Veteran-Owned Small Business - FAQs
The State of Maryland is committed to improving the operating environment for veteran-owned small businesses and has created two procurement programs aimed at increasing state government procurement opportunities for veteran-owned small businesses:
- Veteran-Owned Small Business Enterprise
- Veteran-Owned Small Business Preference
The Veteran-Owned Small Business Enterprise (VSBE) is a state procurement program created to expand contracting opportunities for veteran-owned small businesses. Under the VSBE program, agencies have a goal to award 1% of the annual dollar value of procurements to certified veteran-owned small businesses. (COMAR 21.11.13).
To achieve the VSBE goal, each agency must assess the potential for VSBE prime contractor and subcontractor participation on each contract. If, after assessing the specific solicitation, the agency determines that subcontractor participation is the appropriate procurement strategy, the agency establishes a VSBE subcontract goal. When a VSBE subcontract goal is placed on a contract, bidders (prime-contractors) are required to utilize a certified veteran-owned small business to meet or exceed the stated goal.
Some factors which may be used to determine the level of VSBE participation include:
- The number of VSBEs listed in the directory or otherwise identified 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.
- The feasibility of subcontracting opportunities in view of the nature and extent of the proposed contract.
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.
This means a certified small business may be awarded the contract 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:
- 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.
All businesses are eligible to respond to the solicitation; however, preference will only be given to certified small businesses.
Upon 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.
Yes. There are certification/verification requirements to participate in both programs.
To participate in the Veteran-Owned Small Business Enterprise (VSBE), your business must be verified by the Center for Veterans Enterprises of the United States Department of Veterans Affairs Office of Small and Disadvantaged Business Utilization.
To participate in the Small Business Preference program, and receive the veteran preference, your business must be certified in the State’s Small Business Reserve through eMaryland Marketplace, and the business must be at least 51% owned and controlled by one or more veterans.
The U.S. Department of Veterans Affairs Office of Small and Disadvantaged Business Utilization (OSDBU) is responsible for conducting verification for veteran-owned businesses. Refer to the OSDBU website for more information.
To become certified in the Small Business Reserve (SBR), businesses must complete the self-certification process through eMaryland Marketplace.
If your business has already registered with eMaryland Marketplace, you can sign on to your account and complete the SBR self-certification process. For instructions, refer to the Small Business Reserve Certification & Renewal.
If your business is not currently registered in eMaryland Marketplace, you must begin the registration process before you can complete the SBR self-certification process. For instructions, refer to the Registering Your Business in eMaryland Marketplace instruction guide.