GO Item 2
&
3
July 23,2015
Worksession
MEMORANDUM
TO:
FROM:
Government Operations and Fiscal Policy
commi~
Robert H. Drummer, Senior Legislative Attorney
1~'1
SUBJECT:
Worksession:
Bill 23-15, Contracts - Local Small Business Reserve Program -
Amendments
Executive Regulation 6-15, Local Small Business Reserve Program
Bill 23-15, Contracts - Local Small Business Reserve Program - Amendments, sponsored
by Lead Sponsor Council President at the request ofthe County Executive, was introduced on May
21. A public hearing was held on June 16.
The Bill would:
(1) modify the types ofcontracts subject to the Local Small Business Reserve Program;
(2) amend the definition of a local small business under the Local Small Business
Reserve Program; and
(3) change the reporting dates.
Background
The Local Small Business Reserve Program (LSBRP) was established by Bill 23-04,
Contracts and Procurement - Local Small Business Reserve Program, effective January 1, 2006.
The legislative intent of the program was to enhance the competitiveness of County-based small
businesses by creating a separate defmed 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 23-15 would require that a local small business have its principal place of business in
the County instead of generating a significant amount of economic activity in the County in order
to participate in the program. This change would codify existing regulations defining "generating
a significant amount of economic activity in the County." The Bill would also codify existing
practice by eliminating a contract awarded through an emergency procurement, a bridge contract,
or a cooperative procurement from the types of contracts eligible for the LSBRP. Finally, the Bill
would change the annual reporting date from September 30 to October 30.
Public Hearing
The lone speaker, Cherri Branson, Director of Procurement, representing the Executive,
supported the Bill. See ©11-12.
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Discussionllssues
1. Does requiring a local business to bave its principal place of business in the County change
existing practice?
The Bill would change the definition of a local business from a business that "generates a
significant amount of economic activity in the County" to a business that "has its principal place
ofbusiness in the County. The current Procurement Regulation, COMCOR
§
11B.65.0 1.02 defines
a business that generates a significant amount of economic activity in the County as:
(m)
SignijicantAmount ofEconomic Activity in the County
-A
regular course
of business commerce in the County by a business, along with any of the
following:
(i)
The business has its
-physical
business location(s) only in the
County; or
(Ii)
The business has physical business locations both in and outside of
the County, and the County-based location(s) accountfor over 50%
of the business's total number of employees, or over 50% of the
business's gross sales.
A definition of "principal place of business" was recently added to the procurement regulations
by ER 2-15. Under the new definition, a business has its principal place of business in the County
if:
(1)
(2)
The business has its physical business location(s) only in the County; or
The business has physical business locations both in and outside ofthe County, and
the County-based location(s) account for over 50% of the business's total number
of employees, or over 50% ofthe business's gross sales.
Therefore, this change in law does not change how the current law has been implemented
by
regulation.
2. Does removing bridge contracts and cooperating agreements from the LSBRP change
current practice?
The Director may enter into a bridge contract with a vendor when the vendor has an existing
contract with another public entity for the same goods or services that was obtained through
competition. A cooperative agreement involves combining the requirements oftwo or more public
entities to obtain the benefits of volume purchases, reduction in administrative expenses, or some
other public purpose. Neither of these types of contracts would be appropriate for inclusion in the
LSBRP, and according to Procurement, they have not been. Therefore, this change in law codifies
existing practice as implemented by regulation.
3. Should the Bill be enacted?
The remaining change made by the Bill would extend the time for each Department to send
the annual report on the LSBRP to the Director ofProcurement from September 30 to October 30.
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It
does not change the November 30 date for the annual report from the Director of Procurement
to the Council.
Council staff recommendation:
approve the Bill as introduced.
Executive Regulation 6-15, Local Small Business Reserve Program
ER 6-15 would make a substantive change in the LSBRP by increasing the size criteria for
service vendors from a business with 50 or fewer employees to 100 or fewer employees or a
business with average gross, sales of $5 million or less in the most recently completed 3 years to
$10 million or less. Procurement reports that this change would make an additional 806 County
businesses eligible for the program. Of those 806 County businesses, 61
%
are in the retail trade
or provide professional, scientific, technical, education, arts, entertainment, and recreation
services. The Department of Finance estimated that the Bill would have a positive impact on
employment, personal income, and business revenues for those companies that are now eligible to
compete for contracts in the program. However, Finance could not estimate the impact. See the
Economic Impact Statement for the Bill at ©9-10. Of course, the increased competition for
contracts under the program could also have a negative impact on smaller businesses who will
have to compete with the newly eligible businesses.
This change in the criteria for a small business in the LSBRP is consistent with the current
criteria for a small business under the Maryland Small Business Reserve Program. See COMAR
§
21.11.01.06.
Council
staff recommendation: approve ER 6-15.
This packet contains:
Bill 23-15
Legislative Request Report
Memo from County Executive
Fiscal and Economic Impact statement
Testimony of Cherri Branson
Memo from Executive on Executive Regulation 6-15
Fiscal Impact Statement for ER 6-15
ER 6-15
ER 6-15, Clean Copy
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Bill No.
23-15
Concerning: Contracts -- local Small
Business
Reserve
Program
Amendments
Revised: May 19. 2015 Draft No.l
Introduced:
May 21.2015
Expires:
November 21. 2016
Enacted: _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ __
Sunset Date: -'N:.:.:o::!.n!>!e_ _ _ _ __
Ch. _ _• laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead
Sponsor: COWlcil President at the request ofthe COWlty Executive
AN
ACT to:
(1)
(2)
(3)
(4)
to modify the types of contracts subject to the Local Small Business Reserve
Program;
amend the defmition of a local small business Wlder the Local Small Business
Reserve Program;
change the reporting dates; and
generally amend the law regarding the Local Small Business Reserve Program.
By amending
MontgomeryCoWlty Code
Chapter lIB, Contracts and Procurement
Sections 11B-65, 11B-66, 11B-67, and 11B-69
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface bracketsD
* * *
Heading or defined term.
Addedto 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. 23-15
1
Sec. 1. Sections IIB-65, IIB-66, IIB-67,and IIB-69 are amended as
follows:
Article
xv.
Local Small Business Reserve Program
IIB-65. Definitions.
In
this Article the following words have the meanings indicated.
2
3
4
5
6
7
(a)
Local Small Business
means a for-profit business, other than a broker,
that:
(1) [generates a significant amount of economic activity] has its
principal place of business in the County;
(2) is independently owned and operated;
(3) is not a subsidiary ofanother business; and
(4) meets criteria, size limits, and gross sales amounts established by
method 2 regulations.
8
9
10
11
12
13
14
*
*
(c)
include:
*
*
*
*
15
16
IIB-66. Local Small Business Reserve Program.
17
18
19
The total dollar value of procurements by a using department does not
*
(5)
*
*
20
21
22
23
24
(4) a public entity [or emergency] procurement;
an emergency procurement;
g bridge contract;
g cooperative procurement;
any waiver made under Section 11B-67(f);
@
ill
tID
[(6)]
25
m
any procurement where no local small business is qualified
26
or able to perform the contract; or
®
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BILL No. 23-15
27
28
[(7)]
QQ)
any single procurement that is estimated to exceed $10
million.
29
30
31
*
IlB-67. Procedures.
*
*
*
*
*
(e)
32
33
34
35
36
37
38
39
40
A local small business is no longer eligible for a procurement under this
Article if the business has been awarded $10 million in the aggregate in
County contracts and at least 10 separate contracts, as either a prime
contractor or a subcontractor, [since] beginning January 1, 2006. The
Director must provide written notice to the business when it is no longer
eligible.
*
IlB-69. Reports.
(a)
*
*
By [September] October 30 each year, each using department must
submit to the Director a report on the number, type, and dollar amount
of contracts issued under this Article.
41
42
43
44
45
(b)
By November 30 each year, the Director must report to the Council on
the Local Small Business Reserve Program. This report must include
the number, type, and dollar amount of contracts awarded under this
Article during the preceding fiscal year, the number, type, and dollar
amount of each waiver, information about how these numbers have
changed from the preceding fiscal year, and the extent of outreach
efforts.
46
47
48
49
50
G)
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LEGISLATIVE REQUEST REPORT
Contracts
DESCRIPTION:
Bill 23-15
Local Small Business Reserve Program
-
Amendments
The Bill would:
(1)
modifY the types ofcontracts subject to the Local Small
Business Reserve Program;
(2)
amend the definition ofa local small business under the
Local Small Business Reserve Program; and
(3)
change the reporting dates.
The definition of a local business under the Local Small Business
Reserve Program is difficult to apply and certain types of contracts
should be removed from the Program.
These amendments will update the Local Small Business Reserve
Program to modifY the requirements to be a local business and
minimize confusion from the vendors
CEX, DGS, OCA, DED
To be determined
To be determined
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
N/A
N/A
Grace Denno and Pam Jones, DGS
Karen Federman-Henry and Richard Melnick, OCA
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
N/A
Not changed:
Violations may constitute a material breach of the
contract. Accordingly the County may then exercise any available
remedy, including, terminating the contract for default.
F:\LAw\BlLLS\1523 Local Small Business ReselVe Program\LRR.Docx
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.J
....
::::-.
~
OFFICE OF THE COUNTY EXECUTNE
ROCKVlLLH, MARYLAND 20850
Isiah Leggett
County Executive
MEMORANDUM
April 15, 2015
TO:
George Leventhal, President
Montgomery County Council
Isiah Leggett, County Executi..---­
Local Small Business Reserve Program Legislation amendments
FROM:
SUBJECT:
In accordance with Section 313 of the County Charter and Section lIB ofthe
Montgomery County Code, I am forwarding the attached Local Small Business Reserve Program
Legislation amendments. The purpose of these amendments is to:
(1)
(2)
(3)
(4)
clarify the scope of
the
Local Small Business Reserve Program;
modify the factors for evaluating whether a business meets the criteria
to
participate in the Local Small Business Reserve Program;
change the reporting dates; and
generally amend the law regarding the Local Small Business Reserve Program.
,
i
I recommend prompt passage of this legislation so the local businesses will
benefit from this program.
Attachments
c:
David Dise, Director, Department of General Service
Beryl
L.
