AGENDA ITEM 6B
April 1, 2014
Action
MEMORANDUM
March 28,2014
TO:
FROM:
SUBJECT:
Government Operations and Fiscal Policy Committee
Josh Hamlin, Legislative Attorne
y
#
Action:
Bill 13-14, Contracts and Procurement - Formal Solicitation - Local
Preference
Government Operations and Fiscal Policy Committee recommendation
(3-0):
enact the Bill
with amendments.
Bill 13-14, Contracts and Procurement
Formal Solicitation - Local Preference,
sponsored by Councilmembers Navarro, Berliner, Riemer, Eirich, Floreen, Branson and
Andrews, was introduced on February 4,2014. A public hearing was held on February 25 and a
Government Operations and Fiscal Policy Committee worksession was held on March 6, 2014.
Bill 13-14 would define "County-based bidder or offeror" and would require that a
County-based bidder or offeror be given preference in the event of a tie bid or ranking in
contracts awarded by formal solicitation. County procurement regulations currently provide a
tie-breaking procedure which gives first preference to a bidder or offeror "who has its principal
place of business in Montgomery County." This bill would codify that preference, as well as
require a preference be given to a County-based offeror, in the event of identical price proposals,
when a contract award is made on price alone. This bill would also require that a formal
solicitation include an explanation of the procedure for resolving a tie bid or ranking.
There were no speakers at the February 25 public hearing, and no written public
testimony was received. A memorandum from the County Executive, expressing support for the
bill, was received on February 25 (©8). The fiscal and economic impact statements were
received on March 24,2014, and indicate no fiscal or economic impact (©12)
GO Committee
Worksession
David Dise, DGS Director, Pam Jones, DGS, and Grace Denno, DGS, represented the
Executive Branch. The Committee approved (3-0) amendments that would:
(1) define "County-based bidder or offeror" as "a person that has its principal place
of business in Montgomery County, as further defined by Executive regulation
adopted under Section I1B-8;" and
(2) change the modifier of "price proposal" from "identical" to "equally ranked,"
when applying the tiebreaker to when a contract award is made on price alone.
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The Committee recommended (3-0) enactment of the Bill with these amendments.
Issues
Should the definition of "County-based bidder or offeror" mirror the existing language in the
Procurement Regulation?
Bill 13-14 includes the following definition of "County-based bidder
or offeror:"
County-based bidder or offeror
means a person that:
1)
has operated through an otlice, distribution point, or facility in the County
for at least 6 months immediately prior to submitting a bid in response to a
tonnal solicitation issued by the County; and
(2) owns tangible personal property subject to taxation by the County.
In contrast, Procurement Regulation 11 B.OO.O 1.04 grants first preference in the resolution of a tie
bid or offer to a bidder or offeror "who has its principal place of business in Montgomery
County." "Principal place of business" is not a defined term in the Code or Regulations.
In drafting Bill 13-14, staff sought to provide a specific definition for the bidders and
offerors eligible for the preference. However, the bill's definition could be interpreted to be
broader than may be desirable, and the Committee may wish to amend the bill to mirror the
existing Procurement Regulation. Such an amendment would provide that a "County-based
bidder or offeror means a person that has its principal place of business in Montgomery County,"
and mayor may not expressly define what is meant by "principal place of business."
The meaning of the term "principal place of business" was recently addressed by the U.S.
Supreme Court in
Hertz Corp.
v.
Friend,
130 S. Ct. 1181 (2010).
Hertz
involved a complaint in
state court under California's wage and hour law, and the Supreme Court considered the Hertz
Corporation's state of citizenship for the purpose of deciding whether federal courts possessed
diversity-of-citizenship jurisdiction.
l
In
Hertz,
the Court unanimously endorsed the "nerve
center" approach for determining the state in which a corporation has its principal place of
business. The Court concluded "that the phrase 'principal place of business' refers to the place
where the corporation's high level officers direct, control, and coordinate the corporation's
activities," adding that "the 'nerve center' will typically be found at a corporation's
headquarters." The "nerve center" test could be applied to the County law in the absence of a
specific definition of "principal place of business."
