUREMENT OFFICER or all master contractors, 2
whichever is less, in the appropriate category established by the designated procurement 3
unit. 4
(4) IF THE UNIT OF THE EXECUTIVE BRANCH EXPECTS THAT T HE 5
TOTAL COST OF THE SERVICES , SUPPLIES, OR COMMODITIES WILL BE $100,000 OR 6
LESS, THE UNIT SHALL ISSUE A SOLICITATION FOR A TASK ORDER TO A MINI MUM OF 7
THREE QUALIFIED MAST ER CONTRACTORS ON A ROTATING BASIS FOR MASTER 8
CONTRACTS DESIGNATED BY THE CHIEF PROCUREMENT OFFICER OR ALL MASTER 9
CONTRACTORS , WHICHEVER IS FEWER , IN THE APPROPRIATE C ATEGORY 10
ESTABLISHED BY THE D ESIGNATED PROCUREMEN T UNIT. 11
(e) (1) Except as provided in subsection (f) of this section, after a unit of the 12
Executive Branch receives responses from master contractors to a solicitation for a task 13
order, the unit shall evaluate the responses and may select a master contractor based on 14
the response that is determined to be the most advantageous to the State considering the 15
evaluation factors set forth in the task order. 16
(2) EXCEPT AS PROVIDED IN PARAGRAPH (3) OF THIS SUBSECTION , 17
ORAL PRESENTATIONS A RE REQUIRED PRIOR TO SELECTING A MASTER 18
CONTRACTOR WHEN : 19
(I) THE TOTAL VALUE OF T HE TASK ORDER IS EXP ECTED TO 20
EXCEED $2,000,000 FOR ARCHITECTURAL AN D ENGINEERING SERVICES ; 21
(II) THE TOTAL VALUE OF T HE TASK ORDER IS EXP ECTED TO 22
EXCEED $10,000,000 FOR CONSTRUCTION AND CONSTRUCTION RELATED SERVICES; 23
OR 24
(III) FOR ALL OTHER PROCUR EMENT, INCLUDING INFORMATIO N 25
TECHNOLOGY AND PROFE SSIONAL SERVICES , WHEN THE TOTAL VALUE OF T HE TASK 26
ORDER IS EXPECTED TO EXCEED $5,000,000. 27
(3) IF THE PROCUREMENT OF FICER MAKES A WRITTE N 28
DETERMINATION THAT O RAL PRESENTATIONS AR E UNLIKELY TO AID IN THE 29
EVALUATION PROCESS , ORAL PRESENTATIONS W ILL NOT BE REQUIRED . 30
(f) The requirements of subsections (c)(2), (d), and [(e)] (E)(1) of this section do 31
not apply to a master contract for construction if the master contract: 32
(1) is awarded through a competitive process in accordance with this 33
subtitle; and 34
(2) states: 35 HOUSE BILL 500 23
(i) how task orders will be awarded; and 1
(ii) the maximum number of qualified contractors that will be 2
awarded a master contract for construction. 3
13–206. 4
(b) If, with the approval of the [Board] CHIEF PROCUREMENT OFFICER OR 5
THE CHIEF PROCUREMENT OFFICER’S DESIGNEE, a unit determines that it is fiscally 6
advantageous or otherwise in the best interests of the State, the unit may: 7
(1) cancel an invitation for bids, a request for proposals, or other 8
solicitation; or 9
(2) reject all bids or proposals. 10
13–207. 11
(a) Except as otherwise provided in this section, a procurement officer may not 12
require a bidder or offeror to provide bid security on a procurement contract if the 13
procurement officer expects the price to be [$100,000 or] less THAN OR EQUAL TO THE 14
SMALL PROCUREMENT AM OUNT SPECIFIED IN § 13–109 OF THIS TITLE. 15
(b) (1) A procurement officer shall require a bidder or offeror to provide bid 16
security on a procurement contract for construction if: 17
(i) the price is expected to exceed [$100,000] THE SMALL 18
PROCUREMENT AMOUNT S PECIFIED IN § 13–109 OF THIS TITLE; or 19
(ii) [the price is expected to be $100,000 or less but] REQUIRED BY 20
federal law or a condition of federal assistance requires the security. 21
(2) The amount of bid security required for a procurement contract for 22
construction shall be: 23
(i) at least 5% of the bid or price proposal; or 24
(ii) if the bid or price proposal states a rate but not a total price, an 25
amount determined by the procurement officer. 26
(c) (1) A procurement officer may require a bidder or offeror to provide bid 27
security on a procurement contract for services, supplies, or construction related services if 28
the price of the procurement contract is expected to exceed [$50,000] THE SMALL 29
PROCUREMENT AMOUNT S PECIFIED IN § 13–109 OF THIS TITLE. 30
24 HOUSE BILL 500
13–216. 1
(a) Except as provided in subsection (b) of this section, a procurement officer may 2
not require a contractor to provide a performance bond, payment bond, or other security on 3
a procurement contract for construction, construction related services, services, or supplies 4
if the price of the procurement contract is [$100,000 or] less THAN OR EQUAL TO THE 5
SMALL PROCUREMENT AM OUNT SPECIFIED IN § 13–109 OF THIS TITLE. 6
(b) A procurement officer shall require a contractor to provide a performance 7
bond, payment bond, or other security if federal law or a condition of federal assistance 8
requires the security. 9
(c) If the price of a procurement contract for construction exceeds [$100,000] THE 10
SMALL PROCUREMENT AM OUNT SPECIFIE D IN § 13–109 OF THIS TITLE FOR 11
CONSTRUCTION , a procurement officer shall require a contractor to provide security as 12
required under Title 17, Subtitle 1 of this article. 13
(d) A procurement officer may require a contractor to provide a performance bond 14
or other security on a procurement contract for supplies, services, or construction related 15
services if: 16
(1) circumstances warrant security; and 17
(2) the price of the procurement contract exceeds [$100,000] THE SMALL 18
PROCUREMENT AMOUNT S PECIFIED IN § 13–109 OF THIS TITLE. 19
(e) (1) The Board shall adopt regulations to establish separate surety bond 20
forms for procurement officers to use to require security for: 21
(i) fixed–price contracts; and 22
(ii) multiyear contracts. 23
(2) The form for multiyear contracts shall provide for annual and 24
renewable contracts. 25
13–228. 26
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 27
INDICATED. 28
(2) “AGGREGATOR ” MEANS A PERSON THAT : 29
(I) PROVIDES OR CONTRACT S FOR ENVIRONMENTAL 30
OUTCOMES; OR 31
HOUSE BILL 500 25
(II) PROVIDES OR RAISES C APITAL TO FINANCE DE LIVERY OF 1
ENVIRONMENTAL OUTCOM ES. 2
(3) “ENVIRONMENTAL OUTCOME ” MEANS A COMMODITY TH AT IS 3
MODELED OR DIRECTLY MEASURED AS A SINGLE , QUANTIFIABLE , AND CERTIFIED 4
UNIT OF IMPROVEMENT TO THE ENVIRONMENT , INCLUDING A NUT RIENT OR 5
CARBON BENEFIT . 6
(4) “ENVIRONMENTAL OUTCOME S PROJECT” MEANS A PROJECT 7
DESIGNED TO SECURE E NVIRONMENTAL OUTCOME S. 8
(5) “EVALUATOR” MEANS A PERSON OTHER THAN AN AGGREGATOR 9
THAT DETERMINES WHET HER ENVIRONMENTAL OU TCOMES HAVE BEEN ACH IEVED 10
BASED ON DEFINED PERFORMANC E MEASURES. 11
(6) “OUTCOME PAYMENT ” MEANS THE MONEY PAID WHEN A 12
PAY–FOR–SUCCESS CONTRACT PER FORMANCE MEASURE IS MET. 13
(7) “QUANTIFICATION PLAN ” MEANS A PLAN IN WHIC H AN 14
AGGREGATOR DESCRIBES : 15
(I) THE METHOD THAT WILL BE USED TO MEASURE OR MODEL 16
ENVIRONMENTAL OUTCOM ES AND CO –BENEFITS UNDER A PAY –FOR–SUCCESS 17
CONTRACT; 18
(II) THE COMPLIANCE MONIT ORING THAT WILL OCCU R TO 19
ENSURE THAT THE ACTI ONS PROPOSED IN THE PAY–FOR–SUCCESS CONTRACT ARE 20
TAKEN AND MAINTAINED OVER THE LIFE OF THE PROJECT; 21
(III) VERIFICATION STEPS T HAT WILL BE CARRIED OUT BY THE 22
STATE TO CONFIRM MODE L RESULTS OR ACCURAT E MEASUREMENT OF 23
ENVIRONMENTAL OUTCOM ES; AND 24
(IV) THE TIMELINE FOR PRO POSED PAYMENTS UNDER THE 25
PAY–FOR–SUCCESS CONTRACT . 26
(B) THE GENERAL ASSEMBLY FINDS AND DEC LARES THAT: 27
(1) PAY–FOR–SUCCESS CONTRACTING SHIFTS THE RISK OF 28
PERFORMANCE TO THE C ONTRACTOR BECAUSE GO VERNMENT PAYMENT IS MADE 29
ONLY ON ACHIEVEMENT OF OUTCOMES ; 30
(2) SOCIAL AND ENVIRONME NTAL IMPACT INVESTME NT IS GROWING 31
DRAMATICALL Y, AND INVESTORS ARE SE EKING WAYS TO FINANC E AND EXECUTE 32 26 HOUSE BILL 500
PAY–FOR–SUCCESS CONTRACTS IN THE STATE TO EXPAND THE S UCCESS OF 1
CHESAPEAKE BAY RESTORATION EFFOR TS AND ACHIEVE OTHER PUBLIC 2
OUTCOMES; AND 3
(3) IT IS IN THE BEST IN TEREST OF THE STATE TO INCLUDE 4
PAY–FOR–SUCCESS CONTRACTING AS A CONTRACTING OPT ION, PARTICULARLY FOR 5
UNITS RESPONSIBLE FO R LAND CONSERVATION AND ENVIRONMENTAL 6
PROTECTION , ENHANCEMENT , AND RESTORATION . 7
(C) A UNIT MAY ENTER INTO A PAY–FOR–SUCCESS CONTRACT ONL Y IF THE 8
PROCUREMENT OFFICER OF THE UNIT DETERMIN ES THAT: 9
(1) THE CONTRACT WILL PR ODUCE ESTIMATED FINA NCIAL SAVINGS 10
OR OTHER QUANTIFIABL E PUBLIC BENEFITS FO R THE STATE; AND 11
(2) A SUBSTANTIAL PORTIO N OF THE OUTCOME PAY MENT DUE UNDER 12