Feinberg, Deputy Director, Department of General Services
Bonnie Kirkland, Assistant Chief Administrative Officer
PamJones, Chief, Office of Procurement
Grace Denno, Manager, Office of Business Relations and Compliance
...'r.'.
montgomerycountymd.gov/311
'3
..
240-773-3556 TTY
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ROCKVIU.E, MARYLAND
MEMORANDUM
JlUle
11.2015
TO:
George Leventhal. President, County Council
Jennifer A. Hughes, Director. Office ofMan
Joseph
F. Beach,
Director, Department
of
FROM:
SUBJECT:
dBUdget~
FElS for Bill
23~
15, Contracts - Local Sman Business Reserve Program
~
Amendments
Please find attached the
fiscal
and economk impact statements for the above­
referenced legislation.
JAH:fz
cc: Bonnie Kirkland, Assistant Chief Administrative Officer
Lisa Austin, Offices of
the
County Executive
Joy Nurmi, Special Assistant
to
the County .Executive
Patrick Lacefield, Director, Public Infonnation office
Joseph F. Beach, Director, Department of Finance
Fariba
Kassiri, Acting Director, Office of Procurement
David Platt, Depattment ofFinance
Erika Lopez-Finn, Office ofManagement and Budget
Alex Espinosa, Office of Management and Budget
Naeem Mia, Office of Management
and
Budget
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Impact Statement
Council BiU 23-15, Local Small Bosiness
Reserve Program-
Amendments
1. Legislative Summary.
The
proposed legislation
would
modify
tbe typeS
of contracts
subject
to
the Local
Small
Business Reserve Program; amend the
definition of
a local
small business
to a
business
which,
"has its
principal place
of
business in
the
County";
and
change
reporting dates
from September
30
to October 30.
2.
An
estimate
of
changes
in
County revenues and
expenditures
regardless
of
whether
the
revenues or expenditures are
assumed in
the recommended
or approved budget.
Includes
source of information, assumptions,
and
methodologies used.
.Fi.~cal
There would
be no
changes
in
expenditures or revenues.
3. Revenue
and expenditure
estimates
covering
at least the next 6:fiscal years.
Not applicable.
4.
An
actuarial
analysis
through
the
entire amortization
period
for each bill
that
would
affect
retiree
pension
(}f
group
insurance
costs.
1he proposed legislation
does not
affect retin
'e
pensions
(}f
group insurance.
..
5.
An
estimate
(jf
expenditures related to County's infOJmation technology
including Enterprise Resource Planning (ERP) systems.
The
proposed
legislation does
not
affect IT
systems.
an
systems,
6.
Later actions that
may
affect future
revenue and expenditures
if
the bill
authorizes
future
spending.
The proposed
legislation
does not
authorize
future spending.
7. An estimate
of the
staff
time
needed to
implementilie
bilL
Additional stafrtime is not needed
to
implement the bill.
8.
An
explanation
of how
the
addition of new
staff
responsibilities
would affect
other
duties.
Not applicable.
9. An
estimate
of costs
when
an
additional appmpriation is needed.
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No additional appropriation
is
needed.
10. A description of
any
variable that could affect revenue and cost estimates.
Not applicable.
11. Ranges of revenue or
expenditures
that
are uncertain or difficult to PTQject.
Not applicable.
12. If
a
bill
is likely to have no fiscal impact.
why
that is the case.
The
change in the definition ofa local small business clarifies a small business and the
change in reporting dates allows
the
Office of Procurement more time after the
conclusion of the fiscal to compile and analyze the data for reporting
13. Other fiscal
impacts or comment"),
14. The following contributed to and concurred
with
this analysis:
Erika
Lopez-Finn~
Office ofManagement and Budget
.Pam Jones. OtIice of Procuremellt
Gmce Denno, Office of Procurement
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Economic Impact Statement
Bill 23-15, Contracts - Local Small Business Reserve Program - Amendments
Background~
This legislation would amend the Local Small Busine."ls Reserve Program (LSBRP) to:
• modify
the types of contracts subject to the Local Small Business Reserve
Program,
• amend the definition of a local small business under the Local SmaU Business
Reserve Program, and
• change the reporting dates.
The intent of Bill 23-15
is
to update
the
LSBRP v.ith new
size
requirements and
minimize any confUsion among the vendors. Bill 23-15 increases the threshold ofthe
services category vendor size from 50 to 100 employees and from the current $5 million
annual
revenue to $10 million annual revenue.
Specifically, Bill 23-15 defines a Local Small Business as a for-profit business, othct
than
a broker, that
has
its
principal place ofbusincss
in
Montgomery County. The
legislation deletes
the
language regarding "significant amount of economic activity in
the
County" generated by the Local Small Business. BilI 23-15 also amends Section 11B-66
of the County Code to delete '·or emergency" from the
''''a,
public entity
Qr emergency
procurement" language and adds
that
phrase as a separate line in the Code. The
legislation also adds «a bridge contract" and "'a cooperative procurement" to Section 11 B­
66.
1.
The sources of information,
assumptions~
and methodologies used.
Sources of information include the Office of Procurement and the
Department
of
Economic Development
Bill 23-15 would increase the size of vendors eligible under the LSBRP
in
the
services category and, therefore, increase the LSBRP pool of vendors that will bid on
COUrlty
contracts. Based
011
data provided
by
the
Department
of
Economic
Development, the number of businesses with employees from 51 to 100 is 806
establishments.
Of
those establishments with at least 51 employees, 61
.percent
are in
the retail trade; professional, scientific, and
technical
services; educational services;
and
art'S,
entertainment, and recreation.
2. A description of any variable that could affect the economic impact estimates.
TIle variable that could affect the economic impact is the number ofservice-category
vendors that employ between 51 and 100 employees and have revenues between $5
million .and $10 million that could now become eligible for LSBRP contract awards.
3. The
Bill's positive or
negative effect, if any
on employment,
spending, ga"\'ings,
investment,
incomes,
and property values
ill
the County,
Page I of2
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Economie Impact Statement
Bill 23-15, Contracts
~.
Local Small Business Reserve Program - Amendments
The legislation is likely to .have a positive economic effect on employment, personal
income, and business revenues for those companies that currently employ bet\Veen 51
and 100 employees and have annual income between $S million and $10 million.
Without detailed data on the number of
servic~category
vendors, a specific economic
impact cannot be determined, however an order of magnitude estimate ofthe
potential increased
local
small business revenues is provided in
the
table below under
different scenarios.
Assuming that LSBRP Expenditures remain at approximately 25% of Procurement
Expenditures Eligible for LSBRP Procurement (this ratio has been maintained since
FYI1), ,vith an assumed increase of LSBRP Eligible Procurement Expenditures in the
range of25% to 50% as shown in the table below, LSBRP revenue could increase
by
$18.4 million to $36.9 million per year as a result of this legislation. Of course; these
are only order of magnitude e1>iimates that are dependent on severdi variables
including the number of affected local small businesses, the change in procurement
related
expenditures,
and
other
faotors.
i'
!
I.·.
.
.
M111ion
?"
I
Total
Procu,r~mef!t,~9n~rs ~~.n
;li~i~le
for tsBRP
Procurement
$299.17 ,
ProcurementExp~n~iture
t()
tSBRP.
$73.71 .
' ......
'.
.,. -..
"
.... ,
I
Exemption Categories
...
.
FY14
%
Iflcreased
~.BRJ). ~1i3.iI>J~.
25%
33%
SO%
$980.n
30.50%
.$37~.96.
24.60%
$92.14
25%
$18.43·
$98(q7.
.$980.n
$39?~
$448.76
$98.03
25%
$24.32,
$110:57.
25%
$36.86
LSBRP
Exp/~ligibte
Potential'ncrease
LSBRP
Expenditure
.compared to F'f14
25%
4.
If
a Bill
is
likely to have no economic impact, why
is
that the case?
Bill 23-15 is likely to have a positive economic impact.
5. The following contributed to or concurred witll this analysis: David Platt,
Mary
Casciotti,
and Rob
Hagedoo.m.
Finance; Grace
Denno,
Office
ofProcurernent
Page 2
of2
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TESTIMONY ON BEHALF OF THE COUNTY EXECUTIVE ON BILL 23-15,
LOCAL SMALL BUSINESS RESERVE PROGRAM AMENDMENTS
June 16,2015
I amCherri Branson, Director of the Office of Procurement. I am here on behalf
of County Executive Isiah Leggett to ask for the Council's favorable consideration of Bill
23-15 and its accompanying regulations to amend the Local Small Business Reserve
Program (LS,BRP) to increase the LSBRP vendor pool and clarify language to minimize
confusion.
Montgomery County has a robust, active and responsive small business
, community. Nearly 95% of resident businesses are considered small business. 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 is widely supported by local vendors, chambers of commerce, and County
residents, because it provides
fair
yet active competition among local businesses to
ensure the public benefits from best value for the dollar spent under county contracts.
In
addition, 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, addresses an ongoing need for every small business
struggling to get a foot-hold in the marketplace, and provides an equally ongoing benefit
to the County.
One of the amendments in the Executive Regulations (ER6-15) to the LSBRP is
to "increase the size criteria for services vendors from 50 employees tol00 employees,
and from $5 million to $10 million average gross sales in the most recently completed
three fiscal years." This update is consistent with the State's recent threshold increase in
its Small Business Reserve Program, and will increase the number of businesses which
are eligible for participation in our LSBRP program. Based on data provided by the
Department of Economic Development, the number of Montgomery County based
businesses with employees from 51 to 100 is 806 businesses. Of those 806 businesses,
61
%
are
in the retail trade, professional, scientific,
and
technical services, educational
services, and arts, entertaininent, and recreation. All are
within
the County's services
contracts marketplace. We believe that increasing the eligible vendor pool will allow
more LSBRP vendors to benefit from the LSBRP program, and therefore increase the
County's LSBRP contracting volume.
Another amendment is to identify "local business" as having "its principal place
of business in the County." "Principal place of business" is defined
in
the general
Procurement Regulations (ER 2-15)
as
follows:
2.4.72 Principal Place ofBusiness in the County: A regular course ofbusiness
commerce in the County by a business, along with any ofthe following:
(1)
The business has its physical business location(s) only in the County; or
(2)
The business has physical business locations both in and outside ofthe
®
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County, and the County-based location(s) account/or over 50% o/the business's total
number
0/
employees, or over 50% ofthe business's gross sales.
