§ 14-302

§14–302. IN EFFECT

// EFFECTIVE UNTIL JULY 1, 2026 PER CHAPTERS 620 AND 621 OF 2025 //

(a) (1) (i) 1. Except for leases of real property, each unit shall structure procurement procedures, consistent with the purposes of this subtitle, to try to achieve an overall percentage goal of the unit’s total dollar value of procurement contracts being made directly or indirectly to certified minority business enterprises.

2. Notwithstanding subsubparagraph 1 of this subparagraph, the following contracts may not be counted as part of a unit’s total dollar value of procurement contracts:

A. a procurement contract awarded in accordance with Subtitle 1 of this title;

B. a procurement contract awarded to a nonprofit entity in accordance with requirements mandated by State or federal law; and

C. a procurement by the Maryland Developmental Disabilities Administration of the Maryland Department of Health for family and individual support services, community residential services, resource coordination services, behavioral support services, vocational and day services, and respite services, as those terms are defined in regulations adopted by the Maryland Department of Health.

(ii) 1. The overall percentage goal shall be established on a biennial basis by the Special Secretary for the Office of Small, Minority, and Women Business Affairs, in consultation with the Secretary of Transportation, the Chief Procurement Officer, and the Attorney General.

2. During any year in which there is a delay in establishing the overall goal, the previous year’s goal will apply.

(iii) 1. In consultation with the Secretary of Transportation, the Chief Procurement Officer, and the Attorney General, the Special Secretary for the Office of Small, Minority, and Women Business Affairs shall establish guidelines on a biennial basis for each unit to consider while determining whether to set subgoals for the minority groups listed in § 14–301(k)(1)(i)1, 2, 3, 4, and 6 of this subtitle.

2. During any year in which there is a delay in establishing the subgoal guidelines, the previous year’s subgoal guidelines will apply.

(iv) 1. The Special Secretary for the Office of Small, Minority, and Women Business Affairs, in consultation with the Secretary of Transportation, the Chief Procurement Officer, and the Attorney General, shall establish goals and subgoal guidelines that, to the maximum extent feasible, approximate the level of minority business enterprise participation that would be expected in the absence of discrimination.

2. In establishing overall goals and subgoal guidelines, the Special Secretary for the Office of Small, Minority, and Women Business Affairs shall provide for public participation by consulting with minority, women’s, and general contractor groups, community organizations, and other officials or organizations that could be expected to have information concerning:

A. the availability of minority– and women–owned businesses;

B. the effects of discrimination on opportunities for minority– and women–owned businesses; and

C. the State’s operation of the Minority Business Enterprise Program.

(v) In establishing overall goals, the factors to be considered shall include:

1. the relative availability of minority– and women–owned businesses to participate in State procurement as demonstrated by the State’s most recent disparity study;

2. past participation of minority business enterprises in State procurement, except for procurement related to leases of real property; and

3. other factors that contribute to constitutional goal setting.

(vi) Notwithstanding § 12–101 of this article, the Special Secretary for the Office of Small, Minority, and Women Business Affairs shall adopt regulations in accordance with Title 10, Subtitle 1 of the State Government Article setting forth the State’s overall goal.

(2) The Special Secretary for the Office of Small, Minority, and Women Business Affairs, in consultation with the Secretary of Transportation, the Chief Procurement Officer, and the Attorney General, shall establish guidelines for each unit to consider when determining the appropriate minority business enterprise participation percentage goal for a procurement contract in accordance with paragraph (3) of this subsection.

(3) Each unit shall:

(i) consider the practical severability of all contracts and, in accordance with § 11–201 of this article, may not bundle contracts;

(ii) implement a program that will enable the unit to evaluate each contract to determine the appropriate minority business enterprise participation goals, if any, for the contract based on:

1. the potential subcontract opportunities available in the prime procurement contract;

2. the availability of certified minority business enterprises to respond competitively to the potential subcontract opportunities;

3. the contract goal guidelines established under paragraph (2) of this subsection;

4. the subgoal guidelines established under paragraph (1)(iii) of this subsection; and

5. other factors that contribute to constitutional goal setting;

(iii) monitor and collect data with respect to prime contractor compliance with contract goals; and

(iv) institute corrective action when prime contractors do not make good–faith efforts to comply with contract goals.

