Agenda Item 7
December 5, 2017
Public Hearing
MEMO RAND UM
December 1, 2017
TO:
County Council
FROM:
Robert
H. Drummer, Senior Legislative Attor ney~
\,
Public Hearing:
Bill 37-17, Local Small Business Reserve Program - Eligibility -
SUBJECT:
Amendments
Bill 37-17, Local Small Business Reserve Program - Eligibility - Amendments, sponsored by Lead
Sponsor Council President at the request of the County Executive, was introduced on November 14, 2017.
A Government Operations and Fiscal Policy Committee worksession will be scheduled at a later date.
Bill 37-17 would increase the aggregate dollar amount of County contracts awarded to a business
before the business is no longer eligible for a procurement under the Local Small Business Reserve
Program.
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
defined market in which small businesses could 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.
Under current law, a local small business is no longer eligible for a procurement under the LSBRP
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 the Program began on January 1, 2006. Bill
3 7-17 would increase the aggregate dollar amount of County contracts a local small business can receive
before "graduating" from the Program.
Since the Program began in 2006, there have been 2 companies that have "graduated."
In
May
2014, Colossal Contractors had received 16 County contracts with a cumulative dollar value of $10.1
million.
In
June 2017, Highway and Safety Services, Inc. had received 12 contracts with a cumulative
dollar value over $30 million. Bill 37-17 would reinstate Colossal Contractors back into the Program.
Highway and Safety Services, Inc. would remain ineligible for new contracts awarded under the LSBRP
Program.
This packet contains:
Bill 37-17
Legislative Request Report
Memo from County Executive
Fiscal and Economic Impact statement
F:\LAW\BILLS\1737 Local Small Business Reserve Program\PH Memo.Docx
Circle#
1
3
4
5
 PDF to HTML - Convert PDF files to HTML files
37-17
Bill No.
Business
Small
Concerning: Local
Reserve Program - Eligibility -
Amendments
Revised: November
3. 2017
Draft No.
_1
November
14. 2017
Introduced:
May
14, 2019
Expires:
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: _N=on ~e~--- ---
Ch. _ _ , Laws of Mont. Co. _ __
COUNT Y COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Council President at the request of the County Executive
AN ACT
to:
(1)
(2)
increase the aggregate dollar amount of County contracts awarded to a business before
the business is no longer eligible for a procurement under the Local Small Business
Reserve Program; and
generally amend the law governing the Local Small Business Reserve Program.
By amending
Montgomery County Code
Chapter l lB, Contracts and Procurement
Section
llB-67
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
*
* *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
 PDF to HTML - Convert PDF files to HTML files
BILL
No. 37-17
1
2
Sec. 1.
Section 11B-67 is amended as follows:
11B-67. Procedures
*
(
e)
3
4
5
*
*
A local small business is no longer eligible for a procurement under this
Article if the business has been awarded [$10 million] $25 million in the
aggregate in County contracts and at least 10 separate contracts, as either
a prime contractor or a subcontractor, beginning January 1, 2006. The
Director must provide written notice to the business when it is no longer
eligible.
6
7
8
9
10
Approved:
11
Roger Berliner, President, County Council
Date
12
Approved:
13
Isiah Leggett, County Executive
Date
14
This is a correct copy ofCouncil action.
15
Linda M. Lauer, Clerk of the Council
Date
f:\law\bills\1737 local small business reserve program\bill 1.docx
0
 PDF to HTML - Convert PDF files to HTML files
LEGISLATIVE REQUEST REPORT
Bill 37-17
Local Small Business Reserve Program
-
Eligibility
-
Amendments
DESCRIPTION:
The Bill would amend eligibility for the Local Small Business Reserve
Program by increasing the aggregate dollar amount of County
contracts awarded to a business before it is no longer eligible for a
procurement under the Program.
Some local small businesses have become ineligible for the Program
due to the dollar amount of County contracts awarded to them.
These amendments will increase the aggregate dollar amount of County
contract awards, so the Local Small Businesses can stay in the Program
longer.
County Executive, Procurement, Office of County Attorney
No fiscal impact
No economic impact
NIA
NIA
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMP ACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITIDN
MUNICIPALITIES:
PENALTIES:
Grace Denno, PRO
Richard Melnick, OCA
NIA
Not changed. A violation of the Program may constitute a material
breach of the contract. The County may exercise any available
remedy, including termination for default.