Should the Committee wish to include a definition of "principal place of business," staff
recommends that the definition embody the "nerve center" test, but not be restricted to a
business' headquarters. Such a restrictive definition could exclude certain small businesses
which conduct most or all of their operations in the County, but whose executive and
administrative functions are conducted outside of the County. A draft amendment including
such a definition, and amending Bill 13-14 to mirror the language of Procurement Regulation
Hertz claimed that since its corporate headquarters were located in Park Ridge, New Jersey, it was a New Jersey
citizen, and sought removal ofthe case to federal court. The federal diversity jurisdiction statute provides that "a
corporation shall be deemed to be a citizen of any State and foreign state by which it has been incorporated and of
the State or foreign state where it has its
principal place ofbusiness .
.. "
28 U. S. C.
§
1332(c)(
I)
(emphasis
supplied).
I
2
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11B.00.01.04, is at ©9. Committee recommendation (3-0): Amend the bill to define "County­
based bidder or offeror" as "a person that has its principal place of business in Montgomery
County, as further defined by Executive regulation adopted under Section IIB-8."
Can the County enact a more general preference for County-based businesses?
Numerous
state and local jurisdictions have enacted laws giving preference in government procurement,
beyond that proposed in Bill
13-14,
to "local businesses.,,2 These preferences usually involve
contract award or purchasing preferences, and are often in the form of point preferences (when
proposals are ranked using a points system) or percentage preferences (when awards are made on
the basis of price).
Local preference laws, as they treat local residents differently from nonlocal residents,
are analyzed under a number of federal and state constitutional provisions. Such laws typically
implicate the federal Commerce, Privileges and Immunities, Equal Protection, and Due Process
Clauses, as well as any state constitutional analogues to these provisions.
It
may be possible to
craft a local preference law that does not run afoul of some of the federal constitutional
provisions,3 but Maryland courts have not directly addressed the validity of local preference
laws. Since Maryland courts have generally looked with disfavor on discriminatory locallaws,4
it is uncertain whether such a law would survive a challenge under Article
24
of the Maryland
Declaration of Rights, Maryland's analog to the
14th
amendment.
Any discussion of a broader local preference should also include consideration of the fact
that most states, including Maryland (©1O), Virginia, and Pennsylvania, have enacted retaliatory
laws that penalize bidders from jurisdictions which have local preference laws. A County local
preference law may help a County business obtain work with the County, but may disadvantage
that business in seeking work with Virginia and Pennsylvania, as well as many other states.
Also, federal grant rules generally prohibit the use of local preferences on federally funded
projects,
5
which may also limit the applicability of any County preference.
Definitions of "local businesses" differ among the various jurisdictions with local preference laws; indeed the use
of the term "local business" to describe businesses subject to preference is not universal. For the purposes of this
memorandum, the term "local business" means a business entitled to a location-based preference in procurement by
the legislating jurisdiction.
3
The U.S. Court of Appeals for the Fourth Circuit, within which Maryland sits, applied federal Commerce, Equal
Protection, and Due Process Clause analyses in upholding a South Carolina local preference law in
Smith, Setzer and
Sons v. South Carolina Procurement Review Panel,
20 F.3d 1311 (4
th
Cir. 1994), but did not reach the question of
whether the law violated the Privileges and Immunities Clause. The
Smith, Setzer
Court held that the
plaintiff/appellant lacked standing to bring such a challenge.
4
See Verzi v. Baltimore County,
333 Md. 411 (1994) (holding that Baltimore County's "location requirement" for
towing operators, i.e., a requirement that a licensed tow operator have a place of business within the County before
that operator may be called by police to tow vehicles, violated Article 24 of the Maryland Declaration of Rights).
5
The "Grants Management Common Rule" generally applicable to federal grants, provides that "grantees and
subgrantees will conduct procurements in a manner that prohibits the use of statutorily or administratively imposed
in-State or local geographical preferences in the evaluation of bids or proposals, except in those cases where
applicable Federal statutes expressly mandate or encourage geographic preference. Nothing in this section preempts
State licensing laws. When contracting for architectural and engineering
(AlE)
services, geographic location may be
a selection criteria provided its application leaves an appropriate number of qualified firms, given the nature and size
ofthe project, to compete for the contract."
