This chapter provides that maximum contracting opportunities be extended to veteran-owned small business enterprises, as both prime contractors and subcontractors, and establishes that: Each procurement agency shall structure its procedures for making procurements to try to achieve an overall minimum of 3 percent of the unit's total dollar value of all procurement contracts made directly or indirectly with veteran-owned small business enterprises; and The requirements of this chapter may be applied to individual task orders competitively procured among contractors under a master contract as provided in COMAR 21.05.13.05. In this chapter, the following terms have the meanings indicated. Terms Defined. “Certification” means a determination by the certification agency through the procedures outlined in this chapter that a legal entity is a veteran-owned small business enterprise (VSBE) for purposes of these regulations. “Certification agency” means the Governor’s Office of Small, Minority & Women Business Affairs (GOSBA). “Certified VSBE” means a veteran-owned small business that holds a certification issued by the certification agency. “Control” means the exercise of the power to manage and operate a business enterprise. “Database” means the State’s Internet-based electronic procurement system. “Procurement agency” has the meaning stated in COMAR 21.01.02.01B. “Vendor” has the meaning stated in COMAR 21.01.02.01B. “Verification” means a business owner that is verified by the Maryland Department of Veterans Affairs or the U.S. Small Business Administration as a veteran. “Veteran” means an individual who is verified as having served on active duty in the armed forces of the United States, other than for training, and was discharged or released under conditions other than dishonorable. “Veteran-owned small business enterprise (VSBE)” means a for-profit business, other than a joint venture, that: Meets the size standards adopted by the U.S. Small Business Administration in 13 CFR §121.201 and any subsequent revision of that regulation; and Is at least 51 percent owned by one or more individuals who: Are veterans; and Control the management and daily operations of the business. Except to the extent that any provisions conflict with federal law, or as provided in §B of this regulation, this chapter applies to every procurement of supplies, services, maintenance, construction, construction-related services, architectural services, and engineering services by a procurement agency. Small procurements are not subject to this chapter. These procurements shall be made in accordance with COMAR 21.05.07. Procurement agencies shall use the Database as the primary resource to identify certified VSBEs when considering the application of a VSBE participation goal. Procurement agencies may also utilize the U.S. Small Business Administration and any other veteran resource or database to assist in identifying potential veteran vendors when considering the application of a VSBE participation goal. Nothing in this chapter is to be construed to relieve a procurement agency from attempting to achieve the State’s goal for certified VSBE participation. Each procurement agency shall make its procurements in accordance with this chapter. The Department of General Services, in executing its responsibility over procurement of information technology equipment and related services, shall require procurement agencies to make those procurements in compliance with this chapter. When delegating procurement authority to procurement agencies, the Department of General Services shall condition the delegation on compliance with this chapter. Procurement agencies shall use the forms and affidavits developed by the Governor’s Office of Small, Minority, and Women Business Affairs for reporting procedures required by this title. Before awarding a contract that includes a VSBE goal, the procurement officer shall use the Database to confirm that the VSBE vendor named to fulfill an established VSBE contract goal is certified by the Governor's Office of Small, Minority & Women Business Affairs (GOSBA). The head of each procurement agency shall designate an employee to be a VSBE liaison officer in the administration of that agency’s VSBE Program. The VSBE liaison officer shall be a high-level employee reporting directly to a Secretary, Deputy Secretary, or head of a procurement agency. The VSBE liaison officer is responsible for coordinating agency outreach efforts to the veteran business community, reviewing agency contracting procedures to ensure compliance with this chapter, assisting in the resolution of contracting issues, and for submitting required VSBE Program reports or information. Each procurement agency shall make a report annually within 90 days following the close of the fiscal year to the Governor’s Office of Small, Minority & Women Business Affairs that includes: The total number, value, and procurement category of its procurements from State-certified VSBEs as prime contractors, and separately as subcontractors; The number of waivers granted pursuant to Regulation .09 of this chapter; and An evaluation by the procurement agency of the success of its VSBE Program, which shall include a brief description of the procurement agency’s outreach efforts to VSBE prime and VSBE subcontractors. Each procurement agency shall furnish any other information or periodic reports requested by the Governor’s Office of Small, Minority & Women Business Affairs in connection with its VSBE procurements, or any other matters related to the administration, effectiveness, or continuation of the VSBE Program. The Governor’s Office of