Several other bills use this term, and
it
makes more sense "to have it defined in the general
Procurement Regulations rather
than
separately in each bill.
FUrther, in. response to issues and sources of confusion identified by the business
community, Bill 23-15 updates language, definitions and exemption categories to
maintain consistency with the LSBRP enforcement practice and other compliance
programs.
Bi.ll 23 -15 is one ofthe many efforts that the County is making
to
reflect business
community feedback and make improvements
to
.and update our existing compliance
programs and procurement procedures. County Executive Leggett believes that passage
of this Bill will help us to better serve our business community.
Thank you for the opportunity to testify today.
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OFFICE OF THE COUN1Y EXECUTNE
ROCKVILLE. MARYLAND 20850
,
Isiah Leggett
County Executive
!
L'
MEMORANDUM
May 5, 2015
,
.
I'·
TO:
George Leventhal, President, Montgomery
~~"l.
i
SUBJECT: Executiye Regulation 6-15,
Local
Small usiness Reserve Program
Amendments
to
the Executive Regulations
I am
1ransmitting
Executive Regulation 6-15,-Local Small Business Reserve
ProgrBm. This reguIBtion
amends
the Local Small Business Reserve Program regu.1a:tions
to:
1)
Increase the size criteria
for
services vendors from 50 employees or $5 Million
to
100
employees or $10 million average gross sales
in
the
most recently completed
three
fiscal
years;
Add
language in the qualification criteria to require the LSB
co~ors
to
provide.
at
a
roiDim~
51% ofmeasurable wo:rk on the contract, measured by the
dollar
amount,
unless the Director specifies,
in
writing.
a lower percentage based on a particular
contract's scope ofwork;
,Update
certification
procedure
language
to
replace "LSBRP self-certification" with
"Local.
Small Busmess Reserve
Appli~on"
to
minimize
confusion; and,
i
!
i
1
I
i
I
,
i.
1
I.
l'
2)
3)
4)
Update
language
in
the definitions section and the exemption categories section
to
be
consistent with
the
LSBRP Bill and other compliance
programs.
Executive Regulation 6-15
was
advertised fur 30
days
in
the
March 2015 issue of
the Montgomery County Register. No comments
were
received
in
response
to
this
advertisement
This
Regulation would
supexsede
Executive Regulation 2-09.
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montgomerycDuntymd.gov/311 . . 240-773-3556 TTY
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Fiscal
Impact Statement
Execntive Regulation 6-15,
Local.8man
Business Reserve Program
1. Executive Regulation Summa:ry
The amendment to the
Local
Small Business Reserve
Program
to:
a.
Increase
the
size
criteria for
services
vendors from
50
employOOs or
$5
million.to
100
employees or
$10
million average
gro~s
sales
in
the most recently completed
three :fiscal years;
b. Add
language
in
the qualification criteria to require
the
LSB contractors provide,
at
a minimum, 51
%
ofmeasurable work on
the
contract, measured by the dollar
amount, unless the Director specifies,
in
writing, a lower percentage based on a
particular contract's scope ofwork:;
c. Update certification procedure language to replace
"LSBRP
self-certification"
with
"Local
smail
Business Reserve Application" to minimize confusion;
_
. d
Update language
in
the definitions section
and
the .exemption categories section to
keep
Consistency
with the
LSBRP
and other compliance programs.
~.
,
2.
An
estimate of changes
in
C01.mty revenues
and
expenditures regardless ofwhether the
revenues 'or expenditures are assumed
in
the recommended or approved budget. Includes
SOuIre
of information, assumptions, and methodologies used
The amended regulation
does
not affect revenues or expenditures. The amendment
updates language and expands the scope ofthe program. No additional staff time is
needed to implement the changes.
.
3. RevC(Illle and'expenditure estimates covering
at
least the next 6
fiscal
years.
See item #2..
4.
An
actuarial analysis tlrrough the
entire
amortization period for each regulation
that
would affect retiree
pension
or group insurance costs.
Not applicable.
5.
An
estimate of expenditures related to County's information technology
(IT)
systems,
including Enterprise Resource Planning
(ERP)
sy~ms.
The
amendment 'does not affect the County's information technology systems or ERP.
I
;.
,
6. Later actions that may affect :futtn"e revenue and expenditures
if
the regulation authorizes
future
spending.
The
amendment does not authorize
future
spending.
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7. An
estimate
ofthe
staff
time needed to implement the regulation.
See #2
above.
8.
An explanation ofhow the addition ofnew
staff
responsibilities would
affect
other duties.
i
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I.
The amendment does not result
in
additional
staff
responsibilities..
9. An
estimate
of costs when an additional appropriation is
needed.
No additional appropriation
is
needed.
10. A
description of any.variable
1hat
could affect revenue
and cost
estimates.
I
I.
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Not applicable.
11. Ranges of revenue or expenditures that
are
uncertain or difficult to project.
Not applicable.
12.
Ifa
regulation is 1ik:ely.to have no :fiscal impact, why
that
is the case.
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The amendment raises the threshold foi small businesses
and
changes the reporting date;
there is no increase to the workload for the Office of Procurement
13..Other
fiscal
impacts or comments.
Not applicable.
14. The following contribUted to and concurred
with
this
analysis.
·Grace Denno, Office of Procurement
Erika Lopez-Finn, Office ofManagement and Budget
L
I
Date
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MONTGOMERY COUNTY
,
'
EXECUTIVE REGULATION
Offices
of the
County Executive -101 MQnroe
Street·
Rockville,
Mary~d
20850
Subject' .
.Local Small BUsiness Reserve Program'
Num:ber'
'"6-15
Uriginating Department
, Office of Procurement
Montgomery County RegUlation on
LOCAL SMALL BUSINESS RESERVE PROGRAM
Effective Date
,Issued by: County Executive
Regulation No. 6-15
COMCOR Sec. 11B.65.01 .
'Authority: Montgomery County Code (2014,
as
amended) Sec: llB-65 '
Supersedes: Executive Regulation 2-09 and 21-05
AM
Council Review: Method (2) under Code
S~tion
2A-15
" . Register Vol.
3.L
No. _3_,
.
Effective
D~te:·
_ _ _ _ _ __
Comment Deadline: March 30. 2015 "
,
,
Summary:
This
r~gulation
amends the Local Small Business Reserve
Prograin,
RegUIations,·to:
L'
Increase the
size
criteria for services vendors from 50, employees or $5 million to 100
,employees or $10 million average gross sales
in
the most recently completed three
fiscal years;
,
2. Add language
in
the qualification criteria to require LSBRP contractors
to
provide, at
a
minimum,
51% ofmeasurable work
Oll;
the contract, measured
by
the dollar' amount,
unless
the
Director specifies,
in
Writing,
a lower percentage based on a particular
contract's scope ofwork; ,
3.
Upd;Jte certification procedure language to replaCe "LSBRPself-certification'; with
"Local Small Business Reserve Application" to
minimize
confusion; and, .
4. Update language
in
the definitions section and the exemption categories section to
keep consistency with the LSBRP Bill and other compliance programs.
Staff contact:
.
Grace Denno, Chief
Office ofBusiness Relations and Compliance, Office ofProcurement .
240-777-9959 '
'
Office ofProeurement
255
RoCkville
Pike;
S~te
180
Rockville, ,Maryland
208~O
. This regulation implements Chapter lIB, Article
Xv
ofthe County Code, with the above
amendments.
'
Page 1 ofl3
Address:
Background:
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MONTGOMERY COUNTY
EXECUTIVE REGULATION
offices of the County Executive • 101·Monroe Street
.
• R,ockville, ,Maryland 70850
' .
.
.
.
Number
6-15
.'
~RYL~Y
Subject
Local
sman
Business
~serve
Program
, Originating
Department
Office
ofProcurement
'EffectiVe Date
.
,
Section
IlB.65.01
LocalBmall Business Reserye Program
is
amended as follows:
llB.65.01.01
Authority ,
Tn
accord8nce with the
requir~ments
ofMontgomerY County Code §
I1B~17
A.
and the'
Pro~
'authorized
und.er
ChaPter
llB, Article,XV ofthe, County Code,
~
codified at§§
11:8-65
through
70,'this
Executive
Regulation establishes de:fi:nitions, procesSes,.and procedures
to
administer and implement the'Local Small
Business
Reserv~
Program. '
llB.65.01.02
D~finitions
The De:fi:i:ritions noted in the County Procurement
La~
and related Regulation apply
to this
Regulation,. uDless .
stated ·otherwise.
(a) . Broker -
A
person
that
conducts business (other
than
real estate, investment, or insurance sales)
on a pass-through basis
and
wi:fu respect
to:
.
(i)
Supplies:
a.
Does not own, operate, cir maintain a place ofbusiness in
-wm~h'
supplies ofthe
general character required under the contraCt are kept in stock in the regular
course of business,
Does not regularly assume physical custody or possession of supplies of
comparable character to those offered
to
the County, or '
Exclusively acts as a middlemari. in the provision of supplies offered to the
County; or
b.
, c.
(n)
SerVices[,].;. does not regularly maintain the capability, capacity, training, experience, and
, applicable tegulatory licensing to directly perfomi the principal
tasks
of a contract with
the County,
~d
acquires
the services elsewhere, for,the benefit oftbe County.
,
'
,
(b)
Combined Dollar Value, of Contracts -
A
Using Department's total, combined dollar value of
procurement cOntracts for
goods~
services, or construction during a given particular fiscal
year~
'J1ris
has
the same meaning as
"total
'dollar value of
pIOcurements~ ~
that
term
is
used
in County
Code
§
I1B.:.c>6(b)
~d
(c). ,
Page 2 of
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MONTGOMERY.COUNTY
EXECUTIVE
REGULATION
~/
Offices of the County Exec:utive.·lQl Monroe Street· Rockville, Maryland 20850
,
j".
Subject
. Local Sinall Business Reserve
P:rogram
Uriginating
Department
Office
ofProcurement
..
.'
Number
6-15
Effective
Date
(c)
Director - For purposes. of
this
Regulation related to the Local Small Business Reserve Program,
the
term
"Director" means the Director
<!f
the [Department of General Services (DGS)] Office of
Procurement.
Depiutment - For purposes ofthis.Regulation related
to
the Local Small Business Reserve
Program, the
term
"Department" means the [Department of
General
Services (DGS)] Office of
Procurement.