(4) Units may not use quotas or any project goal–setting process that:

(i) solely relies on the State’s overall numerical goal, or any other jurisdiction’s overall numerical goal; or

(ii) fails to incorporate the analysis outlined in paragraph (3)(ii) of this subsection.

(5) (i) A woman who is also a member of an ethnic or racial minority group may be certified in that category in addition to the gender category.

(ii) For purposes of achieving the goals in this subsection, a certified minority business enterprise may participate in a procurement contract and be counted as a woman–owned business, a business owned by a member of an ethnic or racial group, or both, if the business has been certified in both categories.

(6) Each unit shall meet the maximum feasible portion of the State’s overall goal established in accordance with this subsection by using race–neutral measures to facilitate minority business enterprise participation in the procurement process.

(7) If a unit establishes minority business enterprise participation goals for a contract, a contractor, including a contractor that is a certified minority business enterprise, shall:

(i) identify specific work categories appropriate for subcontracting;

(ii) at least 10 days before bid opening, solicit minority business enterprises, through written notice that:

1. describes the categories of work under item (i) of this paragraph; and

2. provides information regarding the type of work being solicited and specific instructions on how to submit a bid;

(iii) attempt to make personal contact with the firms in item (ii) of this paragraph;

(iv) offer to provide reasonable assistance to minority business enterprises to fulfill bonding requirements or to obtain a waiver of those requirements;

(v) in order to publicize contracting opportunities to minority business enterprises, attend prebid or preproposal meetings or other meetings scheduled by the unit; and

(vi) upon acceptance of a bid or proposal, provide the unit with a list of minority businesses with whom the contractor negotiated, including price quotes from minority and nonminority firms.

(8) (i) Subject to subparagraph (ii) of this paragraph, a unit may consider modifying the minority business participation goal on a procurement contract:

1. at any time prior to contract execution; or

2. after contract execution, when determined to be in the best interest of the State.

(ii) Before a unit may consider modifying a minority business participation goal under subparagraph (i) of this paragraph, the unit shall:

1. make a determination that there has been a change in the factors established under paragraph (3) of this subsection;

2. use the factors established under paragraph (3) of this subsection to determine the percentage modification to the minority business participation goal; and

3. obtain the agreement of the contractor, including any reasonable pricing considerations.

(9) The Special Secretary for the Office of Small, Minority, and Women Business Affairs shall:

(i) in consultation with the Secretary of Transportation, the Chief Procurement Officer, and the Attorney General, establish procedures governing how the participation of minority business enterprise prime contractors is counted toward contract goals; and

(ii) notwithstanding § 12–101 of this article, adopt regulations setting forth the procedures established in accordance with this paragraph.

(10) (i) 1. If a contractor, including a certified minority business enterprise, does not achieve all or a part of the minority business enterprise participation goals on a contract, the unit shall make a finding of whether the contractor has demonstrated that the contractor took all necessary and reasonable steps to achieve the goals, including compliance with paragraph (7) of this subsection.

2. A waiver of any part of the minority business enterprise goals for a contract shall be granted if a contractor provides a reasonable demonstration of good–faith efforts to achieve the goals.

(ii) If the unit determines that a waiver should be granted in accordance with subparagraph (i) of this paragraph, the unit may not require the contractor to renegotiate any subcontract in order to achieve a different result.

(iii) The head of the unit may waive any of the requirements of this subsection relating to the establishment, use, and waiver of contract goals for a sole source, expedited, or emergency procurement in which the public interest cannot reasonably accommodate use of those requirements.

(iv) 1. Except for waivers granted in accordance with subparagraph (iii) of this paragraph, when a waiver determination is made, the unit shall issue the determination in writing.

2. The head of the unit shall:

A. keep one copy of the waiver determination and the reasons for the determination; and

B. forward one copy of the waiver determination to the Governor’s Office of Small, Minority, and Women Business Affairs.

(v) On or before July 31 of each year, each unit shall submit directly to the Board of Public Works and the Governor’s Office of Small, Minority, and Women Business Affairs an annual report of waivers requested and waivers granted under this paragraph.

(vi) The report required under subparagraph (v) of this paragraph shall contain the following information on those contracts where the unit considered a contractor’s request for waiver of all or a portion of the minority business enterprise goals:

1. the contract titles, numbers, and dates;

2. the number of waiver requests received;

3. the number of waiver requests granted; and

4. any other information specifically requested by the Board.

(11) (i) This paragraph applies to a bidder or offeror after submission of a bid or proposal and before the execution of a contract with an expected degree of minority business enterprise participation.