Small, Minority & Women Business Affairs shall prepare an annual report summarizing VSBE participation throughout the State, for publication on its website as well as submission by the end of each calendar year to the Board of Public Works, to the Legislative Policy Committee of the Maryland General Assembly, and to each procurement agency. To attain the overall and specific goals under Regulation .01A of this chapter, procurement agencies shall set, where appropriate, an overall VSBE goal, expressed as a percentage of the dollar value of the contract. Goal Setting Generally. A procurement agency shall assess the potential for VSBE prime and subcontractor participation in each contract and estimate the amount of participation if any before initiating the procurement. Some factors which may be used to determine the level of VSBE participation include: The extent to which direct solicitation at the prime contract level, subcontracting, or a combination of both is determined most likely to result in maximum VSBE participation in the contract; The number of certified VSBEs listed in the Database in addition to veteran-owned firms identified by the U.S. Small Business Administration and other resources and databases used to identify veteran-owned firms for a particular supply, service, maintenance, construction, construction-related service, architectural service, or engineering service; The geographical proximity, when relevant, of VSBEs to the location of the work to be performed; and The feasibility of subcontracting opportunities given the nature and extent of the proposed contract. VSBE Subcontracting Provisions. Solicitation Content. The solicitation shall contain provisions requiring bidders or offerors to: Identify specific work categories within the scope of the procurement appropriate for subcontracting; Conduct outreach through the Database or utilize the U.S. Small Business Administration and other resources and databases to assist in identifying potential veteran vendors. The veteran-owned vendor shall be a certified VSBE at the time of submission of the bid or proposal. Solicit certified VSBEs and veteran-owned firms in writing at least 10 days before bids or proposals are due, describing the identified work categories and providing instructions on how to bid on the subcontracts; Attempt to make personal contact with the VSBEs solicited and to document these attempts; Assist VSBEs to fulfill, or to seek waiver of, bonding requirements; and Attempt to attend prebid or other meetings the procurement agency schedules to publicize contracting opportunities to VSBEs. If a solicitation contains an MBE goal and a VSBE goal, participation by a subcontractor dually-certified as an MBE and a VSBE may be counted toward meeting both the MBE and VSBE contract goals to the extent its participation meets the cumulative but distinct MBE and VSBE contract goals, or portions thereof that it is committed to perform. Example: If the solicitation contains a 25 percent MBE goal and a 5 percent VSBE goal, the dually certified subcontractor shall perform 30 percent of the contract to obtain both goals. Participation by a dually-certified subcontractor may be counted toward the agency’s overall MBE and VSBE goals. On forms provided by the procurement agency, a bidder or offeror shall submit with its bid or proposal: A completed VSBE utilization affidavit including either an agreement to meet the certified VSBE participation goal or a request for a full or partial waiver; and A completed VSBE participation schedule that identifies the VSBE that the bidder or offeror agrees to utilize in the performance of the contract and the percentage of contract value attributed to each VSBE. The VSBE participation schedule shall: Include the name of each VSBE that will participate in the project; and Include the percentage of the contract to be paid to each VSBE for the work or supply. The failure of a bidder to accurately complete and submit the VSBE utilization affidavit and participation schedule may result in a determination that the bid is not responsive. The failure of an offeror to accurately complete and submit the VSBE utilization affidavit and the VSBE participation schedule may result in a determination that the proposal is not susceptible of being selected for award. The names of prime contractors requesting or purchasing solicitation documents for construction contracts shall be made available on request to any VSBE whose specialty suggests an interest in subcontracting. Each prime contractor receiving solicitation documents as part of a procurement with a VSBE goal shall be given the web address for the Database for purposes of soliciting subcontract quotations, bids, or offers from VSBEs. Counting Prime Participation Toward Overall and Contract Goals. A procurement agency may count a prime contractor dually-certified as an MBE and a VSBE toward the agency’s overall VSBE and MBE goals. A procurement agency may count the distinct, clearly defined portion of the work of the contract that a VSBE certified prime performs with its own work force toward meeting up to 100 percent of the contract’s VSBE goal. Direct Solicitation. As part of the solicitation process being employed for the business community in general, and in addition to the public notice requirements of COMAR 21.05.02.04 and 21.05.03.02B, a procurement agency shall send a copy of the solicitation or notice of the solicitation, or both, to a sufficient number of VSBEs listed in the Database, as determined by the procurement officer, as is likely to result in VSBE responses to the solicitation. Notification. Except for sole source, small, and