2
3
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This packet contains:
Bill 13-14
Legislative Request Report
Procurement Regulation IIB.OO.Ol.04 (excerpts)
County Executive Memo
Staff Amendment
Md. State Finance and Procurement Code,
§
14-401
Fiscal and Economic Impact Statement
Circle
#
1
5
6
8
9
10
12
F:\LAw\BILLS\1413 Contracts And Procurement - Formal Solicitation\Action Memo.Doc
4
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Bill No.
13-14
Concerning: Contracts and Procurement
-
Formal Solicitation -
Local
Preference
Draft NO.4
Revised: March 6, 2014
Introduced:
February 4, 2014
Expires:
August 4,2015
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date:
---'-'.N~on~e::.._.
_ _ _ _ __
ChI _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmembers Navarro, Berliner, Riemer, EIrich, Floreen, Branson and Andrews
AN
ACT to:
(1)
(2)
(3)
establish a preference for a County-based bidder in certain contracts awarded by
formal solicitation;
define a County-based bidder or offeror; and
generally amend the law governing the award of contracts by formal solicitation.
By amending
Montgomery County Code
Chapter
11
B, Contracts and Procurement
Sections
llB~l,
llB-9, and llB-lO
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.
Deleted from existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act;
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Bill No. 13-14
1
Sec. lIB-I. Definitions.
Unless the context indicates otherwise, the following tenus have the following
meanmgs:
[(a)]
[(b)]
[(c)]
[(d)]
[(e)]
[(f)]
[(g)]
2
3
4
5
6
7
8
9
10
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
~
11
12
County-based bidder or offeror
means
person that has its principal
place of business in Montgomery County, as further defined by
Executive regulation adopted under Section 11 B-8
[[~
13
14
15
ill
has operated through an office, distribution point, or facility in
the County for at least
.Q
months immediately prior to
submitting
~
16
bid in response to
~
formal solicitation issued
Qy
17
18
the County; and
ill
[(h)]
[(i)]
[(j)]
[(k)]
owns tangible personal property subject to taxation
Qy
the
County]].!
19
20
21
22
23
24
[(1)]
[(m)]
[(n)]
[(0)]
25
26
27
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
@f:\laW\billS\1413 contracts and procurement· formal solicitation\bill4.doc
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BILL
No.
13-14
28
[(P)]
29
30
31
32
33
34
35
36
37
38
[(q)]
[(r)]
[(s)]
let)]
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
Tie bid
means
f!
low bid submitted
Qy
f!
responsible and responsive
bidder that is identical in price to
f!
bid from another responsible and
responsive bidder under
f!
formal solicitation.
leu)]
*
*
*
Sec.
llB-9.
Formal solicitation - competitive sealed bidding.
(a)
Conditions for use.
Contracts must be awarded' by competitive sealed
bidding except as otherwise authorized in this Chapter or regulations.
Competitive sealed bidding is initiated by issuing an invitation for bids.
39
40
41
(b)
Invitation for bids.
An
invitation for bids must include specifications,
evaluation criteria including the procedure for resolving tie bids, and all
contractual provisions applicable to the procurement.
42
43
44
45
46
47
48
49
*
ill
*
*
Tie Bids.
If the Director makes an award, the Director must award
f!
contract to the County-based bidder when there is
f!
tie bid between
f!
County-based bidder and
f!
non County-based bidder.
llB-lO.
Formal solicitation - competitive sealed proposals.
*
(d)
(1)
*
*
50
51
52
53
54
Evaluation and method ofaward.
A request for proposals must contain evaluation factors and an
explanation of how the rank of an offeror will be determined!!
including the procedure for resolving ties in ranking. Evaluation
factors must include factors related to the technical quality of the
(Vt.\laW\billS\1413 contracts and procurement - formal solicitation\biIl4.doc
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BILL No. 13-14
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
proposal or the ability of the offeror, or both. Evaluation factors
may include price. The evaluation process may involve one or
more steps.
(2)
If the Director determines that a sufficiently detailed scope of
services has been developed to allow for selection of a contractor
on the basis of price, the evaluation process may provide for the
selection of a proposed contractor by requiring all offerors who
meet pre-established levels of competency as reflected in scores
awarded by the qualification and selection committee to compete
for the contract award on the basis of price alone.