THE CONTRACT WILL BE PAID ONLY AFTER SPEC IFIC OUTCOMES HAVE BEEN 13
DOCUMENTED . 14
(D) (1) THIS SUBSECTION APPLI ES ONLY TO CONTRACTS BY: 15
(I) THE DEPARTMENT OF AGRICULTURE ; 16
(II) THE DEPARTMENT OF THE ENVIRONMENT ; 17
(III) THE DEPARTMENT OF NATURAL RESOURCES; 18
(IV) THE DEPARTMENT OF TRANSPORTATION ; 19
(V) THE MARYLAND ENVIRONMENTAL SERVICE; AND 20
(VI) THE DEPARTMENT OF GENERAL SERVICES. 21
(2) THIS SUBSECTION DOES NOT APPLY TO THE PUR CHASE OF 22
NITROGEN LOAD REDUCT IONS WITH FUNDS FROM THE CLEAN WATER COMMERCE 23
ACCOUNT OF THE BAY RESTORATION FUND ESTABLISHED UNDE R § 9–1605.2 OF 24
THE ENVIRONMENT ARTICLE. 25
(3) (I) A UNIT SPECIFIED IN PA RAGRAPH (1) OF THIS SUBSECTION 26
MAY ENTER INTO A PAY –FOR–SUCCESS CONTRACT WIT H AN AGGREGATOR TO 27
PURCHASE: 28
1. DELIVERY OF AN ENVIR ONMENTAL OUTCOMES 29
PROJECT; OR 30 HOUSE BILL 500 27
2. ALREADY CERTIFIED EN VIRONMENTAL OUTCOMES . 1
(II) OTHER STATE AND LOCAL ENTIT IES MAY PARTICIPATE IN A 2
PAY–FOR–SUCCESS CONTRACT UND ER THIS SUBSECTION I N ACCORDANCE WITH AN 3
INTERGOVERNMENTAL CO OPERATIVE PURCHASING AGREEMENT UNDER § 13–110 4
OF THIS TITLE. 5
(4) A PAY–FOR–SUCCESS CONTRACT EXE CUTED UNDER THIS 6
SUBSECTION SHALL INC LUDE: 7
(I) A QUANTIFICATION PLA N APPROVED BY THE UN IT; 8
(II) A STATEMENT OF THE E NVIRONMENTAL OUTCOME S TO BE 9
PROCURED UNDER THE C ONTRACT AND A DESCRI PTION OF HOW DEFINED 10
PERFORMANCE MEASURES WILL DEMONSTRATE PRO GRESS IN ACHIEVING T HESE 11
OUTCOMES; 12
(III) REQUIREMENTS REGARDI NG THE CONTENT AND 13
FREQUENCY OF PROGRES S REPORTS REGARDING THE ACHIEVEMENT OF 14
ENVIRONMENTAL OUTCOM ES; 15
(IV) A METHODOLOGY FOR CA LCULATING THE AMOUNT AND 16
TIMING OF OUTCOME PA YMENTS TO AN AGGREGA TOR WHEN THE EVALUAT OR 17
DETERMINES THAT THE AGGREGATOR HAS ACHIE VED A DEFINED PERFOR MANCE 18
MEASURE; 19
(V) A STATEMENT THAT THE BASIS OF PAYMENT IS THE 20
DETERMINATION OF ACH IEVEMENT OF ENVIRONM ENTAL OUTC OMES BY THE 21
EVALUATOR AND THAT P AYMENTS FOR THOSE OU TCOMES DO NOT REQUIR E 22
ITEMIZED BILLING OR COST DOCUMENTATION B Y THE AGGREGATOR ; AND 23
(VI) TERMS ADDRESSING : 24
1. COMPLIANCE WITH STATE LAW; 25
2. NONDISCRIMINATION IN EMPLOYMENT ; 26
3. CONTRACTO R INDEMNIFICATION ; 27
4. TERMINATION FOR DEFA ULT; AND 28
5. THE UNIT’S RIGHT TO INSPECT T HE ENVIRONMENTAL 29
OUTCOMES PROJECT . 30 28 HOUSE BILL 500
(5) A PAY–FOR–SUCCESS CONTRACT EXE CUTED UNDER THIS 1
SUBSECTION MAY INCLU DE PROVISIONS REGARD ING: 2
(I) LONG–TERM MAINTENANCE AND MONITORING OF 3
ENVIRONMENTAL SERVIC ES, INCLUDING THE ESTABL ISHMENT OF A STEWARD SHIP 4
FUND; 5
(II) A REQUIREMENT THAT T HE UNIT HOLD CONTRAC T FUNDS 6
IN A RESERVE ACCOUNT FOR OUTCOME PAYMENTS ; 7
(III) FOR AGRICULTURE SERV ICES, PAYMENT FOR 8
ACHIEVEMENT OF BASELINE WATER QUALI TY REQUIREMENTS FOR NITROGEN, 9
PHOSPHORUS , OR SEDIMENT; OR 10
(IV) TERMINATIONS PRIOR T O THE FIRST PAYMENT UNDER THE 11
CONTRACT FOR THE PUR POSE OF SELLING ENVI RONMENTAL OUTCOMES W ITHOUT 12
PENALTY TO ANOTHER E NTITY OR FOR ANY OTH ER REASON. 13
(E) (1) BEGINNING JULY 2025 AND EVERY 3 YEARS THEREAFTER , THE 14
MARYLAND ENVIRONMENTAL SERVICE SHALL REVIEW AND EVALUATE THE 15
RESULTS OF ALL PAY –FOR–SUCCESS CONTRACTS CO MPLETED UNDER THIS S ECTION 16
FOR THE PREVIOUS 3 FISCAL YEARS. 17
(2) THE REVIEW CONDUCTED UNDER PARAGRAPH (1) OF THIS 18
SUBSECTION SHALL INC LUDE: 19
(I) THE COST OF EACH PRO JECT PERFORMED UNDER A 20
CONTRACT; 21
(II) THE LENGTH OF TIME T AKEN TO COMPLETE THE PROJECT, 22
FROM THE DATE OF NOT ICE TO PROCEED UNTIL COMPLETION ; 23
(III) THE AVERAGE COST AN D PROJECT DURATION F OR EACH 24
PROJECT TYPE ; AND 25
(IV) WHETHER EACH PROJECT MET THE TERMS OF ITS 26
CONTRACT. 27
(3) EACH UNIT THAT ENTERS INTO A PAY–FOR–SUCCESS CONTRACT 28
UNDER THIS SECTION S HALL EXECUTE AN AGRE EMENT WITH THE MARYLAND 29
ENVIRONMENTAL SERVICE TO REIMBURSE THE MARYLAND ENVIRONMENTAL 30
SERVICE FOR EACH OF T HE UNIT’S COMPLETED CONTRACT S THE MARYLAND 31
ENVIRONMENTAL SERVICE REVIEWS UNDER THIS SECTION. 32 HOUSE BILL 500 29
(4) THE MARYLAND ENVIRONMENTAL SERVICE SHALL PROVIDE 1
COPIES OF EACH REVIE W CONDUCTED UNDER TH IS SUBSECTION TO: 2
(I) EACH UNIT FOR WHICH THE MARYLAND ENVIRONMENTAL 3
SERVICE REVIEWED AND EVALUATED A CONTRACT ; AND 4
(II) IN ACCORDANCE WITH § 2–1257 OF THE STATE 5
GOVERNMENT ARTICLE, THE SENATE COMMITTEE ON EDUCATION, ENERGY, AND 6
THE ENVIRONMENT , THE SENATE BUDGET AND TAXATION COMMITTEE, THE 7
HOUSE ENVIRONMENT AND TRANSPORTATION COMMITTEE, AND THE HOUSE 8
APPROPRIATIONS COMMITTEE. 9
13–229. 10
(A) BEFORE A UNIT AWARDS ANY PROCUREMENT CONT RACT FOR AN 11
AMOUNT ABOVE $500,000, THE RECOMMENDED AWAR DEE MAY BE REQUIRED TO 12
SUBMIT A WORKFORCE D IVERSITY PLAN TO THE PROCUREMENT OFFICER . 13
(B) BEFORE A UNIT AWARDS ANY PROCUREMENT CONT RACT FOR AN 14
AMOUNT ABOVE $250,000, THE RECOMMENDED AWAR DEE MAY BE REQUIRED TO 15
SUBMIT A SUPPLIER DI VERSITY PLAN TO THE PROCUREMENT OFFICER . 16
(C) THE GOVERNOR’S OFFICE OF SMALL, MINORITY, AND WOMEN 17
BUSINESS AFFAIRS IN CONSULTATI ON WITH THE OFFICE OF STATE PROCUREMENT 18
SHALL ADOPT REGULATI ONS TO CARRY OUT THI S SECTION THAT INCLU DE: 19
(1) SUGGESTED CONTENT TO BE INCLUDED IN A WOR KFORCE OR 20
SUPPLIER DIV ERSITY PLAN; AND 21
(2) GUIDANCE FOR UNITS T O COMPLY WITH THE RE QUIREMENTS OF 22
THIS SECTION. 23
14–106. 24
(a) In this section, “Committee” means the Pricing and Selection Committee for 25
Preferred Providers. 26
(b) There is a Pricing and Selection Committee for Preferred Providers. 27
(c) The Committee consists of the following [5] 6 members: 28
(1) the Secretary of Transportation or a designee; 29
30 HOUSE BILL 500
(2) the [Secretary of General Services] CHIEF PROCUREMENT OFFICER 1
or a designee; 2
(3) the Secretary of Public Safety and Correctional Services or a designee; 3
(4) the Assistant Secretary for Vocational Rehabilitation within the State 4
Department of Education or a designee; [and] 5
(5) the Secretary of Labor or a designee; AND 6
(6) THE SPECIAL SECRETARY FOR THE OFFICE OF SMALL, 7
MINORITY, AND WOMEN BUSINESS AFFAIRS OR A DESIGNEE . 8
14–108. 9
(b) There is an Employment Works Program in the [Department of General 10
Services] GOVERNOR’S OFFICE OF SMALL, MINORITY, AND WOMEN BUSINESS 11
AFFAIRS. 12
(c) The SPECIAL Secretary [of General Services] FOR THE OFFICE OF SMALL, 13
MINORITY, AND WOMEN BUSINESS AFFAIRS shall designate Maryland Works, Inc., or 14
another appropriate coordinating entity, to facilitate the distribution of procurement 15
contracts for supplies and services among community service providers and individual with 16
disability owned businesses. 17
14–203. 18
(a) By regulation, the [Board] SPECIAL SECRETARY FOR THE OFFICE OF 19
SMALL, MINORITY, AND WOMEN BUSINESS AFFAIRS shall specify the criteria that a 20
business must meet to qualify as a small business. 21
14–204. 22
The [Board] SPECIAL SECRETARY FOR THE OFFICE OF SMALL, MINORITY, 23
AND WOMEN BUSINESS AFFAIRS shall adopt regulations to establish procedures for: 24
(1) compiling and maintaining a comprehensive bidder’s list of small 25
businesses; 26
(2) locating potential sources for various construction related services, 27
supplies, and services and affirmatively seeking to locate potential minority business 28
enterprise sources for those construction related services, supplies, and services; 29
(3) helping small businesses to comply with the procedures for bidding on 30
procurement contracts; 31
HOUSE BILL 500 31
(4) examining requests for construction related services, supplies, and 1
services to determine when an invitation for bids may be designated for the Small Business 2
Preference Program; 3
(5) bidding for a procurement contract designated for a small business 4
preference; 5
(6) simplifying procurement specifications and terms, to increase the 6
opportunities for small business participation; 7
(7) investigating the responsibility of bidders on small business 8
preferences; and 9
(8) explaining to a small business the reason for which its bid for a small 10
business preference was rejected. 11
14–205. 12
The Department of Commerce shall help the [Board] SPECIAL SECRETARY FOR 13
THE OFFICE OF SMALL, MINORITY, AND WOMEN BUSINESS AFFAIRS in establishing 14