emergency procurements, a copy of the solicitation notice for each procurement with an VSBE goal may be sent in an electronic format to the Maryland Department of Veterans Affairs for distribution to the appropriate veteran and small business assistance agencies and trade organizations. Prebid and Preproposal Conferences. When prebid or preproposal conferences are held, the procurement agency shall explain the VSBE subcontracting goal if applicable, the VSBE provisions of the solicitation, the documentation required, and its relationship to the determinations that will be made in connection with the evaluation process. The documentation in §C of this regulation is considered part of the contract and shall be furnished by the apparent successful bidder or offeror to the procurement officer within 10 working days from notification of apparent award, or from the date of the award, whichever is earlier. If the documentation is not furnished within the specified time, the bidder or offeror may be rejected as nonresponsible. A VSBE subcontractor project participation statement shall be furnished and signed by the bidder or offeror and each VSBE listed in the participation schedule. The project participation statement shall include: A statement of intent to enter into a contract between the prime contractor and each subcontractor; If a contract is executed between the procurement agency and the prime contractor or if the prime contract has been awarded and the procurement officer makes a request, copies of the subcontract agreement or agreements; and The amount and type of bonds required of VSBE subcontractors, if any. Other documentation considered appropriate by the procurement agency to ascertain bidder or offeror responsibility in connection with the contract VSBE participation goal shall be furnished by the bidder or offeror. If the VSBE utilization affidavit and participation schedule of the apparent successful bidder or offeror do not achieve the contract goal for VSBE participation, the apparent successful bidder or offeror shall submit documentation supporting the waiver request that was included with the bid or proposal as provided in Regulation .09 of this chapter. An agency head may waive any of the provisions of Regulations .07 and .08 of this chapter for a sole source, expedited, or emergency procurement in which the public interest cannot reasonably accommodate use of those procedures. If, for any reason, the apparent successful bidder or offeror is unable to achieve the VSBE goal, the bidder or offeror may request, in writing, a waiver to include the following: A detailed statement of the efforts made to select portions of the work proposed to be performed by VSBEs; A detailed statement of the efforts made to contact and negotiate with VSBEs, including: The names, addresses, dates, and telephone numbers of the VSBEs; and A description of the information provided to VSBEs regarding the plans, specifications, and anticipated time schedule for portions of the work to be performed; As to each VSBE that placed a subcontract quotation or offer that the apparent successful bidder or offeror considers to be unacceptable, a detailed statement of the reasons for this conclusion; and A list of VSBEs found to be unavailable, which shall be accompanied by a VSBE Subcontractor Unavailability Certificate signed by the VSBE, or a statement from the apparent successful bidder or offeror that the VSBE refused to give the written verification. A waiver of a VSBE contract goal may be granted only upon a reasonable demonstration by the bidder or offeror that VSBE subcontract participation was unable to be obtained, or was unable to be obtained at a reasonable price, and if the agency head or designee determines that the public interest is served by a waiver. In making a determination under this section, the agency head or designee may consider engineering estimates, catalogue prices, general market availability, and availability of VSBEs in the area in which the work is to be performed, other bids or offers and subcontract bids or offers substantiating significant variances between VSBE and non-VSBE cost of participation, and their impact on the overall cost of the contract to the State and any other relevant factor. An agency head may waive the provisions of Regulations .07 and .08 of this chapter for a sole source, expedited, or emergency procurement in which the public interest cannot reasonably accommodate use of those procedures. When a waiver is granted, except waivers under §C of this regulation, one copy of the waiver determination and the reasons for the determination shall be kept by the VSBE liaison officer with another copy forwarded to the Governor's Office of Small, Minority & Women Business Affairs. If, at any time after submission of a bid or proposal and before execution of a contract, the apparent successful bidder or offeror determines that a VSBE listed on the participation schedule required under Regulation .07 of this chapter has become or will become unavailable, then the apparent successful bidder or offeror shall immediately notify the procurement officer in writing. An apparent successful bidder or offeror shall obtain approval from the procurement officer before any changes to the participation schedule may be made. The bidder or offeror shall make reasonable efforts to substitute another VSBE subcontractor to meet the goal. The request to amend the VSBE participation schedule shall include: An explanation of the reason for inclusion of the unavailable or ineligible firm on the original VSBE participation schedule; The name of each certified VSBE subcontractor that