Employment or Employ - Themeasure:rp.ent ofthe number ofpeople a business did or did not
'employ is calculated on a "Full-Time Eqtrival,enf' (FTE)basis. Any full-time, part-time,
temporary, or contractual employee, who
is
not a broker, including an employee of a·temporary
·help
fum
or a subcontractor, working. for and
receiving
compensation from the business,
will
be
included in detennining the number ofpeople a business did or did not employ for a p'articu1ar
·period. . The
ave~ed
sum ofthe specific FIE employment levels for a business
a:i:
the end of
each'calendar quarter (i.e., .March 31, June 30,
~eptember
30 and December 31) will detennine
the busmess's annual FIE employment level.
.
Gross Sales - The total doclimented value of sales, before deducting for expenses, customer
discounts, allowances, or
r e t u r n s . ·
.
.
Independently Owned and Operated - Where those in possession of
it
controlling interest and
those directing and managing the affairs of a business are :free from the influence, control, and
determination ofothers.
·Local SmallBusiness - A for-profit business, other than a broker,
that
[meets' the following
elements]:
(i)
®[(i)]
@[(il)]
[(iii)
. (iv)
.j
*t
I
I
(d)
I
(e)
(f)
(g)
(h)
.has
its pnncipalplace ofbusfuess in the County;
. [The business] is independently owned and
operated[.]~
[The business] is not a subsidiary .of another bUsiness[.t and
The business generates a significant amount of economic activity in the County.]
meets [The] criteria, size ]jrnjts, and gross sales amounts noted in
this
Regulation,
including those in [Section 3] IlB.6S.01.03 below..
"
. Page 3
ofn
(i)
Local
Small Business Reserve - Any procurement
that
is
limited to responses from Local Small
Businesses.
.
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MONTGOMERY' COUNTY
EXECUTlVE REGULATION
Offices of the County Executive" ,101 Monroe Street •
Roc~e,
Maryland 20850
Number
. 6-15
,
Effective'
Date
;
Subject
Local Small
~usihess
Reserve Program
Originating
Department
..
Office of Procurement
Locru. Small Business Reserve Application
_·An
on-line bastxI application system
that
resides'in
the County's web site; by which a Contractor IprQvides self-certi:tlcation, by affidavit or
otherwise, demonstrating] completes an on-line application., .and submits
:ti
to
the Director for
[that t;b.e Contractor meets
all
ofthe requirements ofthe definition of] certification as Local
Sinall BUSiness.
,.
a
. (k) .
Local Small Business Reserve Database - A database
that
resides in the [County] County's web
'. site
that
stores the list of [self-Certified] Local
smail
Business [Businesses] applicants, and'
eD.ables search by the business name, industry sector,
and
the County commodity code.
Regular Course of Business Commerce - The on-going and continUOus exchange ofgoods or
services. for money
between
two or more businesses or between a busiilessand consumers.]
Significant Amount ofEconomic Activity in the County- A regular course c;>f business
. commerce in the Cowty by a business, along with any ofthe following:
.
.
. (i)
The business has its physical business location(s) only in the
Co~ty;
or
(~i)
(0)
[em)
.
The business has physical business locations both in and outside ofthe County,
and
the
County-based location(s) account for over 50% of the
b~mess's
total number of .
employees, or over 50% ofthe business's gross sales.]
.
.'
.
ill[(n)] Subsidiary ofAilotJ:ter Business - A business
controlled
by another business
that
owns
all
or a .
. ' majority of its shares or interest.
l1B.6S.01.03 [Size and Sales) Criteria
To
q~
is
a "Local Small Business," a business must.;. meet the definition in 11B.65.01.02 [Section 2]
above; provide, at
f!
minimu;m.
51
%
of measurable work on the contract, measured
Qy
the dollar amount, unless'
the Director specifies, in
writiJ,lg,
a lower percentage based on
f!
particular contract's scope of work; and, meet
the following size or gross sales criteria:
.
(a)
. The wholesale operations (sale·of goods in large qp:3ntities usually for resale) cfthe business,
if
any; did'not employ more
than
30 persons. or the gross sales ofthese business operations did not
exceed an average of$5,000,000
in
its most recently completecl3 fiscal years.
The retail (sale of goodS in
small
quantities directly to the ultimate consumer) operations of the
bUsiness,
if
anY,
di~
not employ more
$an
30 persons, or the gross sales of these busmess ..
ope!ati.ons did not exceed an average of $5,000,000
in
its most recently completed 3 fiscal ye'JIS.
(b)
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MONTGOMERY COUNTY
EXECUTIVE REGULATION
Offices of the County Executive • IOI,Monroe Street • Rockville, Maryland
20850
Subject
Loeal Small
B~iness
Resyrve Program
Originating
Department
'Number,
6-15,
Effective
Date
Office,ofProcmement .
(c)
The manufacturing (producing goods from raw materials by hand or by macbIDery) operatiQns of
the business,
if
any, did not employ more than 40 persons, or the gross sales of these business
operations did not exceed an average of $14,000,000 in
its
most recently coplpleted 3
fiscal
years. ,
The services operations <;>fthe business;
if
any, did not employ more
than
[50] 100 'persons, or the
gross sales of these business operations dld not exceed an average of$[5] 10,000,000 in its most
recently completed 3 fiscal years.
The construction operations ofthe business,
if
any, did not employ more
than
50 persons, or the
,
gro~sales
ofthese business operations ,did not exceed
a:ri
average of
$
14,000,OQO
in
its most
recently completed
3
fiscal years.
Gross sales for a business that
bas
'been in operation long enough
to
file a Federal income, tax
statement,
shall
be determined by the average ofgross, sales amounts contained on the.tax ' .
formes) for the most recently completed 3 fiscal years.· In'the absence ofa federal income
tax
statement, the business must provide verification'that it meets the definition of a Local Small
Business,including the above size and sales
crite~
through audited financial statements.
If
a
business
'bas
not existed for three years, the employment
and
gross sales average(s) shall
be
the
average for each year or part of a year dming which .the business has been
in
existence. For a
. newly formed business, the detetminations regarding size and sales criteria
Will
be based upon
then-current employment levels as ofthe
tim~
ofthe Local Small Busll;iess
Res~e
Application
[applicatlon], and projected gross sales for
that
fiscal year.
If
a business ope:i:ates in more
than
one ofthe above-noted business operatio'ns classifications
, (i.e.., wholesale, retail, manufactming, service, and construction), its combined business
operations must meet the·above-stated limitation ofthe more liberal size and sales criteria For
instance, the gross annuaJ. sales limit for wholesale businesses
j.s
$5
million;
for retail goods, and
non~construction
services the limit
is
$5 million; and for construction services and manufactming
the limit is $14 million. Therefore, the combined operation cannot exceed $5 million annually
in
'average gross sales. Further, regarding size; the employinent
limit
for wholesale and retail
business operations is 30 personS versus [50]100 for a service operation. AccOrdingly, a
business
with
both wholesale and service classifications can have
up
to
[50] 100 employees.
(d)
(e)
(t)
(g)
llB.65.01.04 Contract Under Local Small Business Reserve
Program
(a)
Except as provided in Subsection (c) of IIB.6S.01.04
[this
Section 4],
this
Regulation
~plies
to
.all
procmements by a Using Department Any procmenient under this Program
is
~ubjeci:
'to
all
requirements
and
procedures otherwise applicable to
the
procmement under the Procurement
PageS of 13
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MONTGOMERY C,OUNTY'
,EXECUTIVE REGULATION
'Offices
of the
County Executive -101 Monroe Street· Rockville, Marjrland20850
Subject
N1imber
, Local
SInan
BuSiness Reserve Program
Office of Procmement
6-15
Effective Date
Uriginating Uepartment
RegUIations. Except
as
otherwise provided by law, the provisions ofthis Regulation supplement,
but do notreplace, other provisions of, and definitions
in,
the County's Procurement Regula1;ions
and Procurement Law..
, A Using Department must award a
minimum
of20 percent ofthe Using Department's'
comb~ed
dollar value of contracts issued for goods, services, or construction
to
a Local Small Business. A
Using Depm;lment need liot'designate a contract or
a
solicitation
as
a Local Small Business
Reserve in order for it
'to'
coup.t towards the immediately preceding requirement to award a
minimum of 20 percent ofthe Using Department's combined dollar value of contracts awarded
for goods, services, or construction to a Local Small Business. 'I1!.e dollar amount of a contract
that is solicited through the regular Procmement process ,that is awarded to a certified Local
Small Business counts toward the 20 percent requirement '
'
(c) , The combined dollar value ofprocurements by a Using Deparbnent under this section does not
inClude:
'
'
[1
Jill
the value of any contra,ct to which this
Regu1atio~
does not apply because of a conflict
with a State, federal, or local law or,a grant requirement;
,
[2]@ 'a preexisting contract or extension(s) of a preexisting. multi-year, contract executed by
the County;
.
,
[3](ili)
'a.
non-competiiive contract;
[4](iv) a public entity [or emergency] procUrement;
(y)
an emergency procurement;
£!
bridge contract;" ,
~
(vi)
(vii)
Cooperative procmement;
, [5](viii) any waiver,made under Montgomery County Code
§
IlB-67(f);
[6](ix)
any procurement where no Local Small Business is qualified or able to perform the
contract
as
dete~ed
by the
[head
ofthe Using Department] Director; or
'
[7]00
any single procurement
that
is estiniated to exceed $10 million.
Page 6ofl3
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MONTG,OMERY COUNTY
EXECUTIVE lmGULATION
.
Offices of the County
Executive •
101
Monro.e
Street • Rockville,
Maryland
20850 .
,
Subject
Local Small Business
Res~e
Progtam
Number.
. 6-15
EffectiVe Date
,
..
Uriginating
:lJepartment
Office ofProcurement
(d)
In
detennining whether a Contractor is "qualified or able
to
perform the contract" under
. llB.65.01.04(c)(6) [Section
4{
c)(6)], the Usm'gDepartment must make
Ii
recommendation
as
of'
the time o.f a business's offer
inrespo~
to a solicitation based on a.Contractor's :reputation, past
performance, business and financial cap;;iliility and other factors
that
demons:trate the Contractor
is C3pli:ble of satisfying the County's needs and requirementS for a specific contract. This
requirement is in additi,on to those stated in Section 6.3 of the Procuremtmt Regulations
regarding responsibility.