F:\LAW\BILLS\1737 Local Small Business Reserve Program\LRR.Docx
 PDF to HTML - Convert PDF files to HTML files
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·1
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f=:
OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE, MARYLAND 20850
I.
1:
I
'
!
I
Isiah Leggett ·
County Executive
:
MEMORANDUM
November 1, 2017
i
i
!
i
i
I
!
TO:
FROM:
SUBJECT:
Roger Berliner, President, County Council~
Isiah Leggett, County Executive
i
~
~ . , , __ __
Local Small Business Reserve Program Legislation Amendments
In accordance .with Section 313 of the County Charter and Section 11 B of the
Montgomery County Code,
I
am
forwarding the attached Local Small Business Reserve Program
Legislation amendments. The purpose of these amendments is to:
increase the dollar amount of County Contracts awarded, above which a
business is no longer eligible for a procurement under the Local Small
Business Reserve Program; and
generally amend the law regarding the Local Small Business Reserve
Program.
I recommend prompt passage of this legislation so the local businesses will
benefit from this amendment.
Attachments
Cc:
Bonnie Kirkland, Assistant Chief Administrative Officer
Cherri Branson, Director, Office of Procurement
Grace Denno, Office of Procurement
Michael Brown, Office of Procurement
montgomerycountymd.gov/311 11/0 iii1Hlli1/ 240-773-3556
TTY
!_MC
·'"31;1
/
 PDF to HTML - Convert PDF files to HTML files
..... · :I
, , .
::,-:.-_-.·:
.·.,.. ·. ·.·.-.: ..
·:_.:__·.··:·... i
.. .. ..
.. I
I . ·
;·.
Fiscal Impact Statement
Bill XX-XX
-
Local Small Business Reserve Program Amendments
I
I
!
·
1. Legislative Summary
The Bill amends the Local Small Business Reserve Program to increase the dollar
amount of County contracts awarded from $10 million to $25 million; above which a
business is no longer eligible for a procurement under the Program.
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.
No additional County revenues; or additional expenses, are expected to be generated or
incurred from the proposed legislative changes.
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 or group insurance costs.
Not applicable.
5. An estimate of expenditures related to County's information technology (IT)
systems, including Enterprise Resource Planning (ERP) systems.
No additional .Information Technology related expenses are required due to the proposed
legislative changes.
·
6. Later actions that may affect future revenue and expenditures
if
the bill authorizes
future spending.
The proposed legislation does not require or authorize additional future expenditures.
7.
An
estimate of the staff time needed to implement the bill.
No additional staff or personnel costs are needed.
8. An explanation of bow the addition of new staff responsibilities would affect other
duties.
Not applicable.
 PDF to HTML - Convert PDF files to HTML files
:· .. -l
,.-:-:·~~-~:..:· ..-~::..·,.··:· ...
·--·~:;..:.ft_,\
.-··..-.. ,.·.. ·,·j.
:i
,'
.
·:: -:·:-.:-.... :..
. ..
':
..
i
!
:!
9. An estimate of costs when an additional appropriation is needed.
Not applicable.
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 project.
Not applicable.
12. If
a bill
is
likely to have no f15cal impact, why that is the case.
See response #2.
13. Other fiscal impacts or comments.
This Bill is structured to help small businesses gain and retain fiscal strength for long
term success, which helps buttress County economic development.
14. The following contributed to and concurred with this analysis:
Grace Denno, Office of Procurement
Bryan Hunt, Office of Management and Budget
: I
I
.
'
i..
 PDF to HTML - Convert PDF files to HTML files
: ~:. .:. ~.
>..
.:
.
I
• ; ••.•
-~
:
·.
·-::-~-
.•.·.
I
1.
Economic Impact Statement
Blll ##-17, Local Small Business Reserve Program
-
Amendments
__
Bacgr.o.uncl:
.. ____ . _. _ .... _..
The
Bill .amends the
Local
Small Business Reserve Program
to:
.
.
..
.
(1) · incr~e
the
doll~ amount of County Contracts awarded, above which a business
··-··--is no longer eligible for a procurement under the Local Small Business Reserve
Program;
(2)
generally amend the law regarding the Local Small Business Resel've·Program.