procedures to carry out § 14–204(1) and (2) of this subtitle. 15
14–302. 16
(a) (1) (ii) 1. The overall percentage goal shall be established on a 17
biennial basis by the Special Secretary for the Office of Small, Minority, and Women 18
Business Affairs, in consultation with the Secretary of Transportation, THE CHIEF 19
PROCUREMENT OFFICER, and the Attorney General. 20
(iii) 1. In consultation with the Secretary of Transportation, THE 21
CHIEF PROCUREMENT OFFICER, and the Attorney General, the Special Secretary for 22
the Office of Small, Minority, and Women Business Affairs shall establish guidelines on a 23
biennial basis for each unit to consider while determining whether to set subgoals for the 24
minority groups listed in § 14–301(k)(1)(i)1, 2, 3, 4, and 6 of this subtitle. 25
(iv) 1. The Special Secretary for the Office of Small, Minority, 26
and Women Business Affairs, in consultation with the Secretary of Transportation, THE 27
CHIEF PROCUREMENT OFFICER, and the Attorney General, shall establish goals and 28
subgoal guidelines that, to the maximum extent feasible, approximate the level of minority 29
business enterprise participation that would be expected in the absence of discrimination. 30
(2) The Special Secretary for the Office of Small, Minority, and Women 31
Business Affairs, in consultation with the Secretary of Transportation, THE CHIEF 32
PROCUREMENT OFFICER, and the Attorney General, shall establish guidelines for each 33
unit to consider when determining the appropriate minority business enterprise 34 32 HOUSE BILL 500
participation percentage goal for a procurement contract in accordance with paragraph (3) 1
of this subsection. 2
(8) A UNIT MAY CONSIDER AD DING OR INCREASING T HE MINORITY 3
BUSINESS PARTICIPATI ON GOAL ON A PROCUREMEN T CONTRACT: 4
(I) AT ANY TIME PRIOR TO CONTRACT EXECUTION ; 5
(II) AFTER CONTRACT EXECU TION, WHEN DETERMINED TO B E 6
IN THE BEST INTEREST OF THE STATE; OR 7
(III) WHEN THE MINORITY BU SINESS ENTERPRISE 8
PARTICIPATION SCHEDU LE HAS BEEN CREATED OR AMEN DED. 9
(8) (I) SUBJECT TO SUBPARAGRA PH (II) OF THIS PARAGRAPH , A 10
UNIT MAY CONSIDER MO DIFYING THE MINORITY BUSINESS PARTICIPATI ON GOAL ON 11
A PROCUREMENT CONTRA CT: 12
1. AT ANY TIME PRIOR TO CONTRACT EXECUTION ; OR 13
2. AFTER CONTRACT EXECUTION , WHEN DETERMINED 14
TO BE IN THE BEST IN TEREST OF THE STATE. 15
(II) BEFORE A UNIT MAY CON SIDER MODIFYING A MI NORITY 16
BUSINESS PARTICIPATI ON GOAL UNDER SUBPAR AGRAPH (I) OF THIS PARAGRAPH , 17
THE UNIT SHALL : 18
1. MAKE A DETERMINATION THAT THERE HAS BEEN A 19
CHANGE IN THE FACTOR S ESTABLISHED UNDER PARAGRAPH (3) OF THIS 20
SUBSECTION; 21
2. USE THE FACTORS ESTA BLISHED UNDER PARAGR APH 22
(3) OF THIS SUBSECTION T O DETERMINE THE PERC ENTAGE MODIFICATION TO THE 23
MINORITY BUSINESS PA RTICIPATION GOAL ; AND 24
3. OBTAIN THE AGREEMENT OF THE CONTRACTOR , 25
INCLUDING ANY REASON ABLE PRICING CONSIDE RATIONS. 26
[(8)] (9) The Special Secretary for the Office of Small, Minority, and 27
Women Business Affairs shall: 28
(i) in consultation with the Secretary of Transportation, THE 29
CHIEF PROCUREMENT OFFICER, and the Attorney General, establish procedures 30 HOUSE BILL 500 33
governing how the participation of minority business enterprise prime contractors is 1
counted toward contract goals; and 2
(ii) notwithstanding § 12–101 of this article, adopt regulations 3
setting forth the procedures established in accordance with this paragraph. 4
[(9)] (10) (i) 1. If a contractor, including a certified minority 5
business enterprise, does not achieve all or a part of the minority business enterprise 6
participation goals on a contract, the unit shall make a finding of whether the contractor 7
has demonstrated that the contractor took all necessary and reasonable steps to achieve 8
the goals, including compliance with paragraph (7) of this subsection. 9
2. A waiver of any part of the minority business enterprise 10
goals for a contract shall be granted if a contractor provides a reasonable demonstration of 11
good–faith efforts to achieve the goals. 12
(ii) If the unit determines that a waiver should be granted in 13
accordance with subparagraph (i) of this paragraph, the unit may not require the contractor 14
to renegotiate any subcontract in order to achieve a different result. 15
(iii) The head of the unit may waive any of the requirements of this 16
subsection relating to the establishment, use, and waiver of contract goals for a sole source, 17
expedited, or emergency procurement in which the public interest cannot reasonably 18
accommodate use of those requirements. 19
(iv) 1. Except for waivers granted in accordanc e with 20
subparagraph (iii) of this paragraph, when a waiver determination is made, the unit shall 21
issue the determination in writing. 22
2. The head of the unit shall: 23
A. keep one copy of the waiver determination and the reasons 24
for the determination; and 25
B. forward one copy of the waiver determination to the 26
Governor’s Office of Small, Minority, and Women Business Affairs. 27
(v) On or before July 31 of each year, each unit shall submit directly 28
to the Board of Public Works and the Governor’s Office of Small, Minority, and Women 29
Business Affairs an annual report of waivers requested and waivers granted under this 30
paragraph. 31
(vi) The report required under subparagraph (v) of this paragraph 32
shall contain the following information on those contracts where the unit considered a 33
contractor’s request for waiver of all or a portion of the minority business enterprise goals: 34
1. the contract titles, numbers, and dates; 35 34 HOUSE BILL 500
2. the number of waiver requests received; 1
3. the number of waiver requests granted; and 2
4. any other information specifically requested by the Board. 3
[(10)] (11) (i) [1.] This paragraph applies to a bidder or offeror after 4
submission of a bid or proposal and before the execution of a contract with an expected 5
degree of minority business enterprise participation. 6
[2. If the bidder or offeror determines that a minority 7
business enterprise identified in the minority business enterprise participation schedule 8
has become or will become unavailable or ineligible to perform the work required under the 9
contract, the bidder or offeror shall notify the unit within 72 hours of making the 10
determination.] 11
[(ii) 1. If a minority business enterprise identified in the minority 12
business enterprise participation schedule submitted with a bid or offer has become or will 13
become unavailable or ineligible to perform the work required under the contract, the 14
bidder or offeror may submit a written request with the unit to amend the minority 15
business enterprise participation schedule. 16
2. The request to amend the minority business enterprise 17
participation schedule shall indicate the bidder’s or offeror’s efforts to substitute another 18
certified minority business enterprise to perform the work that the unavailable or ineligible 19
minority business enterprise would have performed. 20
(iii) A minority business enterprise participation schedule may not 21
be amended unless: 22
1. the bidder or offeror provides a satisfactory explanation of 23
the reason for inclusion of the unavailable or ineligible firm on the minority business 24
enterprise participation schedule; and 25
2. the amendment is approved by the unit’s procurement 26
officer after consulting with the unit’s minority business enterprise liaison.] 27
(II) 1. IF A UNIT’S PROCUREMENT OFFICE R DETERMINES 28
THAT A DEFICIENCY EX ISTS IN THE MINORITY BUSINESS ENTERPRISE 29
PARTICIPATION SCHEDU LE, THE PROCUREMENT OFFI CER SHALL NOTIFY THE 30
BIDDER OR OFFEROR OF THE DEFICIENCY AND R EQUIRE THE BIDDER OR OFFEROR 31
TO SUBMIT AN AMENDED MINORITY BUSINESS ENTERPR ISE PARTICIPATION 32
SCHEDULE WITHIN A RE ASONABLE TIME PERIOD . 33
HOUSE BILL 500 35
2. A DETERMINATION UNDER SUBSUBPARAGRAPH 1 OF 1
THIS SUBPARAGRAPH SH ALL BE MADE IN CONSU LTATION WITH THE UNI T’S 2
MINORITY BUSINESS EN TERPRISE LIAISON . 3
3. AS DIRECTED BY THE NOTIFICATION MAD E UNDER 4
SUBSUBPARAGRAPH 1 OF THIS SUBPARAGRAPH , THE BIDDER OR OFFERO R SHALL 5
