Chapter 01. Small Business Procurements
Regulation .01 Definitions.LinkCopy Citation
A.
In this chapter, the following words have the meanings indicated.
B.
Terms Defined.
(1)
“Certified small business” (“CSB”) means a business, other than a nonprofit business, that:
(a)
Is certified by the Governor's Office of Small, Minority, and Women Business Affairs pursuant to regulations adopted by that Department; and
(b)
Meets the criteria for a small business as defined under COMAR 21.01.02.01B.
(2)
“Disabled veteran” means a veteran who has been certified by the U.S. Department of Veterans Affairs as having a service-connected disability, regardless of the disability rating.
(3)
“Disabled-veteran-owned small business” means a small business as defined under COMAR 21.01.02.01B that is at least 51 percent owned and controlled by one or more individuals who are disabled veterans.
(4)
“Economically disadvantaged individual” means an individual as defined in COMAR 21.11.03.03.B.
(5)
“Veteran” means a veteran as defined in 38 U.S.C. §101(2) who is domiciled in Maryland.
(6)
“Veteran-owned small business” means a small business as defined under COMAR 21.01.02.01B that is at least 51 percent owned and controlled by one or more individuals who are veterans.
(7)
“Small business reserve” means those procurements that are limited to responses from small businesses as provided under State Finance and Procurement Article, §14–502(c), Annotated Code of Maryland.
Regulation .02 Small Business Procurement Programs.LinkCopy Citation
A.
Two distinct procurement programs, the small business preference program and the small business reserve program, are structured to assist small businesses in obtaining State contracts.
B.
The small business preference program specifically authorizes a procuring unit to apply certain percentage price preferences in favor of certified small businesses when evaluating and awarding bids on those procurements designated for a small business preference.
C.
Except as provided in Regulation .06A(3) of this chapter, the small business reserve program applies to all procurements by a procurement unit and restricts award of a contract to certified small businesses only.
Regulation .03 General.LinkCopy Citation
A.
A procurement under this chapter is subject to all requirements and procedures otherwise applicable to the procurement. Except as otherwise provided by law, the provisions of this chapter supplement, but do not replace, other provisions of this title.
B.
Small Business Assistance. The head of each participating procurement agency or a designee shall:
(1)
Assist small businesses in complying with the procedures for submitting bids and proposals on State contracts; and
(2)
Consistent with the provisions of this title, attempt to simplify procedures, when practicable, to increase the opportunities for small businesses to participate in preference and reserve procurements.
C.
Rejection of Bids or Proposals. The procurement officer shall notify a small business of the reason for rejection of its bid or proposal under a small business preference or a small business reserve procurement.
Regulation .04 Small Business Eligibility/Certification.LinkCopy Citation
A.
To be eligible to receive a small business price preference under the small business preference program, or to be eligible for award of a procurement under the small business reserve program, a business must be certified by the Governor’s Office of Small, Minority, and Women Business Affairs as a small business in accordance with regulations adopted by the Governor’s Office of Small, Minority, and Women Business Affairs. A business so certified shall be added to the certified small business list maintained by the Governor’s Office of Small, Minority, and Women Business Affairs. To maintain its certification as a small business, a business shall reapply for certification every year, not later than on the anniversary date of the initial certification.
B.
The Governor’s Office of Small, Minority, and Women Business Affairs shall certify a business as a small business for the exclusive purpose of pursuing out-of-State contracts if the business has:
(1)
250 or fewer employees; or
(2)
Average annual gross receipts of $10,000,000 or less averaged over its most recently completed 3 fiscal years.
C.
Affidavit. Upon request of the Governor’s Office of Small, Minority, and Women Business Affairs, a business seeking certification or recertification as a small business shall execute and submit a Small Business Affidavit in the form prescribed under §E of this regulation.
D.
Other Information. The Governor’s Office of Small, Minority, and Women Business Affairs may, in its sole discretion, request any other information in support of the certification request.
E.
Affidavit Form. The Small Business Affidavit shall be in the following form:
1.
I am the _____________________________(type or print legibly your title, office, or capacity) of ________________(type or print legibly the correct and complete company name) hereinafter referred to as the “Business.”
2.
The Business is:
(a)
a for-profit enterprise;
(b)
not a broker, as defined in COMAR 21.01.02.01B(13-1);
(c)
independently owned and operated;
(d)
not a subsidiary of another business;
(e)
not dominant in its field of operation;
(f)
With respect to employees, either:
(i)
The wholesale operations of the Business did not employ more than 50 persons in its most recently completed 3 fiscal years;
(ii)
The retail operations of the Business did not employ more than 25 persons in its most recently completed 3 fiscal years;
(iii)
The manufacturing operations of the Business did not employ more than 100 persons in its most recently completed 3 fiscal years;
(iv)
The service operations of the Business did not employ more than 100 persons in its most recently completed 3 fiscal years;
(v)
The construction operations of the Business did not employ more than 50 persons in its most recently completed 3 fiscal years; or
(vi)
The architect and engineering services of the Business did not employ more than 100 persons in its most recently completed 3 fiscal years; and
(g)
With respect to gross sales:
(i)
The gross sales of its wholesale operations did not exceed an average of $4,000,000 in its most recently completed 3 fiscal years;
(ii)
The gross sales of its retail operations did not exceed an average of $3,000,000 in its most recently completed 3 fiscal years;
(iii)
The gross sales of its manufacturing operations did not exceed an average of $2,000,000 in its most recently completed 3 fiscal years;
(iv)
The gross sales of its service operations did not exceed an average of $10,000,000 in its most recently completed 3 fiscal years;
(v)
The gross sales of its construction operations did not exceed an average of $7,000,000 in its most recently completed 3 fiscal years; and
(vi)
The gross sales of its architectural and engineering operations did not exceed an average of $4,500,000 in its most recently completed 3 fiscal years.