1. The sources of information, assumptions, and methodologies used.
Source ofinformation is the Division of Business Relations and Compliance (DBRC),
Office of Procurement.
·
2. A description of any variable that could affect the economic impact estimates.
The only variable that could affect the economic impact
is
the number of vendors ·
who
cU1Tently
are
at or below
the $10
million threshold under the cuuent program.
and may exceed the current thresh.old and the number of vendors who
were
eliminated by exceeding the thl'eshold and eligible for reinstatement. However, data
on
the
number
ate
uncertain.
3.
_
The Bill's positive or negative effect,
if
any on employment, spending, saving,
investment, incomes, and property values in the County.
The Bill will enable more Local Small Business
to
stay in the program for
a
longer
period of time before they gqiduate from the program. Therefore, the legislation
.. .WPuldJUlYe a
positive economic impact by
maintaining
those vendors who would
exceed by expanding their cU1Tent business and exceed the current threshold of
$10
million. Secondly, the legislation would enable those vendors who
were
eliminated
from the program because they exceeded that threshold to
be
reinstated
into the -
program.
.
..
4. Ha
Bill
is likely to have
-.~
economic impact, why
is
that the case?
The positive economic impact cannot be estimated with any degree of specificity at
this
time.
·
5. The following contributed to or concurred with this analysis:
David Platt, Finance; Grace Denno, Division of Business Relations and Compliance,
Office of Procurement
mosa,
.
Department of Finance
tor
-cr(ulr1
-Date
 PDF to HTML - Convert PDF files to HTML files
Agenda Item 7
December 5, 2017
Public Hearing
MEMO RAND UM
December 1, 2017
TO:
County Council
FROM:
Robert
H. Drummer, Senior Legislative Attor ney~
\,
Public Hearing:
Bill 37-17, Local Small Business Reserve Program - Eligibility -
SUBJECT:
Amendments
Bill 37-17, Local Small Business Reserve Program - Eligibility - Amendments, sponsored by Lead
Sponsor Council President at the request of the County Executive, was introduced on November 14, 2017.
A Government Operations and Fiscal Policy Committee worksession will be scheduled at a later date.
Bill 37-17 would increase the aggregate dollar amount of County contracts awarded to a business
before the business is no longer eligible for a procurement under the Local Small Business Reserve
Program.
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
defined market in which small businesses could 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.
Under current law, a local small business is no longer eligible for a procurement under the LSBRP
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 the Program began on January 1, 2006. Bill
3 7-17 would increase the aggregate dollar amount of County contracts a local small business can receive
before "graduating" from the Program.
Since the Program began in 2006, there have been 2 companies that have "graduated."
In
May
2014, Colossal Contractors had received 16 County contracts with a cumulative dollar value of $10.1
million.
In
June 2017, Highway and Safety Services, Inc. had received 12 contracts with a cumulative
dollar value over $30 million. Bill 37-17 would reinstate Colossal Contractors back into the Program.
Highway and Safety Services, Inc. would remain ineligible for new contracts awarded under the LSBRP
Program.
This packet contains:
Bill 37-17
Legislative Request Report
Memo from County Executive
Fiscal and Economic Impact statement
F:\LAW\BILLS\1737 Local Small Business Reserve Program\PH Memo.Docx
Circle#
1
3
4
5
 PDF to HTML - Convert PDF files to HTML files
37-17
Bill No.
Business
Small
Concerning: Local
Reserve Program - Eligibility -
Amendments
Revised: November
3. 2017
Draft No.
_1
November
14. 2017
Introduced:
May
14, 2019
Expires:
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: _N=on ~e~--- ---
Ch. _ _ , Laws of Mont. Co. _ __
COUNT Y COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Council President at the request of the County Executive
AN ACT
to:
(1)
(2)
increase the aggregate dollar amount of County contracts awarded to a business before
the business is no longer eligible for a procurement under the Local Small Business
Reserve Program; and
generally amend the law governing the Local Small Business Reserve Program.
By amending
Montgomery County Code
Chapter l lB, Contracts and Procurement
Section
llB-67
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
*
* *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
 PDF to HTML - Convert PDF files to HTML files
BILL
No. 37-17
1
2
Sec. 1.