SUBMIT AN AMENDED MI NORITY BUSINESS ENTE RPRISE PARTICIPATION SCHEDULE 6
CORRECTING THE DEFIC IENCY IDENTIFIED . 7
[(11)] (12) (i) This paragraph applies after execution of a contract with 8
an expected degree of minority business enterprise participation. 9
(ii) The minority business enterprise participation schedule, 10
including any amendment, shall be attached to and made a part of the executed contract. 11
(iii) 1. A. Except as provided in subsubsubparagraph B of this 12
subsubparagraph, for purposes of this subparagraph, good cause for removal of a certified 13
minority business enterprise after contract execution includes documented 14
nonperformance by the minority business enterprise or election by the certified minority 15
business enterprise to cease work on the contract. 16
B. Failure of a certified minority business enterprise to 17
provide a bond requested by a contractor in violation of § 13–227 of this article may not be 18
considered nonperformance by the minority business enterprise. 19
2. A contractor may not terminate or otherwise cancel the 20
contract of a certified minority business enterprise subcontractor listed in the minority 21
business enterprise participation schedule without showing good cause and obtaining the 22
prior written consent of the minority business enterprise liaison and approval of the head 23
of the unit. 24
3. The unit shall send a copy of the written consent obtained 25
under subsubparagraph 2 of this subparagraph to the Governor’s Office of Small, Minority, 26
and Women Business Affairs. 27
(iv) A minority business enterprise participation schedule may [not] 28
be amended TO ADD TO OR INCREASE MODIFY MINORITY BUSINESS EN TERPRISE 29
PARTICIPATION after the date of contract execution [unless the request is] ONLY IF: 30
1. IT IS IN THE BEST INTEREST OF THE STATE; 31
2. IT IS approved by the head of the unit; and 32
3. the contract is amended. 33
36 HOUSE BILL 500
[(12)] (13) If, during the performance of a contract, a certified minority 1
business enterprise contractor or subcontractor becomes ineligible to participate in the 2
Minority Business Enterprise Program because one or more of its owners has a personal 3
net worth that exceeds the amount specified in § 14–301(k)(3) of this subtitle: 4
(i) that ineligibility alone may not cause the termination of the 5
certified minority business enterprise’s contractual relationship for the remainder of the 6
term of the contract; and 7
(ii) the certified minority business enterprise’s participation under 8
the contract shall continue to be counted toward the program and contract goals. 9
[(13)] (14) (i) Except as provided in subparagraph (ii) of this paragraph, 10
a nonprofit entity participating as a minority business enterprise on a procurement 11
contract awarded by a unit before July 1, 2015, may continue to participate in the contract 12
until the contract expires or otherwise terminates, including all options, renewals, and 13
other extensions. 14
(ii) 1. The nonprofit entity’s participation may not be counted 15
toward achieving the minority business enterprise participation goals in this subsection. 16
2. The unit may not require that a certified minority 17
business enterprise be substituted for the nonprofit entity in order to meet the minority 18
business enterprise goals for the procurement contract. 19
[(14)] (15) (i) For purposes of this paragraph and paragraph [(15)] (16) 20
of this subsection, “regular dealer”: 21
1. means a firm that owns, operates, or maintains a store, a 22
warehouse, or any other establishment in which the materials, supplies, articles, or 23
equipment are of the general character described by the specifications required under the 24
contract and are bought, kept in stock, or regularly sold or leased to the public in the usual 25
course of business; and 26
2. does not include a packager, a broker, a manufacturer’s 27
representative, or any other person that arranges or expedites transactions. 28
(ii) A unit may apply only 60% of the costs of the materials and 29
supplies provided by the certified minority business enterprise if the certified minority 30
business enterprise is a regular dealer for purposes of achieving the minority business 31
enterprise contract goal. 32
[(15)] (16) With respect to materials or supplies purchased from a certified 33
minority business enterprise that is neither a manufacturer nor a regular dealer: 34
HOUSE BILL 500 37
(i) a unit may apply the entire amount of fees or commissions 1
charged for assistance in the procurement of the materials and supplies, fees, or 2
transportation charges for the delivery of materials and supplies required on a procurement 3
toward minority business enterprise contract goals, provided a unit determines the fees to 4
be reasonable and not excessive as compared with fees customarily allowed for similar 5
services; and 6
(ii) a unit may not apply any portion of the costs of the materials and 7
supplies toward minority business enterprise goals. 8
14–303. 9
(a) (1) (ii) The Board shall keep a record of information regarding any 10
waivers requested in accordance with [§ 14–302(a)(9)(i)] § 14–302(A)(10)(I) of this 11
subtitle and subsection (b)(12) of this section and submit a copy of the record to the General 12
Assembly on or before October 1 of each year, in accordance with § 2–1257 of the State 13
Government Article. 14
(b) These regulations shall include: 15
(12) consistent with [§ 14–302(a)(9)] § 14–302(A)(10) of this subtitle, 16
provisions relating to any circumstances under which a unit may waive obligations of the 17
contractor relating to minority business enterprise participation; 18
(13) provisions requiring a [monthly] submission to the unit by minority 19
business enterprises acknowledging all payments received [in the preceding 30 days] OR 20
ANY OTHER INFORMATIO N REQUESTED BASED ON CRITERIA ESTABLISHED BY THE 21
GOVERNOR’S OFFICE OF SMALL, MINORITY, OR WOMEN BUSINESS AFFAIRS under 22
a contract governed by this subtitle; 23
[(17) a requirement that a bid or proposal based on a solicitation with an 24
expected degree of minority business enterprise participation identify the specific 25
commitment of certified minority business enterprises at the time of submission;] 26
[(18)] (17) provisions promoting and providing for the counting and 27
reporting of certified minority business enterprises as prime contractors; 28
[(19)] (18) provisions establishing standards to require a minority business 29
enterprise to perform a commercially useful function on a contract; 30
[(20)] (19) a requirement that each unit work with the Governor’s Office of 31
Small, Minority, and Women Business Affairs to designate certain procurements as being 32
excluded from the requirements of § 14–302(a) of this subtitle; 33
[(21)] (20) provisions promoting and providing for the counting and 34
reporting of minority business enterprises certified as both a woman–owned business and 35 38 HOUSE BILL 500
a business owned by a member of an ethnic or racial group in accordance with § 1
14–302(a)(5) of this subtitle; and 2
[(22)] (21) other provisions that the Board considers necessary or 3
appropriate to encourage participation by minority business enterprises and to protect the 4
integrity of the procurement process. 5
14–401. 6
(a) (1) In this section the following words have the meanings indicated. 7
(5) (i) [“Services”] SUBJECT TO SUBPARAGRA PH (II) OF THIS 8
PARAGRAPH , “SERVICES” has the meaning stated in [§ 11–101(t)(1) and (2)] § 11–101 of 9
this article. 10
(ii) Notwithstanding [§ 11–101(t)(3)] § 11–101 of this article, 11
“services” includes construction related services and energy performance contract services. 12
14–502.1. 13
(a) (1) This section applies to a procurement by any unit or agency of the 14
Executive Branch of State government for goods, supplies, services, maintenance, 15
construction, construction–related services, architectural services, or engineering services. 16
(2) This section does not apply to: 17
(i) procurements made under Subtitle 1 of this title; 18
(ii) procurements involving expenditures of federal dollars, to the 19
extent that inclusion in the small business reserve program conflicts with federal law or 20
