Minority Business Enterprise Program Adds New Wrinkles


Last fall, Maryland’s renewed Minority Business Enterprise Program was re-enacted with important additions. The updated statute incorporates recommendations and comments that the State received from the Governor’s Office of Minority Affairs (GOMA) and the Maryland Department of Transportation (MDOT).

The renewed program contains the following elements:

  • GOMA along with MDOT and the Office of the Attorney General (OAG) must set an overall program goal and sub goal guidelines every two years through the Code of Maryland Regulations (COMAR);
  • GOMA must consult with MBE program stakeholders in establishing overall goals and sub goal guidelines;
  • It emphasizes the existing prohibition against bundling contracts to hinder MBE participation and adds a quota prohibition;
  • It clarifies the requirement that state agencies monitor and collect data with respect to compliance and take corrective action when prime contractors do not make good faith efforts to comply with MBE contract goals;
  • GOMA, with MDOT and the OAG, are authorized to issue regulations to govern how the work of MBE prime contractors is counted toward contract goals;
  • Prime contractors must provide a satisfactory reason for submitting an ineligible or unavailable MBE subcontractor before they are allowed to amend its MBE Participation Schedule;
  • An MBE Participation Schedule is a required part of the executed contract; and
  • Replacement of a listed MBE firm after execution of the contract is prohibited unless good cause is shown and the replacement is approved by the agency head with the written consent of the MBE liaison.

In addition to the above requirements, the 2012 MBE Program charges the Board of Public Works (BPW) to issue regulations that:

  • Require bidders to complete a document specifying the overall percentage of the contract they agree to accomplish with MBEs;
  • Require the MBE participation documents submitted by the bidder are made a part of the executed contract with the State; and
  • Require every contract that contains MBE participation goals contain a liquidated damages provision in the event the contractor fails to comply in good faith with its MBE participation commitments.

The MBE Program, with these bolstered requirements, runs through July 1, 2016.


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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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