Prior to the recent General Assembly session, Gov. Wes Moore announced an economic growth legislative agenda including his administration’s proposed Procurement Reform Act of 2025, or PRA.  Passed as House Bill 500, and currently awaiting the Governor’s signature, the PRA attempts to satisfy the Moore-Miller administration’s previously expressed desire to “advance meaningful reforms to the State procurement systems that deliver increased efficiency, competition, and transparency to procurement operations.”

As always, the proof is in the pudding — or at least the PRA’s text, in this case.

Without detailing all provisions in the 56 pages of the PRA that would take effect Oct. 1, changes in a few notable areas should be carefully considered by contractors and vendors seeking to do business with the state of Maryland.

First, the PRA would promote the use of small businesses by doubling the upper threshold of procurements reserved for small businesses under the Small Business Reserve program to an expected value of $1 million. This is consistent with the administration’s small business efforts, including an $87 million increase in SBR contracts year-over-year.

Second, the PRA would revise the master contracting method by increasing the threshold for issuance of a task order solicitation to all master contractors by a factor of five, to one-half million dollars in expected cost.  It further would allow for a rotating solicitation of small groups of master contractors for task orders between $100,000 and $500,000.

Third, it would add a waivable requirement that procuring agencies conduct an oral presentation with offerors if the total expected contract value is more than $10 million for construction, $5 million for IT or professional services, or $2 million for architectural and engineering services.

This requirement promotes a more thorough procurement approach to large competitive sealed proposal procurements weighing technical factors against proposed price and would lead to a more detailed consideration of proposed technical solutions to arrive at the best value to the state.

Fourth, the PRA would make a couple of consequential changes to the state’s Minority Business Enterprise Program.  To begin with, the PRA eliminates the current regulatory directive that a bid or proposal be rejected for any inaccuracy in the MBE Participation Schedule.

The PRA would instruct agencies to require that bidders and offerors correct any deficiencies in the participation schedule “within a reasonable time period.”  This would allow agencies to accept lower-priced bids including faulty MBE packages, which agencies have routinely rejected for years.

The PRA also would authorize agencies to modify contract MBE participation goals at any time, including after contract execution.  This could materially increase costs, subject to contract claims, if the state later determines it “appropriate” to require a larger percentage of the contract to be subcontracted to MBE firms.

And fifth, the PRA would create a new “Good Labor Practices” technical evaluation factor for competitive sealed proposals for public works and living wage services contracts.  To be awarded credit under this factor, however, offerors must commit, by affidavit, to certain provisions concerning labor practices.  These include refraining from cash payments and direct W-2 employment of most workers.

Importantly, offerors should note that committing to the PRA’s “Good Labor Practices” will require them to be jointly and severally liable for any violation by any subcontractor of prevailing wage, living wage, or employee health care requirements, among others.

Additional PRA provisions would create new obligations for state agencies and vendors yet leave the details for future regulatory actions by relevant officials.  For example, a new “Internship and Registered Apprenticeship Program,” leaves the definition of what is a “covered procurement” subject to the Program for future promulgation by the state’s chief procurement officer and secretary of labor.  And the secretary of labor would also “establish criteria … ensuring contractor compliance,” including establishing penalties to be levied upon contractors.

Another area requiring extensive future regulatory action would be “Workforce Diversity Plans” and “Supplier Diversity Plans” now set forth in the new State Fin. & Proc. Section 13-229.  The PRA does not define these plans, which “may be required” from recommended awardees, nor does it set forth how these plans differ from the existing MBE subcontract requirements.

Instead, the PRA tasks the Governor’s Officer of Small, Minority, and Women Business Affairs with adopting regulations for the content of and compliance with this section.

In all, the PRA would enact many new statutory requirements that would lead to future regulatory promulgation by the Board of Public Works and other executive entities.  Assuming the PRA is signed into law by the governor, businesses engaged in state procurement should pay careful attention to this process in the coming year as the PRA’s new provisions are fleshed out.

Michael A. Miller is of counsel at Rifkin Weiner Livingston and is a member of the firm’s state contracting, procurement, and bid protests practice. He can be reached at mmiller@rwllaw.com.