GO ITEM #1
October 8, 2012
Worksession
MEMORANDUM
October 4,2012
TO:
FROM:
SUBJECT:
Government Operations and Fiscal Policy Committee
Amanda Mihill, Legislative
Worksession:
Repeal
Attorne"&lf4tlct:il
Bill 22-12, Local Small Business Reserve Program - Sunset
Bill 22-12, Local Small Business Reserve Program - Sunset Repeal, sponsored by the-Council
President at the request of the County Executive, was introduced on July 24, 2012. A public
hearing was held on September 18 at which a representative from the Executive supported the
bill.
Background
The Local Small Business Reserve Program was established by Bill 23-04, Contracts and
Procurement - Local Small Business Reserve Program, effective January 1, 2006. The
legislative intent of the new program was to enhance the competitiveness of County-based small
businesses by creating a separate defined market in which small businesses will compete against
each other, not against larger firms, for County contracts; broaden the pool of local small
vendors doing business with the County; and encourage the County's economic growth by
enhancing the business climate for local small businesses. Bill 23-04 provided that the program
would sunset on December 31, 2009. The program was extended until December 31, 2012 by
Expedited Bill 3-09, Local Small Business Reserve Program Amendments.
Bill 22-12 would repeal the sunset date of the Local Small Business Reserve Program, making
the program permanent. The Council has received correspondence from several businesses
supporting Bill 22-12 (see ©9-1S); Council staff is unaware of any correspondence opposing the
bilL
In his testimony, David Dise, Director of the Department of General Services stated that after 4
years of implementation and improved management, the program "produced increases in the
number of businesses competing from County contracts, marked increases in competitive
opportunities, and significant increases in the amount of dollars spent by the County on contracts
with local small businesses." Therefore, the Executive recommends repealing the sunset
provision.
Council staff recommendation:
enact Bill 22-12.
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This packet contains:
Bill 22-12
Legislative Request Report
Memo from County Executive
Fiscal Impact Statement
Written correspondence
David Dise, representing County Executive
Banneker Ventures
Greater Silver Spring Chamber of Commerce
Montgomery County Chamber of Commerce
OFFICEPRO, Inc.
SPS Consulting, LLC
Circle
#
1
3
4
5
9
11
12
13
14
15
F:\LAw\BILLS\1222 Local Small Business Reserve Program\GO Memo,Doc
2
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Bill No.
22-12
Small
Business
Concerning: Local
Reserve Program - Sunset Repeal
Revised:
6/29/2012
Draft No. _1_
Introduced:
July 24. 2012
Expires:
February 24,2014
[date]
Enacted:
Executive:.
[date signed]
Effective:
[date takes effect]
Sunset Date:
-!...!N:::.:on~e~
_ _ _ _ __
Ch.
~
.. Laws of Mont. Co.
[year]
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the Request of the County Executive
AN
ACT to:
(1)
(2)
repeal the sunset date ofthe Local Small Business Reserve Program; and
generally amend the Local Small Business Reserve Program.
By amending
2009 Laws of Montgomery County Chapter 9
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment,
Deletedfrom existing law or the bill by amendment,
Existing law unqffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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BILL
No. 22-12
1
2
Sec.
1.
Section 2 of Chapter 9 of the 2009 Laws of Montgomery County is
amended as follows:
Sec. 2.
[This Act and any regulations adopted under
it
expires on December
3
4
31, 2012.] The Office of Legislative Oversight must begin a review of the Program
one year after its implementation begins and must report to the Council about the
effectiveness ofthe Program.
Approved:
5
6
7
8
9
Roger Berliner, President, County Council
Date
10
Approved:
11
Isiah Leggett, County Executive
Date
12·
This is a correct copy ofCouncil action.
13
Linda M. Lauer, Clerk of the Council
Date
®
f:\law\bills\1222 local small business reserve program\biIl1.doc
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LEGISLATIVE REQUEST REPORT
Bill 22-12
Local Small Business Reserve Program
-
Sunset Repeal
DESCRIPTION:
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
J\lIUNICIP ALITIES:
PENALTIES:
Repeal of Local Small Business Reserve Program (LSBRP) sunset
date.
The Program will sunset on December 31,2012, unless the sunset
date is extended or repealed.