'
(e)
In
order for a business to be eligible to respond to a solicitation under the Local Small Business
Reserve Program, a bUsiness [has to
be
registered and certified] must complete and submit the
on-line vendor registration, including the Local Small BUsiness Reserve Application on fin] the
[County] Cotinty's web site... prior to the applicable solicitation due
date
and time [(clQsing
.
. date)]. The business must receive the Director's certification as
~
LocaLSmall BuSiness prior to
, 8?Y contract award. .
.
.
llB.65.01.05 Procedures and
Program
Operations
(a)
Any procurement of goods,
~ervices,
or construction by aUsing Department
is
eligible for
designation for the Local Small Business Reserve Program by the Using Department director, or
designee, except any proc1l!ement that is' excluded under County Code
§
I1B-66(c); theitems of
which are reiterated
in
IIB.6S.01.04(c) [Section 4(c)] above.
A solicitation for a procurement that
has
been designated under the Local Small nusiness
. Reserve Program must be published
in
the same mmmer as required for other
soli~itations'
under
. County Code,. Chapter lIB, Article III.
'
.
(b)
.
(c)
The Director
will
award a procurement contractdesignated as a Local Small Business Reserve in
.accordance with County law and Procurement Regulations. except to the extent stated otherwise
in
this
Regulation.
.,
, A·business must
affirm
and provide supporting
docwn~tation
to the Director to. show
it
is
a
Local Small Business as defined in County Code
§
1IB-65(a) when required or requested'by the
. Director.. The Local Small Business must complete any required Local Small Business ReserVe
Applicati<;>ri and
~y
supporting affidavit required by [DSG] the Director
to
demonstnite to the .
Director
that
it
is
~al
Small Business. [DSG will,post
this
re<P,.rlrement and any required
affidavit on
the
Local Small Business Reserve web
sit~.]
' .
'.'
(d)
that
a
The
Local
Small Business must be in compliance with applicable
Federal,
State imdCounty laws.
and
regulations, including those relatirig, to permits.. licenses,
and
zoning that apply to operating
Page 7 of13
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,MONTGOMlliRYCOUNTY
EXECUTIVE REGULATION
Offices of the Comity Executive • 101 Monroe
Street •
Rockville,
~ryland
20850 .
Subject '
Local Small
B~iness
Reserve
Program
Originating Department
Office ofProcurement
Number '.
6-15'
Effective Date
the 'business.
In
addition, the business must operate
in
or
from~
physical location, and, among
.other things, reference
Qy
the business to
!
post office box or virtual office is insufficient to
substantiate a physical location from which the business oPerates.
'
ffi[
(e)] Eligibility as a Local SInau Business ends [A Local
S~all
BusiJ;less
i:;
no 10nier eligible for a
procurement under the Program]
if
the bllSineSl?
has
been awarded $10 million
in
the
~gregate
in
County contracts and
at
least 10, separate coniracts:
as
either a ·CouD.ty prime conira:ctor or
subcontractor. [from] beginning January 1, 2006. The Director
will
provide written notice to the
Local Small Business when the ,Local Small Business
is
no longer eligible for the Program and
the Director
will
ren:l9Ve the Local Small Business' from the Loc'al Small Business Reserve
Database.
W((f)]
The Chief Administrative Officer may waive the application ofMontgomery County Code,
Chapter lIB. A¢cle XV, to a specific procurement
if
the Chief Ad:minis1:rative Officer
finds
that
the application of that Article conflicts with the overall objectives
and
responsibilities ofthe ' .'
Chapter. The Chief Administrative Officer must keep records on the number of waivers issued
and the reason for each waiver. This information must be reported
to
the Council by the '
'Department in the annual report on the Program under Code
§
llB-69(b)..
(hl((g)]Montgomery County Code, Chapter lIB, Article XV, does not give any person, including a
Lqcal Small Business, any right or
status,
including
standing,
to challenge the award of a
contract or subcontract under the County procurement
'system. ,
That Article is emorceable only
through
the
oversight function ofthe Cblef Ac:hninistrativeOfficer and the County .council. .
W[(h)]
Administration and Inlplementation: The following delineates the departmental responsibilities
to administer and implement the Progrl:!ID:
(i)
.
.
The Department [of General Services] adininisters and implements the Program. .It must
compile
'and
~tain
a comprehensive bidder's list of [self-certifiedJ Local Small
Business [Businesses] applicants
that
have completed and submitted the on-line Local
SmaJ1Business Reserve Application. and post that list on the County's'[Intemet] web
si~.
To accomplish these obJectives, the Department will:
((a)]!.
With
cooperation from
th~
Department of Technology Services (DTS), develop
an Internet-based LOcal Small Business Reserve Databa,se
(Datab~e)
housed
in
the County's web site
that
will,
at
a minimUm, have the following
fea~es:
,
'
1.
Local Small BuSiness Reserve Progfam descriptio.n; , ,
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MONTGOMffiRYCOUNTY
EXECUTIVE
REGULATION
.
. .
.
Offices of the County Executivcr • 101 Monroe Street •
Roc~e,
Maryland 20850
Subject·
uriginating
Department~,
Office ofProcmement
2.
3.
.
Number
6-15
Local Small Business Reserve Program
Effective Date
Local
Small
Business Reserve [program] Application
[and
Contractor
self-certification] module; .
.
[Self-Certifi~]
Local SmaIl Business
applic~t
database that can be sorted
according to the commodity code used by the County. procurement
. process;
[Self-Certified] Local Small BJ,JSiness applicant profile update module;
and
[Self-Certified] Local Small Business applicant [annual] renewal module.
4.
5.
[(b)Th.
Maintain
the DatabaSe by:
1.
2.
Enhancing the efficiency ofthe database by incorporating advancements
in
database technology;
.
.
Requiring each [self-cel:ti:ijed] Local Small Bpsiness applicant, before .
being aWarded a County contract designated as for this Program, to submit
documentation to the Department that satisfactorily demonstrates that it
meets all ofthe requirements'ofa Local SmiillBusiness as ofthe [bid
closing]. solicitation due date aild time for
that
procurement.
Tracking the number and the dollar amount of County contracts awarded
to each Local Small Business in the Database,
in
coordination with other
Using Departments.
Removing a Local Small Business from the Local Small Business Reserve
Database when the Local Small Business has received $10 million dollars
in County contracts in the aggregate and
at
least 10 separate .contracts, as
specified
fu
11B.65.01.05(f) [this SeCtion 5(e)].
Removing a Local Small Business from the Local Small Business Reserve
Database when the Local
smiill
Business fails to meet the definition of
Local Small Business as defined in this Regulation. A removed Local
Small Business
will
subsequently be added to the Local Small Business
only after the business submits an
Reserve Database by the
appeal letter and sufficient supporting documentS to the Director within . .
:fifteen (15) days after removal from the list
by
the Department. The
3.
4.
5.
Director
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76 •
MONTGOMERY COUNTY
EXECUTIVE' RE,GULATION
Offices
of the
County Executive ·,101 Monroe Street· Rockville, Maryland 20850
Numher
6-15 '
Effective Date
'
Subject
:
Local Small Business Reserve Program
Originating Department,
Office of Procurement
busines~'
s
letter must evidence
that
the business meetS ,the definition of
Loc;:al Small Business as defined in
llB.65.01.02(h)
[Section
2(h)]
ofthis
',Regulation. The review and approval ofthe appea1.1etter
is
within
the sqle
diScretion of the Director.
'
'
6.
,Assigning a
unique
County Vendor Identification number to each Local'
Small Business
in
the Database. '
[(c)1f.:. Market the Program and Provide Outreach Efforts to Local Sm8n Businesses by:'
L
,2.
Advertising the Program in
~edia,
as deemed necessary by the
Director, to increase the public awareness
~f
the Program.
Preparing a Program brochure and other necessary collatenu material, and
distributing these materjals in strategic locations, as determined by the
Director~
to 'enable easy and timely access by businesses in the County.
Participating
in
County business ,events, at least three times a year, to
'market the Program. '
'
Wo:rking with small business resource groups
in
the Gounty such as:the
Chambers of Commerce, Small Business Development Centers, Women's
Business Organization, etc., to disseminate
Program
information
to
the
member businesses.
'
Preparing a press release once a year to publicize the Program results.
the
, 3.
4.
5.
[(d)]d. Reporting: By November 30 each year,. the Director must report to the Council'
. on the Local Small Business Reserve Program.'
This
r~port
muSt'include: the
number, type, and dollar amount of contracts
awardedun~er
this RegUlation
. during the preceding fisqal year; the number, type, and dollar amount of each
waiver
from
the Internet posting requirement granted by the Director; the number,
type,
and dollar amount of each waiver pertaining to the Progranithat ,is granted
by the Chief Administrative Officer; information about how these numbers have
changed
from
the preceding fiscal year; and, the extent of outreach efforts by
, [DGS] the DirectQr. [DGS] The Director [through
its
Office of Procurement]
will
work With tlte office of Legislative Oversight
to
ensure1hat the data needed
to
, conduct a comprehensive evaluation ofthe program are collected.
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MONTGOMERY COUNTY
EXE.CU.TIVE
REGULATION
Offices of the County Executive
'''101
Monroe Street •
Roc~e,.Maryland
20850
Subject
Number
.Local Small BusiD.ess Reserve Program
.
Originating Department
. 6-15
Effective Date
. Office
of Procurement
[(e)]e. Take any other actipn necessary to administer or implement this
Pr?gram.
(ii)
The Using Department: The Using Department
will:
[(a)]a. Award aminjmum of 20 percent ofthe Using Department's combined dollar
value of contracts issued for goods, services, or construction to Local Small .
Businesses, except as noted in llB.65.01.04{c) [Section.4(c)], above.
[(b):i.Jl.
Notify the Office ofProcurement upon designating a procurement as a Local
Small Business Reserve.
S
[(c)
k.
earch the Local Small B.usine.ss Reserve Database before conducting
!l:
. solicitation process and before' recommending vendor for award, ina contract .
that has been designated for this Program.