Price
submissions must be submitted in a sealed offer. If required in
the Request for Proposal, the price proposal must be binding on
the offeror. The price proposal may be submitted at any point
during the evaluation process as stated in the Request for
Proposals. If the Director decides to award
alone, the Director must award
offeror when
~
~
~
contract on price
contract to the County-based
~
qualified County-based offeror and
qualified
non County-based offeror have submitted [[identical]] equally
ranked price proposals.
*
(f)
*
*
Approval of contract awards.
The Director must approve the proposed
ranking of offerors. If
~
County-based offeror and
~
non County-based
offeror each receive an identical ranking score, the Director must
consider the County-based offeror to be the higher ranked offeror.
*
*
*
C::~}:\laW\billS\1413
contracts and procurement - formal solicitation\bill 4.doc
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LEGISLATIVE REQUEST REPORT
Bill 13-14
Contracts and Procurement
-
Formal Solicitation
DESCRIPTION:
Local Preference
Bill 13-14 would define "County-based bidder or offeror" and would
require that a County-based bidder or offeror be given preference in
the event of a tie bid or ranking in contracts awarded by formal
solicitation. The bill would also require that formal solicitations
include an explanation of the procedure for resolving a tie bid or
ranking.
The County wishes to support County-based businesses that are
seeking to do business with the County.
To establish a preference for a County-based bidder in the event of a
tie bid or ranking in certain contracts awarded by formal solicitation.
Office of Procurement
To be requested.
To be requested.
To be requested.
To be researched.
Josh Hamlin, 240-777-7892
Not applicable
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIEN CE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENAL TIES:
Not applicable.
F:\LAW\BILLS\1413 Contracts And Procurement - Formal Solicitation\LEGISLATIVE REQUEST REPORT. Doc
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11B.00.01.04 Source Selection Methods and Contract Types
4.1
Description of Source Selection Methods
4.1.1
Formal Solicitations - Invitation for Bid (IFB)
4.1.1.1 General
An IFB is a formal solicitation by which competitive sealed bids are invited
through a public notice procedure which results in an award to the lowest responsible, responsive offeror.
*
4.1.1.4 Procedure
(a)
Director.
*
*
*
IFBs are issued and public notice given under the direction of the
(b)
Responses to the IFB are received by the Director, as specified in the
solicitation, time-stamped, and publicly opened.
(c)
Bids are tabulated and forwarded to the Using Department for evaluation
when deemed appropriate by the Director or when specifically requested by the Using Department Head.
(d)
The Director may require the Using Department or other person to
evaluate the bids in accordance with the method of award criteria, and for responsiveness and
responsibility, and forward recommendations to the Director. These recommendations must include an
evaluation regarding the reasonableness of the proposed award prices. If retained by the Director, the
Director evaluates the bids in accordance with the method of award criteria, and for responsiveness and
responsibility.
In
the case of tie bids, the Director resolves a tie by application ofthe
(e)
following criteria in the order stated:
(1)
Making a proposed award of the contract to the bidder who has
its principal place of business in Montgomery County;
(2)
Making a proposed award of the contract to the bidder who is a
certified MFD business prior to submitting a bid;
(3)
invited to be present.
Drawing of lots with representatives of the firms involved
*
*
*
*
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4.1.2
Formal Solicitation - Best Value Procurement - Request for Proposals (RFP)
4.1.2.1 General
An RFP is a formal solicitation for competitive sealed proposals. Proposals are
not publicly opened. An RFP is a procurement process in which quality and price are balanced to obtain
the best value for the County. Final costs and scope of work are subject to negotiation after the proposals
are received and before the contract is awarded unless otherwise stated in the RFP.
*
4.1.2.4 Procedure
(a)
Director.
*
*
*
RFPs are issued and public notice given under the direction ofthe
(b)
Without public opening, the Director forwards timely received proposals
to the Using Department for evaluation.
(c)
The Using Department establishes the QSC members, with the written
approval of the Director. Each member of the QSC must be an employee of a public entity, unless specific
authorization is obtained from the CAO for another to serve on the QSC. Unless otherwise provided in
these regulations, the committee must be composed of an odd number of members and must have at least
three members.