To continue the Program.
Department of General Services, Office of the County Attorney
None
TBD
N/A
N/A
Grace Denno, Department of General Services, 240-777-9959
N/A
NI
A
F:\Law\BilIs\1222 Local Small Business Reserve Program\Lrr.Doc
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OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE, MARYLAND 20850
Isiah Leggett
County Executive
MEMORANDUM
July 9,2012
TO:
FROM:
Roger Berliner, President
County Council
Isiah Leggett
County Executive
-<?-::;;-/:jiJZ7
r
r­ -
.
')
~_~L~
___
RE:
Legislation
~-
Local Small Business Reserve Program
I am transmitting for Council introduction a biB that would continue the Local
Small Business Reserve Program (LSBRP) beyond December 31, 2012 by repealing the sunset
date for the program. If you have any questions about this bill, please contact David Dise,
Director, Department of General Services (DGS), 240-777-6091, Grace DelU1o, Office of
Business Relations and Compliance, DGS, 240-777-9959, or Karen
L.
Federman Henry,
Division Chief, Office of the County Attorney, at 240-777-6761.
Attachments (2)
c:
David Dise, Director, Department of General Services
Marc Hansen, County Attorney
Grace Denno, Business Relations/Compliance
Karen
L.
Federman Henry, Division Chief,
Office of the County Attorney
Steve Silverman, Director, Department of Economic Development
montgomerycountymd.gov/311
240-773-3556 TTY
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ROCKVILLE) MARYLAND
MEMORANDUM
September 6, 2012
TO;
Roger Berliner, President. County Council
Jennifer
A.
Hughes, Director, Office
ofManagc~Bl.~et
Joseph F. Beach, Director, Department of Finanl!
,~
....
Bill 22-12 - Local Small Business Reserve Program - Sunset Repeal
Attached please
find
the fiscal
and
economic impact statements for the ahove­
FROM:
SUBJECT:
referenced
legislation.
JAH:nm
c: Kathleen
Boucher, Assistant Chief Administrative Officer
Lisa
Austin, Offices of
the County
Executive
Joy Nurmi, Special Assistant
to the
County Executive
Patrick Lacefield, Director. Public Information Office
Grace DemlO, Department ofGeneral Services
Michael Coveyou, Department of Finance
David Platt, Depaltment ofFinance
Alex
Espinosa, Office ofManagement and Budget
Angela Dizelos, Office ofManagement and Budget
Erika Lopez-Finn, Office of Management and Budget
Naeem Mia,
Office of Management and Budget
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Fiscal Impact Statement
Council Bill 22-12 - Local Small
Business Reserve
Program
~
Sunset Repeal
1. Legislative Summary
The proposed bill repeals the sunset clause
of
the Local Small Business Reserve program.
The program
is
currently scheduled to expire on December
31, 2012.
The proposed
bill will
continue the program indefinitely:
2. An estimate of changes in County revenues and expenditures regardless ofwhether
tbe revenues or expenditures are assumed
in
the recommended or approved.budget.
Includes source of information, assumptions, and methodologies used.
There is no impact on revenues and expenditures.
3. Revenue and expenditure estimates coveting at least the next 6
fIScal
years..
There is no
impact on revenues
and
expenditures.
4. An actuarial analysis through the entire 'amortization period for each bill that would
affect retiree pension or group insurance costs.
Not applicable. This
bill does
not affect retiree pension
or
group insurance
costs. .
5. Later actions that may affect future revenue and expenditures
if
the bill authorize.,
future spending.
The bill does not authorize future spending.
6. An estimate of the staff time needed to implement the bill.
No additional
Staff
time
is
needed
to
implement
the
bill.
7. An explanation of how the addition of new staffresponsibilities.would affect other
duties.
No
new
staff
responsibilities are created as a result
of this
bill.
8.
An
estimate of costs when an additional appropriation is needed.
Not
applicable.
9. A description of any variable that could affect revenue and cost estimates.
Not
applicable.
10. Ranges of revenue or expenditures that are uncertain or difficult to project.
Not applicable.
11.
If
a bill is likely to have no rlScal impact, why that
is
the case.
The bill repeals the sunset clause to continue the program. There will be no change
in
expenditures
or
revenues.