Note: If a business has not existed for 3 years, the employment and gross sales shall be the average(s) for each year or part of year during which the business has been in existence.
3.
For the exclusive purpose of pursuing out-of-State contracts, the business has:
(a)
250 or fewer employees; or
(b)
Average annual gross receipts of $10,000,000 or less averaged over its most recently completed three fiscal years.
4.
For small businesses claiming an additional percentage preference for being veteran-owned (2%) or disabled-veteran-owned (3%), initial next to the applicable statement:
5.
I am fully authorized by the Business to provide this Affidavit.
6.
Upon request of the State of Maryland, the Business promises to provide the State promptly with copies of the complete federal and state (all states in which the Business filed returns) income tax returns for the most recently completed 3 fiscal years of the Business.
7.
I understand that the State of Maryland may rely upon this affidavit and that if the information provided by me in this certification is false I may be subject to criminal prosecution for perjury, procurement fraud, and other crimes and any contract awarded to the Business in reliance upon this Affidavit may be void or subject to termination for default.
UNDER PENALTIES OF PERJURY, I hereby swear that the matters stated in this Affidavit are true.
F.
Penalties for Submitting False Information. If information provided by the business in the affidavit or by other means is materially false, the bidder or offeror and the individual providing the false information may be subject to criminal prosecution for perjury, procurement fraud, and other crimes and may be subject to debarment, and all contract awards to the business in reliance upon the inaccurate affidavit or other information may be void or subject to termination for default.
Regulation .05 Small Business Preference Program.LinkCopy Citation
A.
Applicability. The small business preference program applies to procurements by a procuring unit.
B.
Procedures.
(1)
Designation of Small Business Preference Contracts. The heads of procurement units or their designees shall screen all procurements potentially eligible for a small business preference and shall determine which of those procurements shall be made under these procedures and the percentage preference to be applied. The determination shall be based on the availability of qualified, certified small businesses and other appropriate factors.
(2)
Solicitation Notice.
(a)
A published solicitation for a procurement designated for a small business preference shall include a statement that the procurement has been so designated and shall indicate the price preference percentage to be applied. A designated price preference may not exceed a base percentage preference of 5 percent of the total contract value. A 2 percent preference may be added to the base percentage preference for veteran-owned small businesses and a 3 percent preference may be added to the base percentage preference for disabled-veteran-owned small businesses.
(b)
The small business preference notice contained in the solicitation shall be substantially as follows:
(3)
Direct Solicitation. When soliciting bids for a procurement designated for a small business preference, the procuring unit shall send a solicitation or notice of the solicitation to all certified small businesses for the subject of the contract contained on the Governor’s Office of Small, Minority, and Women Business Affairs Certified Small Businesses List. When soliciting bids under the small business preference program, others selected from the business community at large, including certified minority business enterprises, shall also be solicited.
(4)
Evaluation. When a procurement under COMAR 21.05.02 has been designated for a small business preference, the procurement officer shall accept the most favorable responsive bid from a responsible small business if the bid does not exceed the most favorable responsive bid price received from a responsible bidder that is not certified as a small business by:
(a)
More than 5 percent;
(b)
More than 7 percent for a veteran-owned small business;
(c)
More than 8 percent for a disabled-veteran-owned small business; or
(d)
The predetermined percentage preference.
Small Business Preference (base percentage preference of 5 percent unless otherwise provided)
Regulation .06 Small Business Reserve Program.LinkCopy Citation
A.
Applicability.
(1)
All procurements by a procurement unit are eligible for designation as small business reserve procurements.
(2)
A procurement with a total dollar value between $50,000 and $500,000 shall be designated for the small business reserve.
(3)
Exemptions. The requirements of the Small Business Reserve Program do not apply to the following procurements:
(a)
Preference procurements made from a preference provider (Maryland Correctional Enterprises, community service providers, Blind Industries and Services of Maryland, individual-with-disability-owned businesses, and the Maryland Vending Facilities Program for the Blind) under COMAR 21.11.05 and 21.11.09.
(b)
Procurements involving expenditures of federal dollars, to the extent that their inclusion in the program is in violation of federal law or grant provisions.
(c)
Procurements with a total dollar value under $50,000.
(d)
Procurements for human, social, cultural, or educational services.
(e)
Certain term and master contract procurements when the Governor’s Office of Small, Minority & Women Business Affairs certifies, concurrently with review of any waiver determinations for certified minority business enterprise participation contract goals, that it is not practicable to designate the procurement for the small business reserve.
