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MarylandHB 05002025 Regular SessionHouseWALLET

Procurement Reform Act of 2025

Sponsored By: Nick Allen (Democratic)

Signed by Governor

State Government - ProcurementAdministrative AgenciesAgriculture, Department ofAnnotated Code of MarylandApprenticesChesapeake Bay RestorationCommittees and CommissionsContractors -see also- Construct; Electricians; etc.Contracts -see also- ProcurementCybersecurityData -see also- Census; DemographicsDiversity, Equity, and InclusionElectronic Commerce -see also- Electronic Funds TransferElectronic GovernmentEnvironment, Department of theEnvironmental Service, MarylandEquipment -see also- Charging; Med. Equip.; MV Equip; etc.General Assembly -see also- AELR Cmte; LegislativePolCmteGeneral Services, Department ofGoods and Services -see also- Retail Sales; TermnSvc; TrfGdsIndustry and TechnologyInformation Technology, Department ofInsurance -see also- Health Ins; MAIF; Motor Vehicle InsIntergovernmental Cooperation -see also- AdmAgn; Cmts; etc.Internet -see also- Internet AccessLabor, Department ofLabor and Industry, Division ofMinority Business EnterprisesNatural Resources, Department ofNoticesPrices -see also- Consumer Price IndexProcurementPublic InformationPublic Officials -see also- Atty Gen; Compt; Coun Admin; etcPublic Works -see also- Brg&Tun; Hwys; PublBlgFac; etc.Records -see also- Land Records; Vital RecordsReportsRevenue and Taxes -see also- (specific tax)Rules and RegulationsSmall BusinessSolicitationStandards and Best PracticesStudies -see also- Commitees & Commissions; ReportsTelecommunications and Information TechnologyTransportation, Department ofTransportation -see also- Aircraft; Airports; Boats; etcVeteransWomen -see also- GenderWork, Labor, and Employment -see also- JobTrn; Leave; etc.

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Bill Overview

Analyzed Economic Effects

18 provisions identified: 5 benefits, 4 costs, 9 mixed.

More reserve contracts for veteran businesses

Beginning October 1, 2025, purchases by Maryland’s veterans and military departments are eligible for veteran-owned small business reserves. This also covers units buying on their behalf. Eligible purchases include goods, services, maintenance, construction, and architectural and engineering work. Purchases under Title 14, Subtitle 1 are excluded. For federally funded purchases, federal law and grant terms still control.

Bid preferences and faster business payments

State bid invitations must include a small business preference when the unit head or designee designates one. The law does not set the preference amount or guarantee an award. Maryland’s payment policy gives contractors payment within 30 days after payment is due and a proper invoice arrives. Small Business Reserve contracts have a shorter, 15-day deadline after both conditions are met. Late payments accrue interest under existing law.

State technology buying gets expert support

Maryland’s technology department must create a procurement team with technology and flexible purchasing expertise. Working with General Services, it develops cost-effective purchasing materials and can help agencies draft requests, review bids, and design contracts. Procurement definitions expressly cover technology services, cybersecurity, hardware, and software, including software as intangible property. General Services can manage technology modernization and cybersecurity upgrade purchases under the State’s technology law.

Transportation agencies gain independent buying authority

Maryland’s transportation department and transportation authority can buy transportation-related supplies and services without approval from other primary procurement units. This includes technology purchases subject to the State’s technology law. The authority excludes supplies funded by State general obligation bonds and excludes insurance. Banking and financial services under the State Treasurer also remain outside this authority.

Minority business paperwork becomes more flexible

Bidders no longer have to list specific certified minority business commitments with bids under the repealed requirement. This applies to solicitations stating an expected minority business participation level. Minority businesses on covered contracts still must acknowledge payments and provide information requested under the Governor’s business office criteria. The law removes the fixed monthly schedule and the limit to reporting payments from the prior 30 days.

Agencies must fund outcome-contract reviews

Beginning July 2025, Maryland Environmental Service must review completed pay-for-success contracts every three years. Reviews cover the preceding three fiscal years and examine project cost, duration, and contract performance. The first review covers contracts completed July 1, 2022, through June 30, 2025. Agencies must reimburse the Service for reviewing their contracts. Copies go to the relevant agencies and specified legislative committees.

Large contract bidders must give presentations

Oral presentations are required for procurements above $2 million for architectural and engineering services. The threshold is $10 million for construction and construction-related services, and $5 million for all other purchases. Other purchases include technology and professional services. The same thresholds apply before Executive Branch units select master contractors for task orders. Officers can waive presentations through a written finding that they are unlikely to help the evaluation.