(ii) 1. If a unit’s procurement officer determines that a deficiency exists in the minority business enterprise participation schedule, the procurement officer shall notify the bidder or offeror of the deficiency and require the bidder or offeror to submit an amended minority business enterprise participation schedule within a reasonable time period.

2. A determination under subsubparagraph 1 of this subparagraph shall be made in consultation with the unit’s minority business enterprise liaison.

3. As directed by the notification made under subsubparagraph 1 of this subparagraph, the bidder or offeror shall submit an amended minority business enterprise participation schedule correcting the deficiency identified.

(12) (i) This paragraph applies after execution of a contract with an expected degree of minority business enterprise participation.

(ii) The minority business enterprise participation schedule, including any amendment, shall be attached to and made a part of the executed contract.

(iii) 1. A. Except as provided in subsubsubparagraph B of this subsubparagraph, for purposes of this subparagraph, good cause for removal of a certified minority business enterprise after contract execution includes documented nonperformance by the minority business enterprise or election by the certified minority business enterprise to cease work on the contract.

B. Failure of a certified minority business enterprise to provide a bond requested by a contractor in violation of § 13–227 of this article may not be considered nonperformance by the minority business enterprise.

2. A contractor may not terminate or otherwise cancel the contract of a certified minority business enterprise subcontractor listed in the minority business enterprise participation schedule without showing good cause and obtaining the prior written consent of the minority business enterprise liaison and approval of the head of the unit.

3. The unit shall send a copy of the written consent obtained under subsubparagraph 2 of this subparagraph to the Governor’s Office of Small, Minority, and Women Business Affairs.

(iv) A minority business enterprise participation schedule may be amended to modify minority business enterprise participation after the date of contract execution only if:

1. it is in the best interest of the State;

2. it is approved by the head of the unit; and

3. the contract is amended.

(13) If, during the performance of a contract, a certified minority business enterprise contractor or subcontractor becomes ineligible to participate in the Minority Business Enterprise Program because one or more of its owners has a personal net worth that exceeds the amount specified in § 14–301(k)(3) of this subtitle:

(i) that ineligibility alone may not cause the termination of the certified minority business enterprise’s contractual relationship for the remainder of the term of the contract; and

(ii) the certified minority business enterprise’s participation under the contract shall continue to be counted toward the program and contract goals.

(14) (i) Except as provided in subparagraph (ii) of this paragraph, a nonprofit entity participating as a minority business enterprise on a procurement contract awarded by a unit before July 1, 2015, may continue to participate in the contract until the contract expires or otherwise terminates, including all options, renewals, and other extensions.

(ii) 1. The nonprofit entity’s participation may not be counted toward achieving the minority business enterprise participation goals in this subsection.

2. The unit may not require that a certified minority business enterprise be substituted for the nonprofit entity in order to meet the minority business enterprise goals for the procurement contract.

(15) (i) For purposes of this paragraph and paragraph (16) of this subsection, “regular dealer”:

1. means a firm that owns, operates, or maintains a store, a warehouse, or any other establishment in which the materials, supplies, articles, or equipment are of the general character described by the specifications required under the contract and are bought, kept in stock, or regularly sold or leased to the public in the usual course of business; and

2. does not include a packager, a broker, a manufacturer’s representative, or any other person that arranges or expedites transactions.

(ii) A unit may apply only 60% of the costs of the materials and supplies provided by the certified minority business enterprise if the certified minority business enterprise is a regular dealer for purposes of achieving the minority business enterprise contract goal.

(16) With respect to materials or supplies purchased from a certified minority business enterprise that is neither a manufacturer nor a regular dealer:

(i) a unit may apply the entire amount of fees or commissions charged for assistance in the procurement of the materials and supplies, fees, or transportation charges for the delivery of materials and supplies required on a procurement toward minority business enterprise contract goals, provided a unit determines the fees to be reasonable and not excessive as compared with fees customarily allowed for similar services; and

(ii) a unit may not apply any portion of the costs of the materials and supplies toward minority business enterprise goals.

(b) (1) The provisions of §§ 14–301(f) and 14–303 of this subtitle and subsection (a) of this section are inapplicable to the extent that any unit determines the provisions to be in conflict with any applicable federal program requirement.

(2) The determination under this subsection shall be included with the report required under § 14–305 of this subtitle.