12. Other fiscal impacts or comments.
None.
1
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13. The foliowmg
contributed to
and concurred
with
this
analysis:
Grace Denno, Department of General Services
Naeem Mia, Office ofManagement and Budget
Erika Lopez-Finn, Office ofManagement and Budget
Date'
2
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Economic Impact Statement
Council Bill 22-12
Local Small Business Reserve Program - Sunset Repeal
Background:
This proposed legislation would repeal the sunset date ofthe Local Small Business
Reserve Program. and generally would amend the Local Small Business Reserve
Program.
1. The
sources of
infonnation,
assumptiollS
t
and methodologies
used.
Not
applicable.
2.
A description of any variable that could affect the economic impact estimates.
Not applicable. Bill 22-12 would have no economic impact.
3.
The
Bill's positive or negative effect,
if
any on employment, spending. saving,
investment. incomes, and property values
in
the County.
Not applicable. Bill 22-12 ,would have no economic impact.
4. If
a
Bill
is
1i1(ely
to have no economic impact, why is that the case?
The BilI
merely
repeals the sunset provision ofthe Local Small Business Reserve
Program,
thereby
allowing it to continue.
5.
The following contributed t6 and concurred
with
this analysis: David Platt and Mike
Coveyou, Finance
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)
Bill 22-12, Local Small Business Reserve Program - Sunset Repeal
Testimony of David Dise, Director, Department of General Services
Public Hearing
September 18, 2012
I am David Dise, Director of Montgomery County's Department of General
Services and I am here on behalf of County Executive Isiah Leggett to encourage the
Council's favorable consideration of this bill to repeal the existing sunset provision for
the Local Small Business Reserve Program.
Montgomery County is home to a robust local small business community. Nearly
95% of resident businesses are considered small businesses. Recognizing that all
businesses have experienced the severe impact of a slowed economy, four years ago the
County Executive recommended changes to the Local Small Business Reserve Program
(LSBRP) tohelp maintain the vitality of our local economy. The Council supported
those recommendations and added additional provisions improving the original Program.
After 4 years of implementation and improved management, the Program has
produced increases in the number of businesses competing for County contracts, marked
increases in competitive opportunities, and significant increases in the amount of dollars
spent by the County on contracts with local small businesses. Vv'bile the requirements of
the program are mandatory for all County Government departments, willing adoption by
the departments has proven significant in Program success. Departments are gaining
confidence in the quality of goods and services provided by LSBRP vendors
The number of solicitations reserved and awarded under LSBRP has increased
each year since the program was strengthened through legislative action. In FY09, 14
formal LSBRP solicitations were issued, compared to 62 in FY12. Correspondingly, the
value of contracts awarded each year has increased under LSBRP requirements. In FY10,
23% of eligible contracts, totaling $67.5M, were awarded to local small businesses. This
increased to 38%, or $83.6M, in FY12. These increases are attributed to pro-active
outreach and research by County staff to identify and recruit local businesses.
As a result of this increase in the number and total value of contracts awarded, the
actual amount of money spent, in terms of paid invoices, by the County to local small
businesses has increased from $25 million in FYlO to $72 million in FY12. This is real
money invested back into the local economy, fueling the business community and
resulting in more stability and employment.
A significant change resulting from the LSBRP legislation four years ago was the
addition of the requirement that the DGS Director approve any determination that no
LSBRP vendor was deemed qualified to satisfy a requirement. Enforcement of this
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provision, combined with increased outreach and support from County departments has
resulted in significant reduction in the value oflost contracting opportunities to local
small business from $222M in FY09 to only $18M in FY12.
Finally, the number of businesses registering as qualifying under LSBRP
guidelines has surpassed 1,000. More and more local small businesses are aware of the
program and are showing active interest in the program.
As I stated earlier, Montgomery County has a robust, active and responsive small
business community. These businesses employ local residents, provide good jobs, and
make real contributions to the local economy. It is clear that local small businesses have
benefited from the LSBRP. The program provides fair yet active competition among
businesses to ensure the public benefits from best value for the dollar spent under county
contracts. In additiop, the LSBRP provides an economic opportunity that every local
small business can benefit from now and in the future. This investment back into the
local economy, certainly a help in difficult times, is an ongoing need for every small
business struggling to get a foot-hold in the marketplace, and an equally ongoing benefit
to the County.
