Small Business Programs - FAQs
The State of Maryland is committed to the growth and success of small businesses and has developed, through the Maryland Department of General Services (“DGS”), two programs to provide greater access and opportunity for small businesses seeking business with the State:
- Small Business Reserve Program
- Small Business Preference Program
Agency designees shall screen all procurements potentially eligible for a small business reserve and shall determine which of those procurements shall be made with a small business reserve designation. The determination shall be based on the availability of qualified, certified small businesses and other appropriate factors.
A solicitation would first be designated as “Small Business Reserve Only” by the purchasing agency. The solicitation will clearly state that a small business reserve applies and, therefore, only certified small businesses are eligible for award.
Under state procurement law, the SBR Program directs 70 participating agencies/department (increased from 23 on 10/1/17) to spend at least 15% (increased from 10% on 10/1/17) of its fiscal year procurement expenditures with certified small businesses.
In 2004, the State created the Small Business Reserve (SBR) Program. It provides small businesses with the opportunity to participate as prime contractors on State contracts and procurements by establishing a unique marketplace where small businesses compete against other small businesses instead of larger, more established companies.
The Governor’s Office of Minority Affairs reports annually on the progress and performance of the Small Business Reserve program. These reports are posted to the GOMA website and can be viewed by the public. You can find the reports at http://goma.maryland.gov.
The Governor’s Office of Minority Affairs (GOMA) is responsible for program compliance in the areas of training and technical assistance necessary for agencies to implement the program successfully; monitoring agencies' procurement activities to ensure that the program is utilized to the fullest extent possible; and confirming that all SBR reporting requirements are met. GOMA also acts as an advocate for SBR firms.
Yes. The State of Maryland requires procurement agencies to structure their procurement process so that at least 15% of their total procurement dollars for goods, supplies, services, maintenance, construction, construction-related services, and architectural and engineering services are spent with qualified small businesses.
The Small Business Preference Program allows certified small businesses to enjoy a price preference over non-certified small businesses competing for the same contract award on designated procurements.
The solicitation will state that a small business reserve applies. Vendors can find this indicated in the bid description on eMaryland Marketplace and/or in the bid documents attached to the solicitation. Each solicitation for bids or proposals for a procurement designated for a small business reserve will include the following notice: This is a Small Business Reserve Procurement for which award will be limited to certified small business vendors. Only businesses that meet the statutory requirements set forth in State Finance and Procurement Article, §§14-501—14-505, Annotated Code of Maryland, and that are certified by the Department of General Services Small Business Reserve Program are eligible for award of a contract.
The preference amounts can be set as follows:
- Up to 5% where the certified small business is not veteran-owned;
- Up to 7% where the business is a certified veteran-owned small business; or
- Up to 8% where the business is a certified service-disabled veteran-owned small business.
An agency will designate a procurement as “Small Business Preference” and set the preference amount. During bid evaluation, a certified small business may be deemed “low bidder” even if another bidder, who is not a certified small business, bids a lower price. If a non-certified business is low bidder, a certified small business would still be awarded the contract if their bid did not exceed the low bid by more than the set preference amount.
Agency designees screen all procurements potentially eligible for a small business preference and determine which of those procurements will have a percentage preference applied. The determination is based on the availability of qualified, certified small businesses and other appropriate factors.
The solicitation will state that it is designated as a small business preference and will cite the preference percentage.
No, the State of Maryland does not have a set goal or usage requirement for the small business preference program.
The small business preference program applies to procurements by the Department of Transportation, the Department of General Services and Morgan State University. The small business preference program also applies to the Department of Public Safety and Correctional Services for procurements related to the construction of a State correctional facility.
Per the Code of Maryland Regulations (COMAR 21.11.01.04), a small business is a for-profit business, other than a broker, that meets the following criteria:
- It is independently owned and operated;
- It is not a subsidiary of another business;
- It is not dominant in its field of operation; and
- With respect to employees:
- Its wholesale operations did not employ more than 50 persons in its most recently completed 3 fiscal years;
- Its retail operations did not employ more than 25 persons in its most recently completed 3 fiscal years;
- Its manufacturing operations did not employ more than 100 persons in its most recently completed 3 fiscal years;
- Its service operations did not employ more than 100 persons in its most recently completed 3 fiscal years;
- Its construction operations did not employ more than 50 persons in its most recently completed 3 fiscal years; and
- The architectural and engineering services of the business did not employ more than 100 persons in its most recently completed 3 fiscal years; or
- With respect to gross sales:
- The gross sales of its wholesale operations did not exceed an average of $4,000,000 in its most recently completed 3 fiscal years;
- The gross sales of its retail operations did not exceed an average of $3,000,000 in its most recently completed 3 fiscal years;
- The gross sales of its manufacturing operations did not exceed an average of $2,000,000 in its most recently completed 3 fiscal years;
- The gross sales of its service operations did not exceed an average of $10,000,000 in its most recently completed 3 fiscal years;
- 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
- 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 average or averages shall be the average for each year or part of a year during which the business has been operational.
To become certified as an SBR, businesses must complete the self-registration process through eMaryland Marketplace (www.emarylandmarketplace.com).
- If your business has already registered with eMaryland Marketplace, you can sign on to your account and complete the SBR self-registration process.
- If your business is not registered with eMaryland Marketplace, you must begin the business registration before you are able to complete the SBR self-registration process.
Once the SBR self-registration is complete, the business will be immediately notified of the status of their registration. If the business meets the SBR eligibility criteria, the business will be issued a Small Business Qualification Number.
The Small business certification is good for one year from the date of registration. Businesses must re-register each year by the anniversary date of their most recent SBR registration.
If you received notification that your business does not meet the qualification criteria, and you disagree, please contact the eMaryland Marketplace Help Desk at 410-767-1492.
DGS does not require documentation at the time of self-registration; however, prior to award of a contract under the Small Business Preference or Small Business Reserve programs, your business may be subject to an audit. The audit process will consist of a request for business documentation, as well as a site visit to your company office.
A certified small business is a business that meets the established program qualification criteria and completes the self-certification process in eMaryland Marketplace.
Once your business has completed the SBR self-registration process and has obtained the Small Business Qualification number, the business will be placed in the Small Business Directory on eMaryland Marketplace. The Small Business Directory is a public listing of vendors registered with the State of Maryland that meet the small business eligibility criteria and have completed the self-registration process on eMaryland Marketplace. This resource is used by procurement officers to solicit small business procurements directly. Inclusion on the list means that a business has met the standards to be qualified as a small business and, therefore, is eligible to bid on contracts designated for small business preference or reserve.
No. The small business standards under the Federal 8(a) are significantly different from the State standards, so it is possible many 8(a) firms may not qualify as small businesses in Maryland. All prospective small businesses, even those certified under another federal, county or city program, must complete the SBR self-registration process through eMaryland Marketplace if they want to participate in the Maryland Small Business Reserve and Preference Programs.
The small business programs are race and gender neutral, whereas and the MBE program uses race and/or gender as qualifiers. Also, with the small business reserve and preference programs, small businesses are prime contractors, are paid directly, manage the entire contract and report directly to the state representative managing the contract (procurement officer, contract manager, etc.). Usually with the MBE program, the certified minority business enterprises are sub-contractors, are paid by the prime contractor and report to the prime contractor/vendor. However, a MBE can also be a prime contractor for both regular solicitations and the small business preference program solicitations.