State purchasing authority gets tighter controls

A statewide contract must be bought by a primary procurement unit for all State units or an eligible listed entity. Primary units can limit or revoke small-purchase authority when another unit fails to follow procurement regulations. Cooperative purchasing agreements need approval from the unit head or Chief Procurement Officer, or their designees, alongside other required approvals. The law also removes express authority to cancel solicitations or reject all bids based on the State’s financial or best interests. That repeal alone does not establish that all cancellation authority ends.

Contract awardees face possible diversity plans

State units can require a workforce diversity plan before awarding a contract over $500,000. They can require a supplier diversity plan before awarding a contract over $250,000. These duties apply to the recommended awardee, not every bidder. The Governor’s Office of Small, Minority, and Women Business Affairs must write implementing rules with the Office of State Procurement.

Environmental contractors get outcome-based payment options

Pay-for-success remains available as a contract type, not a method for choosing vendors. Officers must find expected savings or measurable public benefits, with a substantial share of outcome payments held until results are documented. Agriculture, Environment, Natural Resources, Transportation, General Services, and Maryland Environmental Service can contract with aggregators for environmental projects or certified outcomes. Contracts need approved measurement plans, performance measures, reporting, payment terms, and nondiscrimination, inspection, and termination protections. Other state and local entities can join through cooperative purchasing, but specified Clean Water Commerce Account nitrogen-reduction purchases are excluded.

Contractors face revised bond requirements

Bond rules now use the applicable small-purchase threshold, replacing fixed dollar limits, including a former $100,000 performance-and-payment security threshold. Above the construction threshold, bid security must be at least 5%; officers set the amount for rate-only proposals. Public construction awards above that threshold require payment security of at least 50% and performance security the public body considers adequate. Non-State public bodies can require security above $100,000 through the construction threshold, capped at 50% of the contract. Officers can require security for supplies, services, and construction-related services above their threshold; federal law or aid terms can also require it.

Contractors get clearer task-order bidding rules

For Executive Branch task orders over $500,000, units must solicit all master contractors in the appropriate category. Above $100,000 through $500,000, they must solicit at least six qualified contractors, or all if fewer. At $100,000 or less, they must solicit at least three, or all if fewer; both smaller tiers use rotation. Small Business Reserve task orders are excluded. Specified competitively awarded construction master contracts also have exemptions when they state task-award procedures and a maximum contractor count.

State bidders get revised notice deadlines

Covered bid and award notices use the small-purchase threshold, or a lower threshold set by the Board of Public Works. This replaces the former $50,000 threshold; the applicable small-purchase dollar amount is not stated here. Bid notices must appear on eMaryland Marketplace at least 20 days before opening when work occurs partly in Maryland or Washington, D.C. Award notices are due within 30 days after contract execution and approval.

State buyers gain revised purchasing options

State officers can use master contracting and qualifications-based selection for architectural, engineering, and land surveying work when applicable. The Chief Procurement Officer or designee replaces the budget department in approving classes of purchases for noncompetitive negotiation. Expedited purchasing requires urgency, a public-interest finding, and a need that outweighs competitive sealed bidding or proposals. Officers must seek as much competition as reasonably possible. The law removes the expedited process’s post-award Board report and stated best-value qualification.

Contractors must support apprentices and interns

Contractors on covered State procurements must use approved registered apprenticeship programs. Covered contracts worth at least $1 million also require eligible paid internships meeting the Secretary of Labor’s standards. Before award, bidders must verify participant numbers, work, and program length; failing to honor commitments can trigger penalties. Subcontractors whose covered work exceeds the applicable small-purchase threshold must verify apprenticeship participation or permitted training payments. Penalties go to the State Apprenticeship Training Fund, which can pay costs of carrying out these requirements.

Labor practices count in contractor scores

For covered public-work and wage-law contracts using competitive proposals, good labor practices replace the former percentage preference. The factor counts for 10% of technical points, or is ranked by importance when points are not used. Qualifying businesses must submit an affidavit covering direct W-2 employment with stated exceptions, noncash pay, and compliance with employer laws. They must also meet subcontractor notice, safety consultation, liability, and disclosure requirements; some contracts require a wage payment bond. Businesses found not to follow these practices can lose access to the factor for 12 months.

Minority business goals gain controlled flexibility

State units can change minority business participation goals when relevant factors change and the contractor agrees, including reasonable pricing terms. The unit must use those factors to set the percentage change; changes after signing must serve the State’s best interest. After signing, participation schedule changes also require unit-head approval and a contract amendment. When a bidder’s schedule is deficient, the procurement officer must consult the minority business liaison and notify the bidder. The bidder must submit a corrected schedule within the reasonable time stated in the notice.

