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Maryland General Assembly Provides New Opportunities and Guidelines for Government Contractors

April 28, 2021

Donald J. Walsh

Maryland Emergency Procurement Protocol

During the COVID-19 pandemic, State agencies were challenged to acquire pandemic-related resources, including personal protective equipment and COVID-19 test kits. To expedite procurement when needed resources became available, State procurement officers relied more frequently on emergency procurement methods, which lack the procedural safeguards and the normal review required for traditional competitive procurements. To address concerns related to the limited oversight of emergency procurement, Senate Bill 829/House Bill 1091 (both passed) establish a statutory definition of “emergency” for the purpose of deciding when to use an emergency procurement and further require, under specified circumstances, that emergency procurements be approved in advance by the chief procurement officer (CPO) at the Department of General Services (DGS). Prior approval by CPO is not necessary if delaying an emergency procurement by up to 48 hours would likely result in imminent harm. CPO must approve or disapprove the request within 48 hours; if CPO does not respond within 48 hours, the request is considered to be approved.

The bills also require the Special Secretary of the Governor’s Office of Small, Minority, and Women Business Affairs (GOSBA), in consultation with the Secretary of Transportation and the Attorney General, to establish guidelines for each State agency to consider when determining the appropriate minority business enterprise (MBE) participation goal and outreach for an emergency procurement contract.

Additionally, the measures codify and expand reporting requirements related to emergency procurements. Among the changes, they require that within 15 days after awarding a contract or modification by emergency procurement that exceeds $50,000, an agency must submit to the Board of Public Works (BPW) and the appropriate control agency specified information about the procurement, including the justification for the use of the emergency procurement procedure.

Minority Business Enterprise Program

The State’s MBE program requires that a statewide goal for MBE contract participation be established biennially through the regulatory process under the Administrative Procedure Act. The biennial statewide MBE goal is established by the Special Secretary of GOSBA, in consultation with the Secretary of Transportation and the Attorney General. The current goal is 29% of the total value of contracts awarded, with applicable subgoals for women- and minority-owned businesses.

Senate Bill 689 (passed) expands the duties of the Special Secretary to include (1) establishing a mentoring program in which large and established MBEs mentor start-up and small MBEs; (2) conducting a feasibility study for providing one-on-one assistance to MBEs in submitting competitive and successful bids and proposals for procurement contracts; (3) providing training and educational opportunities for nonminority prime contractors regarding their duties under the State’s MBE program; and (4) establishing an annual awards program to recognize localities that demonstrate the highest excellence in MBE support.

Under current law, a firm that is owned by a woman (or women) who is also a member of a racial or ethnic minority may be certified as both a woman-owned MBE and a minority-owned MBE. However, for the purpose of meeting MBE goals on a specific contract, a dually certified firm may be counted as either a woman-owned firm or a minority-owned firm, but not both. Senate Bill 697 (passed) alters this by allowing a business that is certified as a woman-owned business and as a business owned by a member of an ethnic or racial minority to be counted as a business owned by both (1) a woman (or women) and (2) a member of an ethnic or racial minority.

Senate Bill 909 (passed) requires GOSBA – prior to the release of funds to a recipient of a State capital grant of $3.0 million or more from a miscellaneous grant program, a House of Delegates initiative, or a Senate initiative – to review the project for subcontracting opportunities under the State’s MBE program and, if practicable, establish MBE subgoals for the project. If GOSBA establishes MBE subgoals for a capital project, the recipient must (1) certify to DGS that the recipient expects to achieve the subgoals or (2) request a waiver of all or part of the subgoals from GOSBA. GOSBA must review each request for a waiver and report the revised subgoals to DGS. The bill also establishes oversight and reporting requirements for GOSBA and DGS. The application of MBE subgoals to grant recipients takes effect July 1, 2022.