(d)
The Director may add members to the QSC when appropriate to enhance
the ability of the QSC to fairly and objectively evaluate the proposals. When the Director adds members
to the QSC, the composition of the QSC does not need to remain an odd number.
(e)
The QSC evaluates all proposals received from the Director, in
accordance with the evaluation criteria, and reviews offerors for responsibility.
*
(f)
*
*
*
In the case of a tie in the numerical QSC scored, the Director resolves the
tie by application ofthe following criteria in the order stated:
(1)
the offeror who has its principal place of business in
Montgomery County;
(2)
proposal;
(3)
invited to be present.
Drawing oflots with representatives of the firms involved
the offeror who is a certified MFD business prior to submitting a
*
*
*
*
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JH
CL
OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE, MARYLAND 20850
513F
LL
Isiah Leggett
County Executive
MEMORANDUM
February 20,2014
~
;)
~?.:.)
~-l.:
:Ei
;7):;:xJ
-t
.....,
:'1""1
,:;;:)
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",0("11
~~O
::::0­
:f"I"\fTl
Vl
~
,.:.: nf'l"l
,-«
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00
TO:
FROM:
SUBJECT:
Craig Rice, Council President
{siah Leggett, County Executive
Bill 13-14, Contract and Procurement - Formal Solicitations
Local Preference Bill
~
-I
CB
. c:
.c:
-<
I am writing in support of Bill 13-14, Contract and Procurement - Formal
Solicitations Local Preference Bill (Bill) introduced on February 4,2014 by Councilmembers
Navarro, Berliner and Riemer. The Councilmembers' initiative and the Council's efforts support
my longstanding recognition of Montgomery County's strong and diverse local business
community. This legislative action will help further strengthen the local economy by seeding
back to local businesses apportion of the tax revenues they pay to the County.
You may be interested to know that in the previous fiscal year 28%, or
$233,701,295, of contracts awarded by Montgomery County were with local businesses serving
as the prime contractor or subcontractor. Further, the current Procurement Regulations already
provide opportunities for County-based businesses to receive contract awards in the event of tie
bids.
As currently drafted, this legislation may require further defining oftenns as well
as review by the County Attorney. However, I applaud Councilmembers' vision and recognition
of the need for supporting local business community and strengthening the local economy. I am
committed to working with the Council during the coming weeks on the best way to achieve this.
montgomerycountymd.gov/311
240-773-3556 TTY
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Staff Amendment - definition of County-based bidder or offeror
Amend lines
11
to
23
asfollows:
County-based bidder or offoror
means
~
person that has its principal
place ofbusiness in Montgomery County[[;.
ill
has operated through an office, distribution point, or facility in
the County for at least
Q
months immediately prior to
submitting
!!
bid in response to
the County; and
~
formal solicitation issued
Qy
ill
[(h)]
[(i)]
owns tangible :Qersonal pro:Qeny subject to taxation
Qy
the
County]].:.
£G)]
[(k)]
[(1)]
*
*
*
*
*
(1)
*
*
*
*
*
*
*
*
*
*
Princt{lpll2,lace olbusiness
means:
The headquarters or primary executive or administrative office of
the business; or
(2)
An established office, plant. store or warehouse where the
majority ofthe business' operations and transactions are
conducted and located.
Principal place olbusiness
does not include a post office box, message
center, mail drop. or similar business service or activity with no
substantial work function.
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Page 1
I of I DOCUMENT
Annotated Code ofMaryland
Copyright 2014 by Matthew Bender and Company, Inc., a member of the LexisNexis Group
All rights reserved.
***
Statutes current through the 2013 General Assembly Regular Session
***
***
Annotations through November 20,2013
***
STATE FINANCE AND PROCUREMENT
DIVISION II. GENERAL PROCUREMENT LAW
TITLE 14. PREFERENCES
SUBTITLE 4. MISCELLANEOUS PURCHASING PREFERENCES
GO TO MARYLAND STATUTES ARCHIVE DIRECTORY
Md. STATE FINANCE AND PROCUREMENT Code Ann.
§
14-401 (2013)
§
14-401. Reciprocal preference for resident bi dders
(a) Definitions.