Veteran business goals gain controlled flexibility

State units can change veteran-owned small business participation goals only after finding that the listed factors have changed. Those factors must determine the percentage change. The contractor must agree, including to reasonable pricing terms. After signing, participation schedule changes must serve the State’s best interest, receive unit-head approval, and be made through a contract amendment.

Sponsors & Cosponsors

Sponsor

  • Nick Allen

    Democratic • House

Cosponsors

  • Tiffany T. Alston

    Democratic • House

  • Marlon Amprey

    Democratic • House

  • Heather Bagnall

    Democratic • House

  • Harry Bhandari

    Democratic • House

  • Adrian Boafo

    Democratic • House

  • Jon S. Cardin

    Democratic • House

  • Bonnie Cullison

    Democratic • House

  • Dana Jones

    Democratic • House

  • Mark Edelson

    Democratic • House

  • Diana M. Fennell

    Democratic • House

  • Linda Foley

    Democratic • House

  • Pam Lanman Guzzone

    Democratic • House

  • Terri L. Hill

    Democratic • House

  • Kevin B. Hornberger

    Republican • House

  • Jeffrie E. Long

    Democratic • House

  • Jackson

    Affiliation unavailable

  • Anne R. Kaiser

    Democratic • House

  • Kenneth Kerr

    Democratic • House

  • Lesley J. Lopez

    Democratic • House

  • Ashanti Martinez

    Democratic • House

  • Joseline A. Peña-Melnyk

    Democratic • House

  • N. Scott Phillips

    Democratic • House

  • Samuel I. Rosenberg

    Democratic • House

  • Kim Ross

    Democratic • House

  • Malcolm P. Ruff

    Democratic • House

  • Steve Johnson

    Democratic • House

  • Karen Simpson

    Democratic • House

  • Dana Stein

    Democratic • House

  • Deni Taveras

    Democratic • House

  • Kym Taylor

    Democratic • House

  • Karen Toles

    Democratic • House

  • Veronica Turner

    Democratic • House

  • Jennifer White Holland

    Democratic • House

  • Jheanelle K. Wilkins

    Democratic • House

  • Nicole A. Williams

    Democratic • House

  • Greg Wims

    Democratic • House

  • Jamila J. Woods

    Democratic • House

  • Teresa Woorman

    Democratic • House

  • Chao Wu

    Democratic • House

Roll Call Votes

All Roll Calls

Yes: 290 • No: 31

Senate vote • 4/7/2025

Third Reading Passed

Yes: 47 • No: 0

House vote • 4/7/2025

Third Reading Passed

Yes: 118 • No: 19 • Other: 3

House vote • 3/17/2025

Third Reading Passed

Yes: 125 • No: 12 • Other: 2

Actions Timeline

  1. Approved by the Governor - Chapter 601

    5/20/2025

  2. Passed Enrolled

    4/7/2025House

  3. Third Reading Passed (118-19)

    4/7/2025House

  4. House Concurs Senate Amendments

    4/7/2025House

  5. Third Reading Passed (47-0)

    4/7/2025Senate

  6. Second Reading Passed with Amendments

    4/7/2025Senate

  7. Floor Amendment {283623/1 (Senator Hershey) Adopted

    4/7/2025Senate

  8. Floor Amendment {963428/1 (Senator Hester) Adopted

    4/7/2025Senate

  9. Favorable with Amendments {953620/1 Adopted

    4/7/2025Senate

  10. Motion Special Order until Next Session (Senator Hershey) Adopted

    4/3/2025Senate

  11. Favorable with Amendments {953620/1

    4/3/2025Senate

  12. Favorable with Amendments Report by Budget and Taxation

    4/3/2025Senate

  13. Hearing 3/26 at 1:00 p.m.

    3/20/2025Senate

  14. Referred Budget and Taxation

    3/17/2025Senate

  15. Third Reading Passed (125-12)

    3/17/2025House

  16. Second Reading Passed with Amendments

    3/15/2025House

  17. Favorable with Amendments {773329/1 Adopted

    3/15/2025House

  18. Favorable with Amendments Report by Health and Government Operations

    3/15/2025House

  19. Hearing 2/18 at 1:00 p.m.

    1/22/2025House

  20. First Reading Health and Government Operations

    1/22/2025House

Bill Text

  • Enacted

    5/20/2025

    PDF

  • Enrolled

    4/7/2025

    PDF

  • Third Reading

    3/15/2025

    PDF

  • First Reading

    1/22/2025

    PDF

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