[If
the vendOr
is
self- certified in the
Local Small Business Reserve Database, the] lhe Using Department must obtain
verification from [DGS] the Director, prior to recommending the vendor for
award, that the vendor is an eligible Local Small Business.
a
[(d)
Post on a County web site each planned purchrise of goods, services, or
construction valued at $5,000 to $25,000, regardless ofwhether the solicitation is
designated as a Local Small Business Reserve or not, for 5 business
~ys
in the
manner described in County Code Section I1B-17A, before the County enters
into a contract.]
.
.
.
. [(e)]d. Track
and
report to the Director,by September 30 of
ea~h
year, the procurement
activities under the
Program
during the previous fiscal year, in accordance with
County Code Section 11B-69(a) and (b), including:
.1.
....
. Number, type, and combined dollar value of contracts awarded;
Number, type, and combined dollar value of contracts
that
are' not
.
included under this Regulation, in accordance with County Code Section'
llB-66(c); .
.
.
3.
4. .
Number,
type,.
and combined dollar value of contracts awarded to Local
Small Businesses.
Number, type, and combined dollar value of contracts
that
were initially
designated Under the Program but were not awarded to a Local Small
Page 11 of 13.
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MONTGOMffiRYCOUNTY
EXECUTIVE REGULATION
Office$ of the C.,unty Executive • 101 Monroe Street • Rockville, Maryland 20850
.
.
Subject
Number·
Local
S~
Business Reserve Program
Originating
Depa~ent
6-l5
.
Effective Date
Office of Procurement
'Business, and the reason they were not awarded to a Local SIilall
Business.
5.
Procedural changes and other related administrative efforts made to
comply with this Regulation, and the asso"ciated fiscal impact of such
changes.
.
.
.
[(f)l!;:.
Take any other action necessary
to
comply
with
this Regulation.
(ill)
The Department [of General Services]
will: .
[(a) Develop procedures and processes
to
enable a Using Department to post each
planned purchase of goods; services, or construction valued at $5;000 to $25,000,
'on,a County web site. The Using Departmentmust.clearly identify, on the
County web site, a Procurement that
is
designated as Local Small Business
. Reserve.]
((b
)]a. Develop' a 'process
to
ensure that in any Informal'Solicitation, the vendor, selection
process used by the Office of Procurement to generate the five random vendor
the
selections required under the Procurement Regulations includes vendors
Local Small Business Reserve Database.
.
from
((c)]b. The Director must keep recOrds on the :t;lumber of waivers ofa Using.
Department's' Internet posting requirement issued in accordance with County
Code Section IlB-17A(c), during a given fiscal year, and the reason for each'
waiyer.
~e
Director must report this infoimation
to
the Chief Administmtive
Officer (CAO) by [September]. October' 30 of eaCh year. "
(iv)
Department ofTechnology Services - The Department of TechnolQgy Services
will
assist
th~
Department
in
administering and implementing the Program, including that which is
indicated
in [(h)]ill(i) of IlB.65.01.05 [this Section 5];
The Chief A:dministr"mve
OffiCer
will:
[(a)]a. Have the authority to waive. the application ofthis Regulation to a specific
,
contract
if
the Chief Administrative Officer firids that the application of this
Regulation conflicts with the overall objectives and :responsibilities ofArticle XV
.of Chapter lIB ofthe County Code. The Chief Ac:Inpnistrative Officer must keep.
records on the number ofwaivers the Chief Ad.m.iniStrative Officer issues and the
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MONTGOMERY COUNTY
EXECUTIVE REGULATION
Offices of the County Executive • 101 Monroe Street .- Rockville,
Maryland
20850
Subject
Local
Small Business Reserve Program
Originating
Department
..
.
Number.
6-15 .
Effective Date
Office ofProcurement
.
. ·.reason for
each
waiver. This.information must be reported
to
the Director
so this
information can be included
in
the
annual
report to the County Cou:ncil on the
Program,
.as
required under
CD~
Code Section IlB-69(b).
[(b)lli
Provide the
ov~ight
fimelion to enforce the Regulation.
llB.65.~1.Q6
Penalty; Enforcement .
In
addition to that
stated
mder
County
Law, or a particular contract, any person who willfully
makes
a false
statement to a-County official Qr employee for the pmpose ofinfluencing participation in the
Progiam;
or
fraudulently obtains
1
attempts to obtain; or aid
anoth~r p~n
in
fraudUlen:f;ly obtaining or attempting to obtain
public monies to which the person is
pot
entitled under this Regulation constit.u,tes a material breach ofthe
contract· Accordingly the CQunty
may
tb,en exercise any available
remedy,
including, terminating the contract
for default
.
llB.65.01.07 Effective Date
This
Ex~utive
Regulation takes effect upon approval by the County Council.
~
~Leggett ~
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MONTGOMERY COUNTY
.
.
EXECUTIVE REGULATION
.
..
"Offices
of th" County Executive • 101
Monroe"
street • Rockville,
Maryr,land
20850
Subject
Number
i
I
!
I
1
'1
, Local Small Business Reserve Program
Uriginating Department
6-15
Effective Date
Office of Procurement
Montgomery County Regulation on
LO¢AL SMALL BUS,INESS RESERVE PROGRAM
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Issued by: County Executive
" " Regulation No. '6-15
. COMCOR Sec.
J
1B.65.01
Authority: Montgomery County Code (2014, amended) Sec. IlB-65
Supersedes: ExeCutive Regulation 2-09 and 21-05
AM "
" Council Review: Method (2) under Code Section 2A.:15
"
Register VoL
.2L
No.
2- .
Effective Date:
Coinment Deadline: March 30,2015 "
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Summary:
This regulation amends the Local Sniall Business Reserve Program Regulations; to:
1. Increase the size criteria for services vendors from 50 employees .or $5 million to 100"
employees or $10 IDillion average gross 'sales
~
the most reCently completed three
fiscal years; "
2~
Add language
in
the qualification criteria
to.
require LSBRP 'contractors
to
provide,
at
a
minimUJ:Il,.
5"1% ofmeasurable work on the contract, measured by the dollar amQunt,
unless the Directo.r specifies,
in
writing,'a lower percentage
based
0.:0-
a
particular
"
contract's scope of work;
·3.
Update certification procedure language to
replace
"LSBRP self-certification"·Wi.th
"Local Small Business Reserve Application" to minimize confusion; and,
4. Update language
in
the
de:finitio.~
section and the exemption catego.ries section to
keep consistency with the LSBRP Bill
and
other compliance
programs.
Grace Denno, Chief
Office of13usiness Relations and Co;mplianee,
Office
ofProcurement
240-777-9959
Office o.fProcurement
255 Rockville Pike, S,uite
180
Rockville, Maryland 20850
Staff contact:
Address:
Background:
This
tegQiation implements Chapter lIB, Article XV ofthe County Code, with the above
,amendments. "
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MONTGO~RYCOUNTY
EXECUTIVE REGULATION:
.
.
Subject
Local Small Business
Reserv~
Program
Originating Department
Office of Procurement
Offices of the
~ounty
Executive • 101 Monroe Street • Rockville, Maryland 20850
Number
&:15
Effective Date
j
Section llB.65.01
Local
Small Business Reserve Program
is
amended as follows: .
I
llB.6S.01.01 Authority
In accordance with the requirements ofMontgomery County Code
§
11B-17
A,
and the Prograln
authorized under Chapter lIB, Article XV ofthe County Code, as codified at
§§
11B-65 through 70,
this
Executive Regulation establishes definitions, processes, and procedures
to
adminiSter
and implement the Local
Small Business Reserve
Pro~.
.
llB.65~01.02
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Definitions
The Defuritions noted in the County Procurement Law 'and related Regulation apply to this Regulation, unless
stated otherwise.
(a) Broker - A person that
condu~ts
business (other
than
real estate, investment, or insurance sales) on
, a pass-through basis and with
respect
tq:
(i)
Supplies:
a
Does not own, operate, or maintain place of business in
~hich
supplies ofthe general
character required under the contract are kept in stock in the regular course ofbusiness,
b., Does not regularly assume physical custody or possession of supplies ofcomparable
character to those offered to the County, or
. ,
c. Exclusively
acts
as a middleman in the provision of supplies offered to the CountY; or
a
(ii)
Services: does. not, regularly maintain the capability, capacity, training, experience, and
applicable regUlatory licensing to directly perform the principal tasks of a contract with the
CountY, and acquires the 'services elsewhere, for the benefit ofthe County.
(b) Combined: Dollar Value of Contracts - A Using Department's total, combined dollar value of
procurement contracts for goods, services, or
co~ction
during a given particular
fiscal
year.
1bis
has
the same meaning as
''total
dollar value of procurements" as
that
term
is
used in County
Code
§
llB-66(b) and (c).
"
(c} Director - For purposes ofthis Regulation related to the Local Small Business Reserve Program, the
term.
''DiT~ctor''
meanS the Director ofthe Office ofProcurement.
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MONTGOMERY COUNTY
EXECUTIVE REGULATION
Offices
Subject
Local Small Business Reserve Program
Uriginating Departnient
Office' ofProcurement
of
the County Executive • 1
~1
Monroe Street • Rockyille, Maryland 20850
Number
6-15'
Effective Date '
(d) , Department - For purposes of
this
Regulation related to the Local, Small Business Reserve
Program;
,the term "Departmenf' means the Office ofProcurement
','
,
(e)
Employrilent or Employ - The measurement ofthe number ofpeople
a
business did or did not
employ is calculated on a
~u,ll-:rime
Equivalent"
(FIE)
b.asis.
Any
ful1~tiine"part-time"
, '
temporary, or contractUal employee, who
is
not a broker,
incl~g
an employee of a temporary, '
,help
:firm
or a subcontractor, working for and receiving compensation from the business..
will
be' ,
included in determining the number of people a business did or did not employ for a particular
period. The averaged sum ofthe specific
,FTE
employment levels for a business at the end of each
,
calen~
quarter (i.e., March
31,
june 30, September
30
and Decetnber'31)
will
determine the
business's annual
FIE
em;ployment level.'
'
tptal documented value ofsales, before deducting for expenses, customer
(f)
Gross Sales
~
discounts, allowances, or
returns.
(g)
The
In~pendently,
Owned and Operated -
Where
those in possession of a controlling interest and tho'se '
directing and managing the affairs of a business
are
free from the influence, control, and
,
, determination ofothers. "
(h)
LOcal Small Business -
A
for-profit business, other
than
a
broker,
that: '
(i)
has
its
principal
place of business in the CoUIity; ," ,
is independently owned and operated;'
is not a subsidiary of another business;
~ci
meets cnteria,
size
liinits, and gross sales amounts noted in'this Regulation, including
'
those
in
11B.65.01.03
below.