grant provisions; 21
[(iii) procurements with a total dollar value under $50,000;] 22
[(iv)] (III) the procurement of human, social, cultural, or educational 23
services; or 24
[(v)] (IV) term and master contracts exempted under subsection (c) 25
of this section. 26
(b) (1) A procurement with a total dollar value [between $50,000 and 27
$500,000] OF $1,000,000 OR LESS shall be designated for the small business reserve. 28
(2) Each unit or agency shall implement this subsection in a manner 29
consistent with all applicable statutes, including the requirements of Subtitle 3 of this title. 30
HOUSE BILL 500 39
14–504. 1
(c) The procurement officer of a unit shall award a procurement contract 2
designated for a small business reserve to the small business that submits a responsive bid 3
OR A PROPOSAL THAT I S REASONABLY SUSCEPT IBLE OF BEING SELECT ED FOR 4
AWARD that: 5
(1) is the lowest bid price; 6
(2) if the invitation for bids so provides, is the lowest evaluated bid price; 7
or 8
(3) is the bid or proposal most favorable to the State within the small 9
business reserve. 10
14–601. 11
(a) In this subtitle the following words have the meanings indicated. 12
(b) “Veteran” [means an individual who is verified as having served on active duty 13
in the armed forces of the United States, other than for training, and was discharged or 14
released under conditions other than dishonorable] HAS THE MEANING STAT ED IN § 15
9–901 OF THE STATE GOVERNMENT ARTICLE. 16
(c) “Veteran–owned small business enterprise” means a for–profit business that: 17
(1) meets the size standards adopted by the United States Small Business 18
Administration in 13 C.F.R. 121.201 and any subsequent revision of that regulation; and 19
(2) is at least 51% owned by one or more individuals who: 20
(i) are veterans; and 21
(ii) control the management and daily operations of the business. 22
14–602. 23
(a) (1) A unit shall structure procurement procedures, consistent with the 24
purposes of this subtitle, to try to achieve or exceed an overall percentage goal of the unit’s 25
total dollar value of procurement contracts to be made directly or indirectly with 26
veteran–owned small business enterprises. 27
(2) The Office of Small, Minority, and Women Business Affairs shall adopt 28
regulations that establish the overall percentage goal. 29
40 HOUSE BILL 500
(b) Solicitation documents shall state the expected percentage of veteran–owned 1
small business enterprise participation based, in part, on: 2
(1) the potential contracting opportunities available in the procurement 3
contract, including both prime contracting and subcontracting opportunities, as determined 4
through analysis of the scope of the work presented in the solicitation documents; and 5
(2) the availability of veteran–owned small business enterprises to respond 6
competitively to the potential contracting opportunities. 7
(C) (1) (I) THIS PARAGRAPH APPLIE S TO A BIDDER OR OFF EROR 8
AFTER SUBMISSION OF A BID OR PROPOSAL AND BEFO RE THE EXECUTION OF A 9
CONTRACT WITH AN EXP ECTED DEGREE OF VETE RAN–OWNED SMALL BUSINESS 10
ENTERPRISE PARTICIPA TION. 11
(II) 1. IF A UNIT’S PROCUREMENT OFFICE R DETERMINES 12
THAT A DEFICIENCY EX ISTS IN THE VETERAN –OWNED SM ALL BUSINESS ENTERPR ISE 13
PARTICIPATION SCHEDU LE, THE PROCUREMENT OFFI CER SHALL NOTIFY THE 14
BIDDER OR OFFEROR OF THE DEFICIENCY AND R EQUIRE THE BIDDER OR OFFEROR 15
TO SUBMIT AN AMENDED VETERAN–OWNED SMALL BUSINESS ENTERPRISE 16
PARTICIPATION SCHEDU LE WITHIN A REAS ONABLE TIME PERIOD . 17
2. A DETERMINATION UNDER SUBSUBPARAGRAPH 1 OF 18
THIS SUBPARAGRAPH SH ALL BE MADE IN CONSU LTATION WITH THE UNI T’S 19
VETERAN–OWNED SMALL BUSINESS ENTERPRISE LIAISON . 20
3. AS DIRECTED BY THE NO TIFICATION MADE UNDE R 21
SUBSUBPARAGRAPH 1 OF THIS SUBPARAGRAPH , THE BIDDER OR OFFERO R SHALL 22
SUBMIT AN AMENDED VE TERAN–OWNED SMALL BUSINESS ENTERPRISE 23
PARTICIPATION SCHEDU LE CORRECTING THE DE FICIENCY IDENTIFIED . 24
(2) A UNIT MAY CONSIDER AD DING OR INCREASING T HE 25
VETERAN–OWNED SMALL BUSINESS PARTICIPATION GOAL ON A PRO CUREMENT 26
CONTRACT: 27
(I) AT ANY TIME PRIOR TO CONTRACT EXECUTION ; 28
(II) AFTER CONTRACT EXECU TION, WHEN DETERMINED TO B E 29
IN THE BEST INTEREST OF THE STATE; OR 30
(III) WHEN THE VETERAN –OWNED SMALL BUSINESS 31
ENTERPRISE PARTICIPA TION SCHEDULE HAS BEEN CREATED OR AMENDED . 32
HOUSE BILL 500 41
(2) (I) SUBJECT TO SUBPARAGRA PH (II) OF THIS PARAGRAPH , A 1
UNIT MAY CONSIDER MO DIFYING THE VETERAN –OWNED SMALL BUSINESS 2
PARTICIPATION GOAL O N A PROCUREMENT CONT RACT: 3
1. AT ANY TIME PRIOR TO CONTRACT EXECUTION; OR 4
2. AFTER CONTRACT EXECU TION, WHEN DETERMINED 5
TO BE IN THE BEST IN TEREST OF THE STATE. 6
(II) BEFORE A UNIT MAY CON SIDER MODIFYING A 7
VETERAN–OWNED SMALL BUSINESS PARTICIPATION GOAL U NDER SUBPARAGRAPH 8
(I) OF THIS PARAGRAPH , THE UNIT SHA LL: 9
1. MAKE A DETERMINATION THAT THERE HAS BEEN A 10
CHANGE IN THE FACTOR S ESTABLISHED UNDER SUBSECTION (B) OF THIS SECTION; 11
2. USE THE FACTORS ESTA BLISHED UNDER SUBSEC TION 12
(B) OF THIS SECTION TO D ETERMINE THE PERCENT AGE MODIFICATION TO THE 13
VETERAN–OWNED SMALL BUSINESS PARTICIPATION GOAL ; AND 14
3. OBTAIN THE AGREEMENT OF THE CONTRACTOR , 15
INCLUDING ANY REASON ABLE PRICING CONSIDE RATIONS. 16
(3) THE VETERAN –OWNED SMALL BUSINESS ENTERPRISE 17
PARTICIPATION SCHEDU LE, INCLUDING ANY AMENDM ENT, SHALL BE ATTACHED TO 18
AND MADE A PART OF T HE EXECUTED CONTRACT . 19
(4) A VETERAN–OWNED SMALL BUSINESS ENTERPRISE 20
PARTICIPATION SCHEDU LE MAY BE AMENDED TO ADD TO OR INCREASE MODIFY THE 21
VETERAN–OWNED SMALL BUSINESS ENTERPRISE PARTICIPA TION AFTER THE DATE 22
OF CONTRACT EXECUTION ONLY IF : 23
(I) IT IS IN THE BEST INTEREST OF THE STATE; 24
(II) IT IS APPROVED BY TH E HEAD OF THE UNIT ; AND 25
(III) THE CONTRACT IS AMEN DED. 26
[(c)] (D) The provisions of this subtitle do not apply to a unit’s procurement 27
procedures to the extent that any unit determines that those provisions are in conflict with 28
an applicable federal program. 29
14–602.1. 30
42 HOUSE BILL 500
(A) IN THIS SECTION , “VETERAN–OWNED SMALL BUSINESS RESERVE” 1
MEANS THOSE PROCUREM ENTS THAT ARE LIMITE D TO RESPONSES FROM 2
BUSINESSES THAT QUALIFY AS A VETERAN –OWNED SMALL BUSINESS ENTERPRISE. 3
(B) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , 4
THIS SECTION APPLIES TO ALL PROCUREMENTS BY THE DEPARTMENT OF 5
VETERANS AND MILITARY FAMILIES AND THE MILITARY DEPARTMENT OR ANY 6
UNIT ACTING ON BEHALF OF THE DEPARTMENT OF VETERANS AND MILITARY 7
FAMILIES OR THE MILITARY DEPARTMENT . 8
(2) THIS SECTION DOES NOT APPLY TO: 9
(I) PROCUREMENTS MADE UN DER SUBTITLE 1 OF THIS TITLE; 10
OR 11
(II) PROCUREMENTS INVOLVI NG EXPENDITURES OF F EDERAL 12
DOLLARS, TO THE EXTENT THAT T HE REQUIREMENTS IN T HIS SECTION CONFLICT 13
WITH FEDERAL LAW OR OTHER GRANT PROVISIO NS. 14
(C) NOTWITHSTANDING SUBTITLE 5 OF THIS TITLE, ANY PROCUREMENT BY 15
THE DEPARTMENT OF VETERANS AND MILITARY FAMILIES OR THE MILITARY 16
DEPARTMENT OF GOODS, SUPPLIES, SERVICES, MAINTENANCE , CONSTRUCTION , 17
CONSTRUCTION RELATED SERVICES, ARCHITECTURAL SERVIC ES, AND 18
ENGINEERING SERVICES SHALL BE ELIGIBLE FO R DESIGNATION FOR TH E 19
VETERAN–OWNED SMALL BUSINESS RESERVE. 20
(D) THE GOVERNOR’S OFFICE OF SMALL, MINORITY, AND WOMEN 21
BUSINESS AFFAIRS SHALL: 22
(1) IN CONSULTATION WITH THE CHIEF PROCUREMENT OFFICER 23
AND THE ATTORNEY GENERAL, ESTABLISH STANDARDS AND GUIDELINES FOR 24
PARTICIPATION IN THE VETERAN–OWNED SMALL BUSINESS RESERVE PROGRAM 25
EVERY 5 YEARS; 26
(2) ESTABLISH GUIDELINES FOR VETERAN –OWNED SMALL BUSINESS 27
RESERVE PROGRAM ADMI NISTRATION; AND 28
(3) COLLECT DATA REGARDI NG THE DEPARTMENT OF VETERANS 29
AND MILITARY FAMILIES’ AND THE MILITARY DEPARTMENT ’S USE OF 30
VETERAN–OWNED SMALL BUSINESS RESERVE VENDORS . 31
SUBTITLE 8. INTERNSHIP AND REGISTERED APPRENTICESHIP PROGRAM. 32
14–801. 33 HOUSE BILL 500 43
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 1
INDICATED. 2
(B) “COVERED PROCUREMENT ” MEANS A PROCUREMENT CONTRACT THAT : 3
(1) MEETS THE CRITERIA E STABLISHED BY THE CHIEF 4
PROCUREMENT OFFICER, IN CONSULTATION WITH THE SECRETARY AND, FOR 5