(1) In this section the following words have the meanings indicated.
(2) "Preference" includes:
(i) a percentage preference;
(ii) an employee residency requirement; or
(iii)
any other provision that favors a resident over a nonresident.
(3) "Resident bidder" means a bidder whose principal office is located in the State.
(4) "Resident offeror" means an offeror whose principal office is located in the State.
(5) "Services" means services, architectural services, construction related services, engineering services, or
energy performance contract services, all as defined in
§
11-101 of this article.
(b) Conditions for preference. -- When a unit uses competitive sealed bidding to award a procurement contract, the
unit may give a preference to the resident bidder who submits the lowest responsive bid from a resident bidder if:
(I) the resident bidder is a responsible bidder;
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Page 2
Md. STATE FINANCE AND PROCUREMENT Code Ann.
§
14-401
(2) a responsible bidder whose principal office or operation is in another state submits the lowest responsive bid;
(3) the state in which the nonresident bidder's principal office is located or the state in which the nonresident
bidder has its principal operation through which it would provide supplies or services gives a preference to its residents;
and
(4) a preference does not conflict with a federal law or grant affecting the procurement contract.
(c) Conditions for preference -- Proposals. -- When a unit uses competitive sealed proposals to award a
procurement contract, the unit may give a preference to resident offerors if:
(1) a responsible offeror whose principal office or operation is in another state submits a proposal;
(2) the state in which the nonresident offeror's principal office is located or the state in which the nonresident
offeror has its principal operation through which it would provide the subject of the contract gives a preference to its
residents; and
(3) the preference does not conflict with a federal law or grant affecting the procurement contract.
(d) Copy of statute, resolution, etc.; form of preference. -­
(I) At the request of the unit, a nonresident bidder or nonresident offeror submitting a proposal for a State project
shall provide a copy of the current statute, resolution, policy, procedure, or executive order that pertains to the treatment
of nonresident bidders or nonresident offerors by:
(i) the state in which the nonresident bidder's or nonresident offeror's principal office is located; and
(ii)
the state in which the nonresident bidder or nonresident offeror has its principal operation through which it
would provide supplies or services.
(2) A unit may give a preference under this section that is identical to any of the following preferences, or any
combination of them:
(i) the preference that the state in which the nonresident bidder's or nonresident offeror's principal office is
located gives to its residents; or
(ii) the preference that the state in which the nonresident bidder or nonresident offeror has its principal
operation through which
it
would provide supplies or services gives to its residents.
HISTORY:
SF § 11-145; 1988, ch. 48, § 2; 1992, ch. 99; 1999, ch. 501; 2004, ch. 197; 20lO, ch. 72.
NOTES:
EFFECT OF AMENDMENTS. --Chapter 72, Acts 2010, enacted April 13,2010, and effective from date of
enactment, added "gives to its residents" in (d)(2)(ii).
LexisNexis
50 State
Surveys,
Legislation
&
Regulations
In-State Procurement Preferences
&
Offshoring Constraints
IJNIVERSITY OF BALTIMORE LAW REVIEW. --For article, "Fair Treatment for Contractors Doing Business with
the State of Maryland," see 15
U. Bait.
L.
Rev.
215 (1986).
For article, "Principles of Maryland Procurement Law," see 29
U. Bait.
L.
Rev.
1
(2001).
@
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MARYLAND
MEMORANDUM
March 18,2014
TO:
FROM:
Rice, President, County Council
Jennirer
A. Hughes.
Director,
01l'ice of Mana
Joseph F. Beach, Director, Department of "
en! and
Bt/dgD '
\~
SUBJECT:
FEIS for Council BJ1l
J
3-
J
4, Contracts and Procurement-formal Solicitation-Local
Preference
&
Bill 14-14, Contracts and
Procurement-Wage
Requirements-Health Insurance
Amendments
find attached the fiscal and economic impact statements for the above-referenced
legislation,
.