(ii)
(iii)
(iv)
(i) Local Small Business Reserve - Any procurement
that
is
limited
to responses
fr~m
Local, Small
Businesses.
d)
Local Small Business Reserve Application -
Ali'
on-line based application system that resides in the
County's,web site, by which a
~ontractor
completes an on-line application, and sUbmits it t<;l the
"
,
,
, Director for certification as a Local Small Busine$s.'
(k) ,
,Local Small Business Reserve Database - A database
that
resides in the County's web site,
th.at
stores the
list
ofLocal SmaJ) Business applicants, and enables'search by the business
name~,
industry sector; and the Coupty commodity code,
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.76;
~.RYLt-j§>.
Subject
MONTGO~RYCOUNTY
EXECUTIVE REGULATION
Offices
olthe
Co~ty
Executive
-101
Monroe Street - Rockville,
M;aryland 2(1850
'.
Local
Small Busi:p.ess
Re.~e
Program
".
Number
6-15
Effective Date
Uriginating Department
Office' ofProcurement
(lj .
ubsidiary ofAnother Business -
A
busiriess controlled by another business
thai
owns
all
or a
S
majority of its shares or interest
.
llB.65.01.03
Criteria.
To qualify as a "Local
s:tnal1
Business," a business must: meefthe definition in IlB.(iS.Ot02 above;
provide, at a minimum, 51
~
ofmeasurable work on the contract, measured by the dollar amount, unless
the.D.irector specifies, in writing. a lower percentage based on a particular contract's scope ofwork; and,
or gross sales criteria:.
.
meet the following
size
(a) The wholesale operations (sale of goods
ill
large quantities usually for resale) of the business,
if
any, did not employ more
than
30 persons, or the gross sales ofthese business operations did not
exceed an average of$S,OOO;OOO in its most recently completed 3
:fiscal
years.
(b)
The retail (sale of goods in
small
quantities directly to the ultimate consumer) operations of the
business,
ifany,
did not employ more
than
30 persons, or the gross sales Qfthese business
operations did not exceed an
aveJ."afi~
of$S,OOO,OOO in its most recently completed 3 fiscal years"
(c) The manufacturing (producing goods from raw materials by hand or by m,achinery) operations of
the business,
ifany,
did not employ more than 40 persons, or the gross sales
ofthes~
business
operations did not
.
exceed an average of $14,000,000 in its most recently completed 3 fiscal years.
.
.
(d) The services operations ofthe business,
if
any, did not employ more
than
100 persons, or
jhe
gross
sales ofthese business operations did not exceed an average of $10,000,000 in
its
most recently
' .
completed 3 fiscal years.
(e) The construction operations ofthe business, ifany, did not employ.more
than
50
perso~,
or the
gross sales ofthese bilsinessoperations did not exceed an average of$14,000,000 in its most"
recently completed 3 fiscal years.
(f)
Gross sales for a business
that
has
been in operation long enough
to
file a Federal income
ta,x
statement;shall be determined by the average of gross sales amountS contained on the tax formes)
for the most recently
comple~ed
3 fiscal years.
In
the absence of a federal income
tax
stai:ement, the
business must provide verification
that
it meets the de:ti:rlltion of a
LoCal
Small
Business, including'
the above size and sales Criteria, through audited financial
statements.
Ifa
business
h~
pot existed
for three years, the employment and gross sales
averag~s)
shall be the average for each year or part
of a year during which the business
has
been in existence. For a newly formed business, the .
determinations regarcllD.g
size
and sales criteria will be based upon
then-~nt ~mployment
levels .
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MONTGOMERY COUNTY
EXECUTIVE REGULATION
Offices of tJie
C~mity
Executive • 101 Monroe Street .- Rockville, Maryland 20850
Subject
Local Small Business Reserve Program
Uriginatiilg
Department
Office of Procurement
11
I,
Number
6-15
Effective Date
as ofthe
ofthe Local Small Business Reserve Application" and projected gross sales for
that
fiscal year.
­
'(g)
If
a busineSs operatc:<s in more
than
one ofthe above-noted business operations classifications
(i.~'.,
wholesale, retail, manufacturing, service, and construction), its combined business operations must
meet the above.;.stated limItation of the-more liberal size and sales criteria. For instance, the gross
all:Q.ual
sales limit for wholeSale businesses is $5 million; for retail goods,
and
non-construction
services the limit is $5 million; and for construction services and manufacturing the limit is $14
million. Therefore, the combined operation cannot exceed $5 million annually in average gross
sales.:
Further,
regarding size, the employment limit for wholesale and retail bUsmess operations is
30 persons versus 100 for a service operation.
Accor~gly,
a business
with
both wholesale and
service claSsifications can have up to 1
QO
employees.
-!
time
"!
llB.65.01.04 Contract Under Local Small Business Reserve Program
_
(a) Except as provided
iri
Subsection (c) ofthis llB.65.01.04, this Regulation applies to all
-procUrements by Using Department. Any procurement under this Program is subject to all
requirements and procedures otherwise applicable to the procurement under the Procurement
Regulations. Except as otherwise provided by law, the'provisions of
Regulation supplement,
but do' not replace, other provisions of, and definitions in, the County's Procurement Regulations
and Procutement Law.
a
this
(b) A
Using Department must award a minimum of20'percent
ofth~
Using Department's combined
dollar value of contracts
~ed
for goods, services, or construction
to
a Local Small Business.
'A
Using Department need not designate a contractor a solicitation as a
Local
SIilall Business Reserve
in order for it to count towards the immediately preceding requirement to -award a minimum of 20
percent of the Usmg Department's combined dollar value of contraCts awarded for goods, services, _
or construction to a
Ipcal
Small Business. The dollar amomit of a contract that is solicited through
_the regular Procurement process that is awarded to, a certified Local Small Business counts toward
the 20 percent requirement
(c) The combined dollar Value of procurements by 'a Using Deparbnent under this
se~on
does not
include:
Page 5 of12­
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MONTGOMERY COUNTY
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EXECUTIVE REGULATION'
.
.Offices of the County Executive • 101 Monroe Street • Rockville, Maryland. 20850
Subject
.'
LocalSmall Business Reserve Program
Number
.6-15
Effective Date
Originating Department.
Office ofProcurement
(1) the value of any contract to which this Regulation does not apply because of a conflict with a
.
State, federal, or local. law or a grant
req~ent;
(2)' a preexisting contract or extension(s) of a preexisting, multi-Yel:!!, contract e;xecuted by the
Coun~;
.
(3) a non-competitive contract; ,
(4) a public
enti~:procurement;
(5)'an
emergency'procurem~nt;,
(6)
a bridge contract;
(7) a cooperative procurement;
(8) any waiver made under Montgomery
Coun~
Code
§.
11B-67(f);
(9) any procurement where no LOc8I Small
Busin~ss
is qualified orable to perform the contraCt as
, ,determined by the Diiector; or
(10) any single piocurement that is estimated to exceed $10 million.
(d)
In
determining whether a Contractor is "qualified or able to perform the cantracf' under .
llB.65.01.04(c)(6), the Using Department must make a recorDmendation
as
of the tUne of a
'buSiness's offer in response to a solicitation based on a Contractor's reputation, past performance,
business and financial
capab~
and other factors that demonstrate the Contractor is capable of .
satisfying the County's needs and requirements for
it
specific contract
This
requirement
is
in
addition to those stated in Section 6.3 ofthe Procurement Regulations regarding
responsibili~
.
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(e)
In
order for a business to be eligible to respond to a solicitation-under the, Local Small Business
Reserve Program:, a business must complete and submit the on-line vendor registration, :including
the Local Small Business Reserve, Application on the County's web site, prior to the applicaQle
soliciU),tion due date and time. The busineSs muSt receive the Director's certification as a Local
Small Business prior to any contract award;
.
Page6of12
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MONTGOMERY ,COUNTY
EXECUTIVE REGULATION
,
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Offices ofthe County Executive -101 Monroe Street - Rockville, Maryland 20850
Subject
Local.
Small Business Reserve Program
Number
6-15
, Effective Date
Originating Department '
CtinceofPto~anent
llB.6S.01.05 Procedures and Program Operations,
(a) Any procurement of
g~ods,
,services, or conStruction by a Usirig 1)epartrrient is eligible for'
designation for
~e
Local Small Business Reserve Program,by the Using Department director, or
desigri.ee, except any procurement
that
;.s
excluded under County Code § llB-66(c), the items of
which
aiereite~in
1.1B.65.01.04(c) above;
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(b) A solicitatipn for a procuranent that
has
been
designated. under the .Local Small Business Reserve
Program must be published in the same m1mner as'required for other solicitations under County
.
Code, Chapter lIB, Article
m.
(c) The Director
will
award a procurement contract desigxi.ated as a Local Small
Busin~ss
Reserve in
accordance with County law and
Pro~ement
Regulations, except to the extent stated otherwise in
this
Regulation. '
.
­
, (d) A business must affirm and provide supporting documentation to the Director
to
sJ:1ow that it is a
, Local Small Business as defined in County Code'§ llB-65(a) when required or requested by the
Director: The Local Small Business
11lust
complete. any required Local Small BuSiness Reserve
Application and any supporting affidaVit required by the'Director
to
demonstrate
to
the Director
.
. . that it is a Local Small
B~iness.,
(e) The 'Lo'cal Small Business must
be
in compliance with applicable Federal, State and County laws
and regulations, including those relating to
permits,
licenSes, and
~ning
that apply to operating.the
business.
In
addition,
the
business mUst operate in or from physical location,
and,
among other
things, referenpe by the business to a
po~
office box or
virtual
office is insufficient to substantiate a
'physical location from which the business operates.
'
a
(f)
Eli!i"ibiiity as a Local Small Business ends
if
the business
ruis
been awarded $10 million in the
aggregate in County contracts and at least 10 separate contracts, as either a County prime contractor
, or subContractor, beginning'
Janilluy
1, 2006. The Director
will
provide written notice to the Local
Small Business when
the
Local Small Business is no longer eligible for
the
Program and the
Director
will
r~move
the LocalSnian Business from the Local Small Business Reserve Database. '
(g) The Chief Administrative Officer may waive the application ofMoritgomery County Code, Chapter
lIB, Article XV, to a specific procurement
if
the Chief Administrative Officer :finds
that
the
applica~on
of
that
Article conflicts with the overau objectives and responsibilities ofthe Chapter.