Small Business Reserve Program and Veteran-owned Small Business Reserve Program

Senate Bill 598/House Bill 790 (Chs. 78 and 79) repeal the statewide goal that at least 1% of the value of procurement contracts be made to veteran-owned small business enterprises (VSBE) and instead require the Special Secretary of GOSBA to adopt a statewide goal by regulation. The Acts also specify that contract goals for VSBEs must be based on both prime contracting and subcontracting opportunities for VSBEs, as determined through an analysis of the scope of work presented in the solicitation documents. The Acts include provisions to align management of the VSBE preference program with existing preference program management structures. They also specify that verification of a business owner’s prior active military service does not have to come only from the Maryland Department of Veteran Affairs.

Finally, the measures establish an Advisory Committee on VSBEs within GOSBA. The committee must (1) review GOSBA’s annual report to LPC on the VSBE program to identify areas for improvement and recommend actions to achieve those improvements and (2) ensure that a continuous oversight and improvement structure exists for the program.

Prevailing Wage

Contractors and subcontractors working on eligible public works projects in Maryland must pay their employees the prevailing wage rate. “Public works” are structures or works, including a bridge, building, ditch, road, alley, waterwork, or sewage disposal plant, that are constructed for public use or benefit or paid for entirely or in part by public money. Any public works contract valued at less than $500,000 is not required to pay prevailing wages. Prevailing wages are wages paid to at least 50% of workers in a given locality who perform the same or similar work on projects that resemble the proposed public works project. The State Commissioner of Labor and Industry is responsible for determining prevailing wages for each public works project and job category based on annual surveys of contractors and subcontractors working on both public works and private construction projects.

Senate Bill 35/House Bill 37 (Chs. 57 and 58) expand the applicability of the State’s prevailing wage law to include (1) a public work project contract with a value of $250,000 or more (instead of $500,000 or more) and (2) a public work project for which State funds constitute at least 25% of the construction

costs (instead of at least 50% of construction costs). The Acts apply only to a public work project contract executed on or after October 1, 2021. Legislative bond initiatives that receive State funds in the capital budget are exempt from the Acts’ requirements. On April 8, 2021, the Governor vetoed the bills, citing concerns about increasing the cost of doing business with the State and the continued economic impact of the COVID-19 pandemic. The General Assembly overrode both vetoes before the end of the 2021 session.

MD Public Information Act

Maryland’s Public Information Act (PIA) establishes that all persons are entitled to have access to information about the affairs of government and the official acts of public officials and employees. Each governmental unit that maintains public records must identify a representative whom a member of the public may contact to request a public record. Public records are any records that are made or received by a covered public agency in connection with the transaction of public business. The scope is broad, and all “records” possessed by an agency generally fall within the definition of “public records.” However, some records are not subject to public inspection due to exceptions provided for in the law. Examples of these protected records include an individual’s medical information, records used for security procedures, and a contractor’s trade secrets.

House Bill 183 (passed) makes various revisions to the PIA, including (1) expanding the duties and jurisdiction of the Public Information Act Compliance Board (PIACB) to include additional types of PIA disputes; (2) modifying provisions pertaining to the filing of written complaints to PIACB and modifies the timelines and procedures for the review and resolution of complaints; (3) expanding the duties of the Office of Public Access Ombudsman; (4) requiring a custodian to adopt a specified proactive disclosure policy; and (5) establishing staffing requirements for the Office of the Attorney General. The bill states that it may not be applied or interpreted to have any effect on or application to any exceptions to disclosure requirements under PIA.

House Bill 23 (passed) modifies the PIA to require an officer, an employee, an agent, or a contractor of the State or a political subdivision to deny inspection of records that contain specified personal information, and deny inspection using facial recognition searches, by any federal agency seeking access for the purpose of enforcing federal immigration law unless provided with a valid warrant. In addition, a person who receives specified personal information under PIA may not disclose the information to a federal agent or federal agency for the purpose of federal immigration enforcement unless presented with a valid warrant.

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