B.
Scope. To the extent practicable, each procurement unit shall structure its procurement procedures to achieve the result that a minimum of 20 percent of the unit's total dollar value of procurements for goods, supplies, services, maintenance, construction, construction-related services, architectural services, and engineering services are expended directly with certified small businesses at the prime contract level.
C.
Exclusion. For purposes of computing the procurement units total dollar value of procurements, exempt procurements under §A(2) of this regulation are excluded.
D.
Expenditures.
(1)
Forecasts. Each procurement unit shall, based upon the approved budget and other applicable factors, annually prepare a fiscal year procurement expenditure forecast. The forecast shall project expected expenditures under procurements to be awarded or currently under contract, and the unit shall develop a plan allocating a minimum of 20 percent of the total expected expenditures under these contracts directly to certified small businesses.
(2)
Included and Excluded Expenditures.
(a)
Expenditures in a current fiscal year under a multiyear contract awarded in a prior fiscal year shall be included in the procurement unit's forecast and counted toward both total procurement dollars and small business reserve dollars, as applicable. This excludes expenditures under contracts awarded before October 1, 2004.
(b)
A procuring unit may apply toward the unit's overall annual Small Business Reserve achievement awards made to a small business under designated small business reserve contracts as well as awards made to a small business under nondesignated small business reserve contracts.
(c)
Expenditures to certified small businesses awarded under small business reserve procurements may be included towards attainment of the small business reserve amount notwithstanding the procurement method used.
E.
Solicitation Notice. Each solicitation for bids or proposals for a procurement designated for a small business reserve shall include the following notice:
F.
Ineligible Bids or Proposals. Under a small business reserve procurement, a business that is not a certified small business is ineligible for award of a contract.
G.
Before awarding a contract under a procurement designated as a small business reserve procurement, the procurement officer shall verify that the apparent awardee is certified by the Governor's Office of Small, Minority, and Women Business Affairs as a small business. A procurement contract award under a small business reserve procurement may not be made to a business that has not been certified.
H.
Reporting. The procurement units shall submit a report on the Small Business Reserve Program annually as required under COMAR 21.13.01.03B.
I.
SBR Liaison Officer. The head of each procurement unit shall designate an employee to be the SBR liaison officer in the administration of that unit’s small business reserve program. The SBR liaison officer shall be a high-level employee reporting directly to a Secretary, Deputy Secretary, or head of a procurement agency. The SBR liaison officer shall be responsible for coordinating the procurement unit’s outreach efforts to the small business community, reviewing the unit’s contracting procedures to ensure compliance with small business reserve requirements, assisting in the resolution of small business reserve contracting issues, and submitting required small business reserve program reports or information.
Chapter annotations
Authority: State Finance and Procurement Article, §§12-101, 14-201—14-208, and 14-501—14-505, Annotated Code of Maryland
History: Effective date: July 1, 1981 (8:13 Md. R. II-5)
History: Regulations .01 and .02 repealed and new Regulations .01—.06 adopted effective July 4, 2005 (32:13 Md. R. 1117)
History: Regulation .01B amended effective February 23, 2009 (36:4 Md. R. 355); February 7, 2011 (38:3 Md. R. 152); March 11, 2019 (46:5 Md. R. 310); March 3, 2025 (52:4 Md. R. 221)
History: Regulation .02B amended effective July 15, 2019 (46:14 Md. R. 623); June 29, 2020 (47:13 Md. R. 643); March 3, 2025 (52:4 Md. R. 221)
History: Regulation .02C amended effective September 18, 2023 (50:18 Md. R. 800)
History: Regulation .04 amended effective March 11, 2019 (46:5 Md. R. 310); June 29, 2020 (47:13 Md. R. 643)
History: Regulation .04D amended effective February 23, 2009 (36:4 Md. R. 355); February 7, 2011 (38:3 Md. R. 152); May 13, 2013 (40:8 Md. R. 789)
History: Regulation .05 amended effective March 12, 2007 (34:5 Md. R. 562); July 15, 2019 (46:14 Md. R. 623); June 29, 2020 (47:13 Md. R. 643); March 3, 2025 (52:4 Md. R. 221)
History: Regulation .05B amended effective February 23, 2009 (36:4 Md. R. 355); March 11, 2019 (46:5 Md. R. 310)
History: Regulation .06 amended effective March 11, 2019 (46:5 Md. R. 310)
History: Regulation .06A amended effective March 13, 2006 (33:5 Md. R. 523); February 23, 2009 (36:4 Md. R. 355); September 18, 2023 (50:18 Md. R. 800)
History: Regulation .06B, D amended effective March 3, 2025 (52:4 Md. R. 221)
History: Regulation .06D, G amended effective September 5, 2022 (49:18 Md. R. 819)
History: Regulation .06E amended effective February 23, 2009 (36:4 Md. R. 355); May 13, 2013 (40:9 Md. R. 789)
History: Regulation .06I adopted effective November 24, 2014 (41:23 Md. R. 1376)
History: Regulation .06I amended effective April 29, 2024 (51:8 Md. R. 369)