·The Chief AdminiStrative Officer
r;nust
keep records on the number of waivers issued, and the
reason for each waiver.
This
information must be reported to the Council by the Department
in
the
'
annual report on the
Progra.m
Under Code
§
l1B-69(b).
Page 7 'of 12
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MONTGOMERY COUNTY
EXECU·TIVE .REGULATION
Offices of the County Executive • 101 Monroe .Street • Rockville, Mary-l.and 20850
Subject·
.
Local Small Business Reserve
Program
Originating
Department .
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Number
6-15
Effective Date
Office of Procurement
(h) Montgomery
County Code, Chapter lIB, Article XV, does not give any person, including a Local
Business, any right or-status, including
standing,'
to challenge the award of a contract or
Subcontract under the County procurement system. That Article
is
enforceable only through the
oversight function of the
Chi~f
Administrative Officer and the County Council.
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(i) Administration and Implementation: The following delineates the departmental responsibilities to
ad~injster
and' implement the
Program:
.
(i). The
Department administerS and implements the Program.
It
must'cOmpile
and
maiiJ.tain
a
comprehensive bidder's list ofLocal Small Business applic3nts that have completed and
submitted the on-liD.e Local Small Busilless Reserve' Applicatioil, and post that
list
on the
County's web site. To accomplish these objectives, the Department will:
a
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With cooperation from the Department of Technology Services (PTS), develop an
Internet-based Local Small Business Reserve Database (Database) housed
ill
the
County's. web
sit~
that
Win,
at a miriimum, have the foll<?wing features:
1:
2.
3.
4. .
5.
Local Small Business Reserve
Program
description; :
Local
smail
Business Reserve Application module;
Local Small Business applicant database that can be sorted according to the
cOmmodity code used by the County procurement process;
Local Small Business applicant profile update module; 'and
Local Small Business applicant renewal
.
module.
'.
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b.Maintain the Database by:
.1.
2.
.Enhancing the efficiency ofthe database by incorporating advancements
in
database technology;
.
Requiring each Local Small Busjness applicant, before being awarded a County
contract designated as for
this
Program, to submit' documentatio:h to' the
Department that satisfactorily demonstrates
that
it meets
all
of
the
requirements of
a
Local
Small Business as of the solicitation due date and time for that
procurement
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MONTGOMffiRYCOUNTY
EXECUTIVE'REGULATION
Offices of the County Executive ;101
M~nroe
Street .. Rockville, Maryland 20850
Subject
,
Local Small Business Reserve Program
Number
6-15
Effective Date
Uriginating
Department
,
, Office ofProcurement
3.
' Tracking the nwnber and the dollar amount of County con:tracts awarded to each
Local Small Business i:J;lthe'Database, in coordination with other Using
Departmen~
,
,
4.
'"
Removmg,a Local Small BUsiness
frotri
the'Local Smhll Business Reserve
Database when the Local'Sniall Business
has
received $10 million dollars in
County contracts in the aggregate and at least
1O·
~eparate
contracts,
as
specified
in
11~.65.01.05(f).
.
Removing a Local Small Business from the Local Small Business Reserve '
Datab~e
when the Local Small
Bus~ess
fails to meet the definition ofLQcal
Small Business as defined
in
this
Regulation. A removed Local Small,Business '
will
subsequently be added to the Local Small BtisinessReserve Database by the
Director only after the business submits an appeall,etter and sufficient supporting
documents to the Director within: fifteei:l
(IS}
days
after
removal from the list by
the Depar1ment The business's letter must evidenCe that the buSiness meets the
'
definition of LOcal Small Busmess as defined in I1B.65.01.02(h) of
this
Regulation. The review and approval of the appeal letter is
within
sole
discretion ofthe Director.
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5.
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the
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6. '
c. '
Assigning a
unique
County Vendor Identification number to each
LOcal
Small '
'
Business in the Database.
Market the Program and Provide
Outreach
Efforts to Local Small Businesses by:
1.
2.
Advertising the Program
in
the media,
as
deemed necessary by the Director, to,
increase the public awareness ofthe Program. '
Preparing a Program brochure and other necessary collateral material, and
'distributing these materials in strategic locations, as determined by the Director,
to
enable easy and timely access by businesses in the County.
Participating in County business events, at least three ti:rD.es a year, to market the
, Program.
'
.
WorkIDg with small business
~source ~ups
in the County such as the Chambers'
of Commerce.
Small
Business Development Centers, Women',s Business
Org~on, et~.,
to
disseminate Program information to the member businesses.
"
3.
4.
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MONTGOMERY COUNTY
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~Ryu..~.
. Subject
U~ating
EXECUTIVE REGULATION
Offices of the C;:ounty Executive • 101 Monroe Street· Rockville, Maryland 20850
NllDlber
. Local Small Business Reserve Pro gram.
..
6-15
Effective Date
Department
Office ofProcurement
. 5.
d.
. Preparing a press release once a year to publicize the Program results..
(
Reporting: By November 30 each
year~
the
Director must rttport
to
the Council
Oil
the
Local
Small
Bus~ess
Reserve Program. 1ms report must include: the
number~
type, and
dollar amount ofcontracts awarded uilder this Regulation during the preceding fiscal year;
the number, type, and dollar amount of each waiver from the Internet'
posting
requirement
granted
by the llirector; the n,umber, type, and dollar amount of
each
waiver 'pertaining to
the Program.
that
is
gra:o.ted by fP.e Chief Administrative'Officer; information about how
these numbers have changed froni the preceding fiscal year; and, the .extent of outreach
efforts by the Director. The Director
will
work with the Office ofLegislative Oversight to
ensure that the
chrui
needed to conduct a comprehensive evaluation ofthe program are .
collected.
Take any other action necessary to administer or imp!ement this Program.
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(n)
The Using Departnient: The Using DepaItment
will:
a.
Award a minimum of20 percent ofthe Using Department's combined dollar value of
contracts issued for goods, services, or construction to Local Smarr Businesses,except
as
noted
in
11B.65.01.04(c), above.
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b. Notify
the'
Office of Procurement upon designating a procurement as a Local Small
Business Rese1'Ve. .
c. Search the Local SmaIl Business Reserve Dat.aJ:)ase before conducting a solicitation
process and before recommending a vendor for award, in a contract that has been
designari::d for
this
Program. The Using Department must obtain verification from the
pirector, prior to recommending the vendor for award,
that
the vendor is
an
eligible Local
Small Business.
.
d. Track and report to the Director, by September 30 of each year, the procurement activities
under the Prograni during the previous fiscal year,
in
accordance with County Code
Section 11B-69(a) and
(Q),
including:
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2.
Number;
type,
and combined dollar Value of contracts awarded;
Number; type, and combined dollar value of contracts that are not included -pUder
this Regulation, in'accordance with CoUnty Code Section 11B-66(c);
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Page 10 of 12
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MONTGOMffiRYCOUNTY
. .
.
EXECUTIVE'REGULATION
.
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6-15
Offices of
the
County Executiye • 101
M~nroe
Street
~
Rockville, Maryland 20850
SlJbject
Nmilber
,
Local Small Busfuess Reserve Program
Office ofProcurement
3,
Originating Department
Effective
Date
,Number,
type,
and combined dollar value of contracts awarded to Local Small
Businesses.
Number. type, and combined' dollar
v~ue
of contracts that were jnitially
q.esignated under the Program but were not awarded to a
Loc81
Small Business,
and the reason they were not awarded to a Local Small·
B~iness.
Procedural changes and other related administrative efforts niade to;comply with .
this
Regulation, and the associareg fiscal impact of
such
changes. .
4.
,
5.
e. Take any.other action necessary to comply withthis Regulation.
(iii)
The, Department will:
a. 'Develop a process to ensure that in any Informal Solicitation, the vendor
sel~ctionprocess
used by the Office ofProcurement to generate the five random vendor 'selections required
under the Procurement Regulations includes vendors from the Local Small Business
Reserye Database.
.
, ,
b. The Director must keep records on the number ofwaivers of a Using Department's
Internet posting requirement issued in accordance with County Code Section lIB-I'!A(c),
during a given fiscal year, and the reason for each waiver. The Director must report
this,
information to the Chief Administrative Officer (CAO) by October 30 of each year_
, (iv) Department ofTechnology Services - The Department QfTecbriology Services
will
assist the
, ,Department in administering and implementing the Program, including
$at
which
is
indicated
in IIB.65.01.05(i).
.
(v) The Chief Administrative Officer
will:
a. .
Have the .authority to wwve the application ofthis Regulation to a specific contract
ifthe
Chief
A~strative
Officer finds
that
the application of this Regulation conflicts ·with the .
overall objectives and resPonsibilities of Article XV of Chapter lIB ofthe County
Code~
The Chief Administrative Office( must keep records on the number of waivers the Chief
, Administrative Officer issues and the reason for each waiver.
This
information must be
reported to the Director so this information can be inCluded in the annual report to the
County Council on
th~
Program, as required under County Code Section 1IB-69(b).. '
b. Provide the oversight :fin?ction to enforce the Regulation.
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MONTGOMffiRY COUNTY
EXECUTNE REGULATION
Offices
ofthe
CoUnty Executive -101 Monroe Street· Rockville, Maryland 20850
!
Subject
Number
Local Small Business Reserve Program
Originating
Department
6-15
Eff~tive
Date
Office ofProcurement
I1B.65.01.06
Penalty;
Enforcement
.
,
,
In
addition to that
stated
under County Law, or a particular contract, any person who willfully mBkes a false
statement
to
a County official or employee for the purpose of influencing participation in the Program; or
fraudulently obtains. attempts to obtain, or aid another person in fraudulently obtaining or attempting to obtain
public monies
to
which :the person is not entitled under
this
Regulation constitutes a material breach of the
contract: Accordingly the County may then exercise any available remedy. including, 'tenninating the contract
for default.
I1B.65.01.07 Effective Date
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This
Executive Regulation takes effect upon approval by the County Council.
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COunty Executive
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Approved as to foml. and legality:
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