CONTRACTS SUBJECT TO TITLE 3.5 OF THIS ARTICLE , THE SECRETARY OF 6
INFORMATION TECHNOLOGY , UNDER § 14–802 OF THIS SUBTITLE; AND 7
(2) IS NOT A PUBLIC WORK CONTRACT SUB JECT TO § 17–202 OF THIS 8
ARTICLE. 9
(C) “DEPARTMENT ” MEANS THE MARYLAND DEPARTMENT OF LABOR. 10
(D) “ELIGIBLE INTERNSHIP P ROGRAM” MEANS AN INTERNSHIP PROGRAM 11
THAT REQUIRES A CONT RACTOR OR OTHER ENTI TY TO PROVIDE PAID I NTERNSHIPS 12
THAT MEET STANDARDS ESTABL ISHED BY THE SECRETARY. 13
(E) “REGISTERED APPRENTICE SHIP PROGRAM ” MEANS AN 14
APPRENTICESHIP PROGR AM THAT IS REGISTERE D WITH AND APPROVED BY THE 15
DIVISION OF WORKFORCE DEVELOPMENT AND ADULT LEARNING. 16
(F) “SECRETARY” MEANS THE SECRETARY OF LABOR. 17
14–802. 18
(A) THIS SUBTITLE APPLIES TO A COVERED PROCURE MENT MADE BY A 19
UNIT. 20
(B) A CONTRACTOR AWARDED A COVERED PROCUREMENT WITH AN 21
ESTIMATED TOTAL DOLL AR VALUE OF $1,000,000 OR MORE SHALL UTILIZ E AN 22
ELIGIBLE INTERNSHIP PROGRAM . 23
(C) A CONTRACTOR AWARDED A COVERED PROCUREMENT SHALL UTILIZE A 24
REGISTERED APPRENTIC ESHIP PROGRAM . 25
(D) THE CHIEF PROCUREMENT OFFICER, IN CONSULTATION WITH THE 26
SECRETARY AND, FOR CONTRACTS SUBJEC T TO TITLE 3.5 OF THIS ARTICLE , THE 27
SECRETARY OF INFORMATION TECHNOLOGY : 28
(1) SHALL ADOPT REGULATI ONS ESTABLISHING THE DEFINITION OF 29
“COVERED PROCUREMENT ”; AND 30 44 HOUSE BILL 500
(2) MAY ADOPT: 1
(I) REGULATIONS TO IMPRO VE THE RECRUITMENT O R SKILLS 2
OF EMPLOYEES OF VEND ORS; OR 3
(II) OTHER REGULATIONS NECESSARY TO CARRY O UT THIS 4
SUBTITLE, INCLUDING WAIVER PRO CESSES. 5
14–803. 6
(A) A CONTRACTOR THAT SUBM ITS A BID OR PROPOSA L FOR A COVERED 7
PROCUREMENT SHALL PR OVIDE TO A UNIT WRIT TEN VERIFICATION OF : 8
(1) THE NUMBER OF APPREN TICES OR INTERNS THA T WILL BE 9
UTILIZED THROUGHOUT THE CONTRACT TERM , INCLUDING POTENTIAL RENEWAL 10
OPTIONS; 11
(2) THE WORK TO BE PERFO RMED BY APPRENTICES IN A REGISTERED 12
APPRENTICESHIP PROGR AM OR INTERNS IN AN ELIGIBLE INTERNSHIP PROGRAM; 13
AND 14
(3) THE DURATION OF THE APPRENTICESHIP OR THE INTERNSHIP . 15
(B) THE WRITTEN VERIFICAT ION REQUIRED UNDER S UBSECTION (A) OF 16
THIS SECTION SHALL B E PROVIDED BEFORE TH E CONTRACTOR MAY BE AWARDED A 17
CONTRACT FOR A COVER ED PROCUREMENT . 18
14–804. 19
(A) THE SECRETARY IS RESPONSI BLE FOR ENSURING COM PLIANCE WITH 20
THE REQUIREMENTS OF THIS SUBTITLE. 21
(B) THE SECRETARY SHALL ESTAB LISH CRITERIA TO ASS IST UNITS IN 22
ENSURING CONTRACTOR COMPLIANCE WITH THIS SUBTITLE, INCLUDING: 23
(1) PENALTIES FOR A CONT RACTOR’S FAILURE TO USE APP RENTICES 24
OR INTERNS AS PROVID ED IN A BID OR PROPOSAL ; AND 25
(2) PROCEDURES FOR REPOR TING ALLEGED VIOLATI ONS OF THIS 26
SUBTITLE. 27
14–805. 28
HOUSE BILL 500 45
(A) A CONTRACTOR THAT IS A WARDED A CONTRACT FO R A COVERED 1
PROCUREMENT UNDER TH IS SUBTITLE WHO FAIL S TO USE APPRENTICES FROM A 2
REGISTERED APPRENTIC ESHIP PROGRAM OR INTERNS F ROM AN ELIGIBLE 3
INTERNSHIP PROGRAM A S PROVIDED IN THE BI D OR PROPOSAL SHALL BE LIABLE 4
FOR AN AMOUNT AS SPE CIFIED BY THE CRITER IA ESTABLISHED UNDER § 14–804 OF 5
THIS SUBTITLE. 6
(B) A UNIT SHALL REPORT AL LEGED VIOLATIONS OF THIS SUBTITLE TO THE 7
DEPARTMENT AS SPECIFI ED IN THE CRITERIA E STABLISHED UNDER § 14–804 OF 8
THIS SUBTITLE. 9
(C) THE DEPARTMENT SHALL REPO RT ALLEGED VIOLATION S OF THIS 10
SUBTITLE TO THE OFFICE OF THE ATTORNEY GENERAL, WHICH SHALL DETERMIN E 11
WHETHER TO BRING A C IVIL ACTION A GAINST A PERSON OR B USINESS FOR A 12
VIOLATION OF THIS SU BTITLE. 13
(D) PENALTIES SHALL BE RE COVERABLE IN CIVIL A CTIONS AND PAID TO 14
THE STATE APPRENTICESHIP TRAINING FUND ESTABLISHED UNDE R § 17–602 OF 15
THIS ARTICLE, UNLESS OTHERWISE REQ UIRED BY FEDERAL LAW . 16
(E) THE SECRETARY MAY FILE SU IT TO ENFORCE THIS S UBTITLE IN ANY 17
COURT OF COMPETENT J URISDICTION. 18
(F) IN AN ACTION FILED UN DER THIS SECTION , THE COURT SHALL REQU IRE 19
THE CONTRACTOR TO PA Y THE AMOUNT REQUIRE D BY SUBSECTION (A) OF THIS 20
SECTION, INCLUDING INTEREST, REASONABLE ATTORNEY ’S FEES, AND COURT 21
COSTS. 22
SUBTITLE 9. GOOD LABOR PRACTICES PREFERENCE EVALUATION FACTOR. 23
14–901. 24
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 25
INDICATED. 26
(B) “COMMISSIONER ” MEANS THE COMMISSIONER OF LABOR AND 27
INDUSTRY. 28
(C) “GOOD LABOR PRACTICES CERTIFIED BUSINESS ” MEANS A BUSINESS 29
THAT MEETS THE QUALI FICATIONS ESTABLISHE D UNDER § 14–903 OF THIS 30
SUBTITLE. 31
46 HOUSE BILL 500
(D) “GOOD LABOR PRACTICES PREFERENCE ” MEANS A PREFERENCE 1
ESTABLISHED UNDER § 14–904 OF THIS SUBTITLE AP PLIED TO BUSINESSES 2
HOLDING A VALID , CURRENT CERTIFICATIO N OF THEIR GOOD LABO R PRACTICES. 3
(C) “GOOD LABOR PRACTICES EVALUATION FACTOR ” MEANS A FACTOR FOR 4
GOOD LABOR PRACTICES THAT WILL BE USED TO EVALUATE TECHNICAL P ROPOSALS 5
RECEIVED FOR PROCURE MENTS BEING CONDUCTED THRO UGH THE COMPETITIVE 6
SEALED PROPOSALS PRO CUREMENT METHOD UNDE R § 13–104 OF THIS ARTICLE. 7
(E) (D) “PUBLIC BODY” HAS THE MEANING STAT ED IN § 17–201 OF THIS 8
ARTICLE. 9
(F) (E) “PUBLIC WORK CONTRACT ” HAS THE MEANING STAT ED IN § 10
17–201 OF THIS ARTICLE. 11
14–902. 12
THIS SUBTITLE APPLIES TO: 13
(1) PUBLIC WORK CONTRACT S PROCURED BY A PUBL IC BODY; AND 14
(2) A CONTRACT SUBJECT T O § 18–102 OF THIS ARTICLE. 15
14–903. 16
(A) TO OBTAIN INITIAL CERTI FICATION AS A QUALIFY FOR APPLICAT ION OF 17
THE GOOD LABOR PRACTICES CERTIFIED BUSINESS EVALUATION FACTOR , A 18
BUSINESS MUST ATTEST BY AFFIDAVIT THAT, ON ANY CONTRACT SUBJECT TO THIS 19
SUBTITLE THAT IT IS AWARDED OR UNDER WHI CH IT PERFORMS ANY W ORK, THE 20
BUSINESS WILL: 21
(1) DIRECTLY EMPLOY , AS W–2 EMPLOYEE S, ALL PERSONS WORKERS 22
PERFORMING WORK TASKS ON BEHALF OF T HE BUSINESS, EXCEPT FOR A PERSON 23
EXEMPT UNDER TITLE 3, SUBTITLE 9 OF THE LABOR AND EMPLOYMENT ARTICLE, 24
UNDER THE CONTRACT ; 25
(2) PAY ALL PERSONS WORKERS BY CHECK OR ELECTRON IC MEANS 26
AS AVAILABLE A ND NOT IN CASH OR CA SH EQUIVALENT ; 27
(3) STRICTLY COMPLY WITH ALL LEGAL OBLIGATION S AS AN 28
EMPLOYER, INCLUDING ITS OBLIGA TIONS AS AN EMPLOYER UNDER TITLE 3, TITLE 29
5, TITLE 8, OR TITLE 9 OF THE LABOR AND EMPLOYMENT ARTICLE AND, AS 30
APPLICABLE, UNDER TITLE 17 OR TITLE 18 OF THIS ARTICLE; 31
HOUSE BILL 500 47
(4) PROVIDE ADVANCE WRIT TEN NOTIFICATION TO THE 1
PROCUREMENT AUTHORIT Y AND TO THE MARYLAND DEPARTMENT OF LABOR, 2
DIVISION OF LABOR AND INDUSTRY, IN A FORM TO BE DETE RMINED BY THE 3
COMMISSIONER , OF ANY SUBCONTRACTOR S PERFORMING WORK UNDER THE 4
CONTRACT; 5
(5) PROVIDE WRITTEN NOTI CE OF THE REQUIREMEN TS OF ITEMS (1), 6
(2), AND (3) OF THIS SUBSECTION T O ANY SUBCONTRACTORS PERFORMING WORK 7
UNDER THE CONTRACT ; 8
(6) OBTAIN WRITTEN ACKNO WLEDGMENT OF THE NOT ICE PROVIDED 9
IN ITEM (5) OF THIS SUBSECTION AND OF THE SUBCONTRACTOR ’S AGREEMENT TO 10
ADHERE TO THOSE REQU IREMENTS, TO BE FILED WITH THE COMMISSIONER , IN A 11
FORM AND MANNER DETE RMINED BY THE COMMISSIONER ; 12
(7) SUCCESSFULLY COMPLET E A COMPREHENSIVE CO NSULTATION 13
VISIT BY THE MARYLAND OCCUPATIONAL SAFETY AND HEALTH PROGRAM WITHIN 14
A REASONABLE TIME DE TERMINED BY THE COMMISSIONER , FOLLOWING THE START 15
OF WORK UNDER THE CO NTRACT; 16
(8) BE JOINTLY AND SEVER ALLY LIABLE AS AN EM PLOYER FOR ANY 17
VIOLATION OF A SUBCO NTRACTOR UNDER TITLE 3, TITLE 5, TITLE 8, OR TITLE 9 OF 18
THE LABOR AND EMPLOYMENT ARTICLE OR TITLE 17 OR TITLE 18 OF THIS ARTICLE 19
IN CONNECTION WITH T HE SUBCONTRACTOR ’S PERFORMANCE OF WOR K UNDER THE 20
CONTRACT; 21
(9) PROMPTLY DISCLOSE TO THE COMMISSIONER , IN A FORM AND 22
MANNER TO BE PRESCRI BED BY THE COMMISSIONER , ANY SUITS, CHARGES, 23
DEMANDS, ORDERS, FINDINGS, OR ADJUDICATIONS MAD E AGAINST IT IN 24
CONNECTION WITH VIOL ATIONS SUBJECT TO IT EM (1), (2), OR (3) OF THIS 25
SUBSECTION OR AGAINS T ANY OF ITS SUBCONT RACTORS AS PROVIDED IN ITEM (8) 26
OF THIS SUBSECTION; AND 27
(10) ON CONTRACTS SUBJECT TO § 18–102 OF THIS ARTICLE, PROVIDE 28
PROOF THAT THE BUSIN ESS HAS SECURED A PA YMENT BOND SUFFICIEN T TO 29
ENSURE PAYMENT OF WA GES TO ALL EMPLOYEES PERFORMING WORK UNDE R THE 30
CONTRACT. 31
(B) (1) A BUSINESS THAT SUBMIT S AN APPLICATION TO THE 32
COMMISSIONER , ON A FORM DEVELOPED BY THE COMMISSIONER , DEMONSTRATING 33
SATISFACTION OF THE CRITERIA LISTED IN S UBSECTION (A) OF THIS SECTION, MAY 34