JAH:fz
cc: Bonnie Kirkland, Assistant Chief Administrative Officer
Lisa Austin, Offices of t.he County Executive
Joy
Nurmi, Special Assistant to the County Executive
Patrick Lacefleld, Diredol', Public Information Otlice
Joseph F. Beach, Director, Department of Finance
Michael Coveyou,
Department of
Finance
David Platt, Department of finance
Robert Hagedoorn, Department of Finance
David Disc, Director, Department of Gcnera! Services
Erika Lopez-Finn, Of1ice of Management and Budget
Mary Beck, Office of
Management and
Budget
Alex Espinosa, Office ofMan,1gement and Budget
Felicia Zhang,
Office
of Management and Budget
Naeem Mia, Office ofManagemcnt and Budget
@
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Fiscallntpact Statement
Council Bill
13-14
&
Contracts and Procurement­
Formal Solicitation - Local Preference
L Legislative Summary.
The legislation establishes a preference for
Ii
COlmty-based bidder in certain c'()ntracts
a\varded from formal solicitation and defmes "county- based bidder or offeror".
2. An estimate of changes in County revenues and expenditures regardless of whether the
revenues
or
expenditures are assumed in the reconunended
or
approved budget. Includes
source of information, assumptions, and methodologies used.
This legislation does not affect revenues and expenditures.
3. Revenue and expenditure estimates covering at least the next 6 fiscal years.
Expenditures and revenue estimates are,not atfected
for the
next 6 fiscal years.
4. An actuarial analysis through the entire amortization period for each bill
111at
would affect
retiree pension or group insurance costs.
'Ibe lcgi.slation docs not affect retiree pension or group insurance costs.
5. Later
actions that may
affect
future revenue and expenditures
if
the biB authorizes future
spending.
The legislation does not authorize future spending.
6. An
estimate of the s1afftime needed to implement the bil1.
When a tie breaking situation happens, a staff from OBRC needs to review the eligibility
of
the bidder according to the definition ofthe "local business". 'Ibis effort is estimated
minimal and current staff resources
will
absorb
it.
There is no additional effort from the Procurement side.
7.
An c)-,:planation of how
the addition of
new
staff responsibilities would affect other duties.
See ans"ver to item 6
8. An estimate of costs when an additional appropriation is needed.
No additional appropriation is needed.
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9. A description
of
any variable
that
could affect revenue and cost estimates.
No other variable affects revenue and cost.
10. Ranges of revenue or expenditures that are uncertain or difficult to project
No revenue or expenditure.
11. If
a
bill
is likely to have no fiscal impact,
why
that is the casco
1bis legislation states that a preference will be given to local businesses v,rhen awarding a
contract This choice does not affect expenditures or revenues.
12. Other fiscal impacts or comments.
None.
13. The foIlO\ving
cOTltributed
to
and concurred
with this analysis:
Grace Denno, Manager, Office of Business Relations
and
Compliance
Pam
Jones, Chief, Office of Procurement
Erika Lopez-Finn, Oftice of Management and Budget
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Economic Impact Statement
Bill 13-14, Contracts and Procurement - Formal Solicitatioll- Local Preference
Background:
This legislation would establish a preference for a
County~based
bidder in certain
contracts awarded
by
formal solicitation, define
a
County-based bidder or ofieror, and
generally amend the law goveming the award of contracts by formal solicitation.
Bill 13-14 (Bill) would
require
that
a
County-based bidder
or ofieror
be
given
preference
in the event of a tie bid or ranking in contracts awarded by formal solicitation. The
current tie-breaker
provision
is in Procurement.
1. The
sources
of
information, assumptious, and methodologies
used.
Oftlce of
Procurement,
Department of General Services
2. A description of any variable that could affect the economic impact estimates.
The
number
of tie-breaking solicitations ba<;ed on
price.
3, The BiU's
positive
or
negative effect,
if
any on employment, spending, saving,
investment, incomes, and property values in the County.
Since the Otrlce of Procurement is already considering local businesses in the cac;e ofa
tie bid or ranking, there is no change and therefore there is no economic impact.
4.
If
a Bill is likely to have no economic impact, why is that the case?
The Bill "vill have no economic
impact
5.
The following contributed
to and
concurred
with this analysis:
David
Platt
and
Rob Hagedoorn,
Finance;
and
Pam
Jones
0
f
the OlIke of
Procurement in the
Department of
General Services.
¥---_.
7-
1~--1r-rjL,
each,
Director
Department of Finance
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