will substitute for the unavailable or ineligible certified VSBE subcontractor; A description of work to be performed by each certified VSBE subcontractor; The percentage of the contract to be paid to the certified VSBE subcontractor for the work or supply; and A full description of the bidder's or offeror's efforts to substitute another certified VSBE subcontractor to perform the work that the unavailable or ineligible certified VSBE subcontractor would have performed. The procurement officer shall consult with the VSBE liaison before deciding whether to approve a request to amend the VSBE participation schedule. Amendments to the VSBE Participation Schedule Occurring After the Date of Contract Award. For purposes of this regulation, “good cause” includes documented nonperformance by the certified VSBE or election by the certified VSBE to cease work on the contract. Failure of the certified VSBE to provide a bond as requested by the contractor is not considered to be nonperformance by the certified VSBE if the requested bond violates State Finance and Procurement Article, §13-227, Annotated Code of Maryland. A contractor may not terminate or otherwise cancel the contract of a certified VSBE listed on the VSBE participation schedule without: Showing good cause why the contract with the certified VSBE should be terminated or cancelled; Obtaining the prior written consent of the VSBE liaison; Obtaining approval of the head of the unit; and Subsequently amending the contract. The prime contractor shall make reasonable efforts to substitute another VSBE contractor to meet the goal, when good cause is shown. The procurement agency shall send a copy of the VSBE liaison's written consent to the Governor's Office of Small, Minority & Women Business Affairs. To ensure compliance with VSBE subcontract participation goals, the procurement agency shall verify that the VSBEs listed in the participation schedule are actually performing work and receiving compensation as set forth in the schedule. General. The certification agency is designated to certify, recertify, and decertify VSBEs. A procurement agency may not permit a vendor to participate in a procurement as a veteran-owned vendor unless it is identified as a certified VSBE in the Database. Vendor Registration. A veteran vendor seeking to be recognized as a certified VSBE shall register as a vendor in the State’s Internet-based electronic procurement system. A registered vendor shall submit veteran verification and complete the VSBE Program application in the State’s Internet-based electronic procurement system. Information Which May Be Requested. The certification agency may request the following information to assist in any certification, recertification, decertification, or participation determination. Failure to furnish the requested information within a reasonable time as specified in writing may result in an administrative closing of an application, a denial of certification or recertification, or a determination to decertify. The information consists of: Copies of articles of incorporation, bylaws, minutes, shareholder agreements, stock certificates, stock transfer ledgers, any additional profit-sharing agreements or buyout rights, or in the case of a partnership, the partnership agreement; Current financial statements, business licenses, federal personal income tax returns for the most current 2 years, including all schedules, federal business tax returns for the past 3 years, including all schedules, cancelled checks, resumes of principal parties, and any relevant personal and third-party agreements, such as rental and management agreements; and Copies of supporting veteran-related documents issued by the federal government. A certified VSBE shall have certified status in the Database at the time the contract is awarded in order for its participation to be counted toward the VSBE contract goal. All payments made shall be counted toward the VSBE goal under a contract entered into when the VSBE was certified. Failure of a certified VSBE to maintain certification may not be the cause of the termination of the contractual relationship for the remainder of the term of the contract. State Finance and Procurement Article, §§14-601—14-605; Chs. 343 and 344, Acts of 2015; Chs. 708 and 709, Acts of 2017; Ch. 740, Acts of 2018; Ch. 79, Acts of 2021 Effective date: July 23, 2012 (39:14 Md. R. 839) Regulation .01A amended effective March 11, 2019 (46:5 Md. R. 310) Regulation .01B amended effective June 29, 2020 (47:13 Md. R. 643) Regulation .02B amended effective January 2, 2017 (43:26 Md. R. 1449) Regulation .04D amended effective July 15, 2019 (46:14 Md. R. 623) Regulation .05 amended effective January 2, 2017 (43:26 Md. R. 1449) Regulation .05B amended effective March 16, 2015 (42:5 Md. R. 488) Regulations .01—.10 recodified from COMAR 21.11.13 to COMAR 21.11.14 effective December 28, 2020 (47:26 Md. R. 1108) Chapter revised effective May 16, 2022 (49:10 Md. R. 562) Regulation .01A amended effective September 16, 2024 (51:18 Md. R. 810) Regulation .02B amended effective April 1, 2024 (51:6 Md. R. 270) Regulation .03C, D amended effective April 1, 2024 (51:6 Md. R. 270) Regulation .04B amended effective September 18, 2023 (50:18 Md. R. 800) Regulation .04E adopted effective April 1, 2024 (51:6 Md. R. 270) Regulation .06B amended effective April 1, 2024 (51:6 Md. R. 270) Regulation .07B, C, E amended effective April 1, 2024 (51:6 Md. R. 270) Regulation .09A amended effective April 1, 2024 (51:6 Md. R. 270) Regulation .12 Verification repealed and new Regulation .12 Certification Procedures adopted effective April 1, 2024 (51:6 Md. R. 270)