BE ISSUED A GOOD LAB OR PRACTICES CERTIFI CATION. 35
48 HOUSE BILL 500
(2) THE CERTIFICATION IN PARAGRAPH (1) OF THIS SUBSECTION 1
SHALL BE VALID FOR 12 MONTHS FROM THE DATE OF ISSUANCE, PROVIDED THAT 2
THE BUSINESS’S ELIGIBILITY FOR CE RTIFICATION IS MAINT AINED CONTINUOUSLY 3
DURING THAT PERIOD . 4
(B) A PROCUREMENT OFFICER WHO RECEIVES A PROPO SAL FOR A 5
COMPETITIVE S EALED PROPOSAL PROCU REMENT THAT IS SUBMI TTED WITH THE 6
AFFIDAVIT DESCRIBED UNDER SUBSECTION (A) OF THIS SECTION SHAL L EVALUATE 7
THE PROPOSAL WITH TH E GOOD LABOR PRACTIC ES EVALUATION FACTOR . 8
(3) (C) THE COMMISSIONER SHALL : 9
(I) MAINTAIN A LIST OF A LL BUSINESSES WITH CURRE NT, 10
VALID GOOD LABOR PRA CTICES CERTIFICATION ; 11
(1) MAINTAIN A LIST FOR THE PRECEDING 12 MONTHS OF ALL 12
BUSINESSES THAT HAVE SUBMITTED THE AFFIDA VIT DESCRIBED UNDER 13
SUBSECTION (A) OF THIS SECTION , CONFIRMING ADHERENCE TO GOOD LABOR 14
PRACTICES; 15
(II) (2) PROVIDE THE LIST IN ITEM (I) OF THIS PARAGRAPH 16
(1) OF THIS SUBSECTION TO ALL PROCUREMENT O FFICERS AT LEAST ONC E EVERY 3 17
6 MONTHS AND ON REQUES T; AND 18
(III) (3) PUBLISH THE LIST IN ITEM (I) OF THIS PARAGRAPH 19
(1) OF THIS SUBSECTION ON THE MARYLAND DEPARTMENT OF LABOR’S PUBLIC 20
WEBSITE. 21
(C) A BUSINESS SEEKING TO RENEW ITS CERTIFICAT ION FOR AN 22
ADDITIONAL 12–MONTH PERIOD SHALL : 23
(1) PROVIDE AN UPDATED A TTESTATION AT A TIME AND IN A FORM 24
DEVELOPED BY THE COMMISSIONER ; AND 25
(2) PROVIDE ANY ADDITIONAL INFOR MATION REQUESTED BY THE 26
COMMISSIONER . 27
(D) IF THE COMMISSIONER DETERMIN ES THAT A BUSINESS I S NOT 28
ELIGIBLE, OR IS NO LONGER ELIG IBLE, FOR CERTIFICATION , THE COMMISSIONER 29
SHALL: 30
(1) REVOKE THE CERTIFICA TION; AND 31
HOUSE BILL 500 49
(2) REMOVE THE BU SINESS FROM THE LIST OF GOOD LABOR 1
PRACTICES CERTIFIED BUSINESSES MAINTAINE D UNDER SUBSECTION (B) OF THIS 2
SECTION. 3
(D) IF THE COMMISSIONER DETERMIN ES THAT A BUSINESS I S NOT 4
FOLLOWING GOOD LABOR PRACTICES, AS DESCRIBED IN SUBS ECTION (A) OF THIS 5
SECTION: 6
(1) THE COMMISSIONER SHALL RE MOVE THE BUSINESS FR OM THE 7
LIST MAINTAINED UNDE R SUBSECTION (C)(1) OF THIS SECTION; AND 8
(2) THE BUSINESS MAY NOT BE ELIGIBLE FOR THE GOOD LABOR 9
PRACTICES EVALUATION FACTOR FOR 12 MONTHS FOLLOWING THE 10
DETERMINATION MADE UNDER THIS SUBSECTIO N. 11
(E) THE CHIEF PROCUREMENT OFFICER, IN CONSULTATION WITH THE 12
COMMISSIONER , MAY ADOPT REGULATION S TO IMPLEMENT THE P ROVISIONS OF 13
THIS SUBTITLE. 14
14–904. 15
(A) IN THIS SECTION , “PERCENTAGE PREFERENC E” MEANS THE 16
PERCENTAGE OF THE LO WEST RESPONSIVE BID SU BMITTED BY A RESPONS IBLE 17
BIDDER WHO IS NOT A GOOD LABOR PRACTICES CERTIFIED BUSINESS B Y WHICH A 18
RESPONSIVE BID BY A GOOD LABOR PRACTICES CERTIFIED BUSINESS M AY: 19
(1) EXCEED THE LOWEST BI D; AND 20
(2) BE AWARDED A PROCURE MENT CONTRACT UNDER THIS 21
SUBTITLE. 22
(B) THE CHIEF PROCUREMENT OFFICER, IN CONSULTATION WITH THE 23
SECRETARY, SHALL ESTABLISH A PE RCENTAGE PREFERENCE OF AT LEAST 5% FOR 24
A GOOD LABOR PRACTIC ES CERTIFIED BUSINES S. 25
(C) THE PERCENTAGE PREFER ENCE ESTABLISHED UND ER THIS SECTION 26
SHALL BE IN ADDITION TO ANY OTHER PREFERE NCE FOR WHICH THE BU SINESS IS 27
QUALIFIED UNDER THIS TITLE. 28
(A) A GOOD LABOR PRACTICES EVALUATION FACTOR FO R GOOD LABOR 29
PRACTICES DESCRIBED IN § 14–903(A) OF THIS SUBTITLE SHA LL BE INCLUDED IN 30
THE TECHNICAL EVALUATION FACTORS F OR COMPETITIVE SEALE D PROPOSALS FOR 31
A PROPOSAL SUBMITTED FOR A CONTRACT DESCR IBED IN § 14–902 OF THIS 32
SUBTITLE. 33 50 HOUSE BILL 500
(B) THE GOOD LABOR PRACTI CES EVALUATION FACTO R SHALL BE: 1
(1) IF A POINT SYSTEM IS USED FOR EVALUATION OF PROPOSALS , 10% 2
OF THE TOTAL ALLOCAB LE TECHNICAL POINTS ; OR 3
(2) IF A POINT SYSTEM IS NOT USED FOR EVALUAT ION OF PROPOSALS , 4
RANKED IN ITS RELATI VE ORDER OF IMPORTAN CE. 5
14–905. 6
(A) A PERSON MAY NOT ENGAG E IN CONDUCT PROHIBI TED UNDER § 7
14–605(A) OR § 14–606 OF THIS TITLE IN CONNECTION WITH ANY ACT UNDERTA KEN 8
TO OBTAIN, RENEW, MAINTAIN, OR EXERCISE A GOOD L ABOR PRACTICES 9
CERTIFICATION . TO QUALIFY FOR A GOO D LABOR PRACTICES EV ALUATION FACTOR . 10
(B) THE PENALTIES ESTABLI SHED IN §§ 14–605(B) AND (C) AND 14–606 OF 11
THIS TITLE APPLY TO VIOLAT IONS OF THIS SUBTITL E. 12
14–906. 13
IN ADDITION TO THE PE NALTIES ESTABLISHED UNDER § 14–905 OF THIS 14
SUBTITLE, A PERSON THAT WILLFU LLY MISREPRESENTS OR WILLFULLY OMITS ANY 15
MATERIAL MATTER IN C ONNECTION WITH AN AP PLICATION OR REQUIRE D 16
DISCLOSURE FOR PURPOSES O F OBTAINING OR RETAI NING A CONTRACT OR 17
SUBCONTRACT UNDER TH IS SUBTITLE MAY BE S UBJECT TO: 18
(1) SUSPENSION OR DEBARM ENT UNDER TITLE 16 OF THIS ARTICLE; 19
OR 20
(2) CIVIL PENALTIES UNDE R THE MARYLAND FALSE CLAIMS ACT. 21
15–103. 22
(A) It is the policy of the State to make a payment under a procurement contract 23
[within 30 days]: 24
(1) WITHIN 30 DAYS after the day on which the payment becomes due 25
[under the procurement contract; or 26
(2) if later, after the day on which] AND the unit receives [an] A PROPER 27
invoice; OR 28
HOUSE BILL 500 51
(2) FOR A SMALL BUSINESS RESERVE CONTRACT , WITHIN 15 DAYS 1
AFTER THE DAY ON WHI CH THE PAYMENT BECOM ES DUE AND THE UNIT RECEIVES A 2
PROPER INVOICE . 3
(B) INTEREST SHALL ACCRUE IN ACCORDANCE WITH § 15–104 OF THIS 4
SUBTITLE. 5
15–111. 6
(a) Within 60 days after the end of each fiscal year, each primary procurement 7
unit shall submit to the Chief Procurement Officer a report on each procurement contract 8
that was awarded during the preceding fiscal year, whether the procurement was 9
conducted by the primary procurement unit or subject to review by the primary 10
procurement unit, and: 11
(1) was exempt from the notice requirements of § 13–103(c) of this article 12
because the procurement officer reasonably expected that the procurement contract would 13
be performed entirely outside this State and the District of Columbia; 14
(2) cost more than [$100,000] THE SMALL PROCUREMEN T AMOUNT 15
SPECIFIED IN § 13–109 OF THIS ARTICLE and was awarded for the procurement of 16
services, construction related services, architectural services, or engineering services; or 17
(3) was awarded on the basis of: 18
(i) § 13–107 of this article (“Sole source procurement”); 19
(ii) § 13–108(a) of this article (“Emergency procurement”); or 20
(iii) § 13–108(c) of this article (“Expedited procurement”). 21
15–112. 22
(e) [Before January 1, 2017, the] THE Board shall propose UPDATED regulations 23
AS NEEDED that provide for an expedited change order process for change orders valued 24
at more than [$50,000] THE SMALL PROCUREMEN T AMOUNT SPECIFIED I N § 13–109 25
OF THIS ARTICLE . 26
15–112.1. 27
(A) IN THIS SECTION , “CONTRACT MODIFICATIO N” MEANS A WRITTEN 28
ALTERATION THAT : 29
52 HOUSE BILL 500
(1) AFFECTS SPECIFICATIO NS, DELIVERY POINT , DATE OF DELIVERY , 1
PERIOD OF PERFORMANC E, PRICE, QUANTITY, OR OTHER PROVISIONS OF A 2
PROCUREMENT CONTRACT ; AND 3
(2) IS ACCOMPLISHED BY M UTUAL ACTION OF THE PARTIES TO AN 4
EXISTING PROCUREMENT CONTRACT. 5
(B) THIS SECTION APPLIES TO ALL STATE PROCUREMENT CON TRACTS. 6
(C) A PROCUREMENT OFFICER MAY APPROVE CONTRACT MODIFICATIO NS 7
UNDER THE FOLLOWING CONDITIONS: 8
(1) THE CONTRACT MODIFIC ATION DOES NOT MATER IALLY CHANGE 9
THE SCOPE OF WORK ; AND 10
(2) THE CONTRACT MODIFIC ATION DOES NOT INCRE ASE THE TOTAL 11
VALUE OF THE CONTRAC T TO AN AMOUNT THAT EXCEEDS THE SMALL 12
PROCUREMENT AMOUNT S PECIFIED IN § 13–109 OF THIS ARTICLE. 13
(D) THE PRIMARY PROCUREME NT UNIT, THE CHIEF PROCUREMENT 14
OFFICER, OR THE CHIEF PROCUREMENT OFFICER’S DESIGNEE MAY APPRO VE A 15
CONTRACT MODIFICATIO N UP TO $1,000,000 $200,000 THAT DOES NOT MATERI ALLY 16
CHANGE THE SCOPE OF WORK. 17
(E) A PROCUREMENT OFFICER SHALL DOCUMENT A CON TRACT 18
MODIFICATION MADE UN DER SUBSECTION (C) OR (D) OF THIS SECTION. 19
(F) THE CHIEF PROCUREMENT OFFICER SHALL ESTABLI SH GUIDELINES 20
FOR THE CONTRACT MOD IFICATION PROCESS . 21
17–103. 22
(a) (1) Before a public body awards a construction contract exceeding 23
[$100,000] THE SMALL PROCUREMEN T AMOUNT SPECIFIED I N § 13–109 OF THIS 24
ARTICLE FOR CONSTRUC TION, the contractor shall provide payment security and 25
performance security that meet the requirements of § 17–104 of this subtitle. 26