.
The LSBRP is widely supported by local vendors, chambers of commerce, and
County residents. When the program was put into place, a sunset date was appropriately
set for every 3 years to provide the opportunity to gauge the program effectiveness and
ongoing need. With 4 years of increasingly successful operation, as evidenced by the
results I have outlined, County Executive Leggett believes the sunset provision imposed
on the Local Small Business Reserve Program should be repealed.
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Testimony of Omar A. Karim, President of Banneker Ventures
Montgomery County Council Committee meeting
Bill 22-12, Local Small Business Reserve Program - Sunset Repeal
October 8, 2012
My name is Omar Karim and I serve as President of Banneker Ventures, a
construction and services firm based out of Rockville. I am here on behalf of our nearly
20 employees to encourage the Council's favorable consideration of Bill 22-12 to repeal
the existing sunset provision for Montgomery County's Local Small Business Reserve
Program.
As a ten year resident of the County and President of a local small business, I
want to let you know that the Local Small Business Reserve Program has helped us
tremendously over the past few years. As a result of the Program, we have been able to
bid on projects which have been designated local and small business reserve and have
won more than $6M in contracts with the County, which have enabled us to hire 10 new
employees.
The projects that we have won under the Program are both meaningful and
rewarding. One of these projects was a competitive LSBRP project, involves the
construction of more than a third of a mile of roads, sidewalk and underground utilities
on Dale Drive in downtown Silver Spring. At more than $4M, the Dale Drive project is
one of the largest road projects ever awarded to a small business by the Montgomery
County Department of Transportation and has allowed us to hire 5 new full time
employees alone.
Over the past few years, when we have spoken with other companies who are
located outside of the County, we point to what Montgomery County has done to help its
small businesses through the implementation of the Local Small Business Reserve
Program. We encourage the Council's favorable consideration of the bill to repeal the
existing sunset provision for the Local Small Business Reserve Program.
Thank you for your time.
Omar
A.
Karim
Banneker Ventures
5 Choke Cherry Road, Suite 378
Rockville, Maryland 20850
(301) 990-4980 phone
(301) 990-4982
fax
(301) 523-1810 cell
okarim@bannekerventures.com
@
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t))]S"'N6
CHAMBER
0' COMMERCE
[«I;r~rR
September 17, 2012
The Honorable Roger Berliner. President
and Members ofthe Montgomery County Council
Montgomery County Council
100 Maryland Avenue
Rockville. MD 20850
Dear Council President Berliner and Members of the Council:
On behalf of the Greater Silver Spring Chamber of Commerce (GSSCC), I am submitting this letter in
lieu of presenting testimony in support ofBil122-12, Local Small Business Reserve Program (LSBRP)
- Sunset Repeal.
The Chamber has long supported efforts to offer more Montgomery County procurement opportunities
to Montgomery County-owned and operated businesses, especially small businesses. Keeping
Montgomery County tax dollars inside the County is good fiscal and public policy, something we
believe is even more important in the current economic times. The Local Small Business Reserve
Program has been a positive step in that direction and it should be continued. Indeed. not only should
the program be continued, County agencies should be directed to find even more opportunities for our
local small businesses to supply the purchasing needs of the County.
GSSCC urges all of you to lend your support to this legislation and vote in support of repealing the
sunset on the Local Small Business Reserve Program.
Thank you for your consideration.
Sincerely,
Jane Redicker
President
@
8601 Georgia Avenue. Suite 203, Silver Spring, Maryland 20910
Phone: 301-565-3777
Fax: 301-565-3377
info@gsscc.org
www.silverspringchamber.com
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The Voice of Montgomery County Business
ORI REIss, CHAIRMAN
CHRISTOPHER CARPENITO, CHAIR·ELECT
TOM McELROY,
IMMEDIATE
P
AST-CHAlR
GEORGETTE "GIG!" GoDWIN, PRESIDENT
&
CEO
Re: Bill 22-12: Local Small Business Reserve Program - Sunset Repeal
Mr. President and Members of the County Council:
The Montgomery County Chamber of Commerce, as the voice of Montgomery County business, supports Bill
22-12: Local Small Business Reserve Program - Sunset Repeal. The Montgomery County Local Small Business
Reserve Program (LSBRP), allows many small businesses in our County to compete for valuable contracts,
which helps their companies grow.