(2) The security shall be: 27
(i) for performance security, in an amount that the public body 28
considers adequate for its protection; and 29
(ii) for payment security, at least 50% of the total amount payable 30
under the contract. 31
HOUSE BILL 500 53
(b) A public body, other than the State or a unit of the State government, may 1
require payment security or performance security for a construction contract if: 2
(1) the contract exceeds [$50,000] $100,000 but does not exceed 3
[$100,000] THE SMALL PROCUREMEN T AMOUNT SPECIFIED I N § 13–109 OF THIS 4
ARTICLE; and 5
(2) the amount of the security does not exceed 50% of the contract amount. 6
17–602. 7
(a) There is a State Apprenticeship Training Fund in the Department. 8
(b) The Fund consists of: 9
(1) payments made by contractors or subcontractors in accordance with 10
this subtitle and Subtitle 6A of this title; [and] 11
(2) penalties collected as a result of violations of this subtitle and Subtitle 12
6A of this title; AND 13
(3) PENALTIES COLL ECTED AS A RESULT OF VIOLATIONS OF TITLE 14
14, SUBTITLE 8 OF THIS ARTICLE. 15
(e) The Secretary shall use money in the fund to: 16
(1) promote preapprenticeship programs and other workforce development 17
programs in the State’s public secondary schools and community colleges that assist 18
students in preparing for and entering apprenticeship training programs; and 19
(2) pay any costs associated with carrying out the provisions of this subtitle 20
and Subtitle 6A of this title OR TITLE 14, SUBTITLE 8 OF THIS ARTICLE. 21
17–604. 22
(a) A subcontractor that performs work [valued] at [$100,000 or more] A VALUE 23
EXCEEDING THE SMALL PROCUREMENT AMOUNT S PECIFIED IN § 13–109 OF THIS 24
ARTICLE for a covered project shall provide to a unit written verification that: 25
(1) the subcontractor participates in an apprenticeship training program 26
for each covered craft in which it will employ persons for the covered project; 27
(2) the subcontractor will make payments to the Fund; or 28
54 HOUSE BILL 500
(3) the subcontractor will make payments in amounts determined under § 1
17–605 of this subtitle to a registered apprenticeship program or to an organization that 2
has registered apprenticeship programs for the purpose of supporting these programs. 3
19–114. 4
Every contract and subcontract shall contain a nondiscrimination clause that [reads 5
as follows] IS SUBSTANTIALLY SIM ILAR TO THE FOLLOWIN G: 6
“As a condition of entering into this agreement, the company represents and warrants that 7
it will comply with the State’s Commercial Nondiscrimination Policy, as described under 8
Title 19 of the State Finance and Procurement Article of the Annotated Code of Maryland. 9
As part of such compliance, the company may not discriminate on the basis of race, color, 10
religion, ancestry or national origin, sex, age, marital status, sexual orientation, gender 11
identity, or on the basis of disability or other unlawful forms of discrimination in the 12
solicitation, selection, hiring, or commercial treatment of subcontractors, vendors, 13
suppliers, or commercial customers, nor shall the company retaliate against any person for 14
reporting instances of such discrimination. The company shall provide equal opportunity 15
for subcontractors, vendors, and suppliers to participate in all of its public sector and 16
private sector subcontracting and supply opportunities, provided that nothing contained in 17
this clause shall prohibit or limit otherwise lawful efforts to remedy the effects of 18
marketplace discrimination that have occurred or are occurring in the marketplace. The 19
company understands and agrees that a material violation of this clause shall be considered 20
a material breach of this agreement and may result in termination of this agreement, 21
disqualification of the company from participating in State contracts, or other sanctions. 22
This clause is not enforceable by or for the benefit of, and creates no obligation to, any third 23
party.”. 24
19–116. 25
Every contract that the State enters into shall include LANGUAGE SUBSTANTIAL LY 26
SIMILAR TO the following [language]: 27
“As a condition of entering into this agreement, upon the request of the Commission on 28
Civil Rights, and only after the filing of a complaint against the company under Title 19 of 29
the State Finance and Procurement Article, as amended from time to time, the company 30
agrees to: provide to the State within 60 days after the request a truthful and complete list 31
of the names of all subcontractors, vendors, and suppliers that the company has used in the 32
past 4 years on any of its contracts that were undertaken within the State of Maryland, 33
including the total dollar amount paid by the contractor on each subcontract or supply 34
contract. The company further agrees to cooperate in any investigation conducted by the 35
State pursuant to the State’s Commercial Nondiscrimination Policy as set forth under Title 36
19 of the State Finance and Procurement Article of the Annotated Code of Maryland, to 37
provide any documents relevant to any investigation that is requested by the State. The 38
company understands and agrees that violation of this clause shall be considered a material 39 HOUSE BILL 500 55
breach of this agreement and may result in contract termination, disqualification by the 1
State from participating in State contracts, and other sanctions.”. 2
Article – State Government 3
4–113. 4
(a) (1) In this section the following words have the meanings indicated. 5
(2) “Departments” means: 6
(i) the Office of the Comptroller; 7
(ii) the Office of the State Treasurer; 8
(iii) the Department of Budget and Management; 9
(iv) the Department of Information Technology; and 10
(v) the Department of General Services. 11
(3) “Financial management infrastructure” means the information 12
technology infrastructure that is used to maintain the general ledger and accountancy for 13
the State, including subledger functions that enable the management of all payments and 14
fund transfers throughout the State. 15
(4)
“
21st Century Financial Systems Enterprise” means a modern 16
cloud–based information technology infrastructure. 17
(b) In consultation with a designated representative from the Modernize 18
Maryland Oversight Commission, the departments shall: 19
(5) establish working groups as needed, INCLUDING A WORKING GROUP 20
TO STUDY WHETHER IMM EDIATE OR PROMPT PAY MENT FEATURES CAN BE ADDED 21
TO THE 21ST CENTURY FINANCIAL SYSTEMS ENTERPRISE TO DETERMI NE 22
WHETHER BOTH PRIME C ONTACTORS AND SUBCON TRACTORS ON A STATE 23
PROCUREMENT CONTRACT CAN BE PAID BY THE STATE AT THE SAME TIM E; and 24
Article – State Personnel and Pensions 25
13–401. 26
(a) In this subtitle the following words have the meanings indicated. 27
56 HOUSE BILL 500
(c) (1) [“Services”] EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS 1
SUBSECTION, “SERVICES” has the meaning stated in § 11–101 of the State Finance and 2
Procurement Article. 3
(2) “SERVICES” DOES NOT INCLUDE INF ORMATION TECHNOLOGY 4
SERVICES AND CYBERSECURITY . 5
SECTION 2. AND BE IT FURTHER ENACTED, That, on or before December 1, 6
2025, the Procurement Advisor to the Board of Public Works shall conduct a study of the 7
economic impacts of instituting an in–State preference for Maryland vendors for all State 8
procurements and submit a report of its findings and recommendations to the Board of 9
Public Works and, in accordance with § 2–1257 of the State Government Article, the 10
General Assembly. 11
SECTION 2. 3. AND BE IT FURTHER ENACTED, That the publi sher of the 12
Annotated Code of Maryland, in consultation with and subject to the approval of the 13
Department of Legislative Services, shall correct, with no further action required by the 14
General Assembly, cross–references and terminology rendered incorrect by Section 1 of this 15
Act. The publisher shall adequately describe any correction that is made in an editor’s note 16
following the section affected. 17
SECTION 3. 4. AND BE IT FURTHER ENACTED, That this Act shall take effect 18
October 1, 2025. 19
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.