The County's program has been very successful since the program's initial adoption in 2008, the program has
grown and most County departments have diligently achieved their goal of 20% of their procurements being
set aside for small business competition. These individual contracts have ranged from smaller service
agreements to contracts worth millions to small businesses. The County's LSBRP program should function as a
model to other Counties in Maryland who look to support their local small businesses.
In fact, in the last session ofthe Maryland General Assembly, the Chamber advocated for the State to change
the requirements for their Small Business Reserve (SBR) program to look more like Montgomery County's
program. The legislation, which was championed by members of the Montgomery County delegation, is now
public law. It will help the State reach their goal of 10 percent of their procurements reserved for small
businesses. Currently, only 6 percent of the State's contracts are set aside for small businesses.
The Chamber supports Bill 22-12 and encourages the County Council to pass the legislation and maintain this
model for enhancing the local small business economy.
4,
Sincerely,
GigiGodwln
President
&
CEO
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Testimony in favor of Repealing the Montgomery County Local
Small Business Reserve Program Sunset
October 8,2012
Thank you for the opportunity to speak with you today regarding the Montgomery County Local
Small Business Reserve Program.
OFFICEPRO, a technology training company located in Gaithersburg, has been involved in this
program since its inception - actually longer than many of the County staff members
supporting the program at this time. I piloted the initial web site and have worked with the
County on numerous occasions to identify potential local small business that would be able to
respond to County solicitations.
As the chair of the Small Business Committee for the Montgomery County Chamber of
Commerce, I also have actively afforded County employees with opportunities to discuss this
and other programs with Committee members.
I can say with utter certainty that this program has had a positive effect and a successful record.
Clearly the data illustrates that opportunities for small businesses to work with the County have
increased significantly since this program began.
On a personal note, OFFICEPRO recently began conducting software training classes for
Montgomery County. It took 7 years of active engagement to get a contract with the County.
This effort would not have been successful without the local Small Business Reserve Program
and the hard work of the County employees who champion this effort.
As a result of the proven success of this program, I am voicing my full support for repeal of the
sunset provision and making this law permanent in County Code.
I look forward to working with County staff to identify and implement ways to make the Local
Small Business Reserve Program even better moving forward.
Thank you again for your time.
Sincerely,
Judy Stephenson
President
OFFICEPRO, Inc.
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Page 1 of 1
MihillJ
Amanda
From:
Studley, Toby [tstudley@spsconsult.net]
Tuesday, October
02,20126:10 PM
Navarro, Nancy
Sent:
To:
Subject:
LSBRP
Dear Councilmember Navarro,
As a lifelong Montgomery County resident and a local small business owner of
16
years,
I
urge you to repeal the sunset
date on the Local Small Business Reserve Program. (LSBRP)
Prior to the program, my company SPS Consulting, LLC, was constantly defeated in contract bids by large companies,
many of whom had no local connection or interest. Despite my success with prestigious federal contracts, such as the
Department of Homeland Security, Nuclear Regulatory Commission and the Smithsonian Institute, I watched with great
frustration as my home county continually awarded contracts to large national and international firms with little or no
connection.
The LSBRP has been instrumental in the success of SPS. I was finally able to win a contract with Montgomery County and
can provide numerous references that will testify to the outstanding job my company and my employees have done in
fulfilling the needs of this contract. Furthermore, SPS was founded in Montgomery County, and continues to operate
here. Growth by SPS equals growth in our County, with both tax revenue and job expansion. The LSBRP has made that
possible. Please make the program permanent in the County Code so that other local companies will have a fighting
chance to show that the best work done for the county can often be provided by Montgomery County owned and
operated businesses.
Sincerely,
Toby Studley
President
SPS Consulting, LLC
1901
Research Blvd. Suite 320
Rockville, MD 20850
Toby Studley
President
I
SPS Consulting
1901 Research Blvd., Suite 320
I
Rockville, MD 20850
P: 301.652.9112
I
F: 301.652.9114
E: Tstudley@spsconsult.net
www.spsconsult.com
1014/2012