Section 11B-67 is amended as follows:
11B-67. Procedures
*
(
e)
3
4
5
*
*
A local small business is no longer eligible for a procurement under this
Article if the business has been awarded [$10 million] $25 million in the
aggregate in County contracts and at least 10 separate contracts, as either
a prime contractor or a subcontractor, beginning January 1, 2006. The
Director must provide written notice to the business when it is no longer
eligible.
6
7
8
9
10
Approved:
11
Roger Berliner, President, County Council
Date
12
Approved:
13
Isiah Leggett, County Executive
Date
14
This is a correct copy ofCouncil action.
15
Linda M. Lauer, Clerk of the Council
Date
f:\law\bills\1737 local small business reserve program\bill 1.docx
0
 PDF to HTML - Convert PDF files to HTML files
LEGISLATIVE REQUEST REPORT
Bill 37-17
Local Small Business Reserve Program
-
Eligibility
-
Amendments
DESCRIPTION:
The Bill would amend eligibility for the Local Small Business Reserve
Program by increasing the aggregate dollar amount of County
contracts awarded to a business before it is no longer eligible for a
procurement under the Program.
Some local small businesses have become ineligible for the Program
due to the dollar amount of County contracts awarded to them.
These amendments will increase the aggregate dollar amount of County
contract awards, so the Local Small Businesses can stay in the Program
longer.
County Executive, Procurement, Office of County Attorney
No fiscal impact
No economic impact
NIA
NIA
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMP ACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITIDN
MUNICIPALITIES:
PENALTIES:
Grace Denno, PRO
Richard Melnick, OCA
NIA
Not changed. A violation of the Program may constitute a material
breach of the contract. The County may exercise any available
remedy, including termination for default.
F:\LAW\BILLS\1737 Local Small Business Reserve Program\LRR.Docx
 PDF to HTML - Convert PDF files to HTML files
.·.:.•.;:::···e<,fi;';<,.
·1
,._., ...... ·; ·:· ..... ·".' •.'·' · .. :
J .... , .
__ .:,
·>:·:: ·.;.
·_c .. , ..
r-:~·-·_:-_·_
. .:c.c:.·.--:
··:::J
,
!.
f=:
OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE, MARYLAND 20850
I.
1:
I
'
!
I
Isiah Leggett ·
County Executive
:
MEMORANDUM
November 1, 2017
i
i
!
i
i
I
!
TO:
FROM:
SUBJECT:
Roger Berliner, President, County Council~
Isiah Leggett, County Executive
i
~
~ . , , __ __
Local Small Business Reserve Program Legislation Amendments
In accordance .with Section 313 of the County Charter and Section 11 B of the
Montgomery County Code,
I
am
forwarding the attached Local Small Business Reserve Program
Legislation amendments. The purpose of these amendments is to:
increase the dollar amount of County Contracts awarded, above which a
business is no longer eligible for a procurement under the Local Small
Business Reserve Program; and
generally amend the law regarding the Local Small Business Reserve
Program.
I recommend prompt passage of this legislation so the local businesses will
benefit from this amendment.
Attachments
Cc:
Bonnie Kirkland, Assistant Chief Administrative Officer
Cherri Branson, Director, Office of Procurement
Grace Denno, Office of Procurement
Michael Brown, Office of Procurement
montgomerycountymd.gov/311 11/0 iii1Hlli1/ 240-773-3556
TTY
!_MC
·'"31;1
/
 PDF to HTML - Convert PDF files to HTML files
..... · :I
, , .
::,-:.-_-.·:
.·.,.. ·. ·.·.-.: ..
·:_.:__·.··:·... i
.. .. ..
.. I
I . ·
;·.
Fiscal Impact Statement
Bill XX-XX
-
Local Small Business Reserve Program Amendments
I
I
!
·
1. Legislative Summary
The Bill amends the Local Small Business Reserve Program to increase the dollar
amount of County contracts awarded from $10 million to $25 million; above which a
business is no longer eligible for a procurement under the Program.
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.
No additional County revenues; or additional expenses, are expected to be generated or
incurred from the proposed legislative changes.
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 or group insurance costs.
Not applicable.
5. An estimate of expenditures related to County's information technology (IT)
systems, including Enterprise Resource Planning (ERP) systems.
No additional .Information Technology related expenses are required due to the proposed
legislative changes.
·
6. Later actions that may affect future revenue and expenditures
if
the bill authorizes
future spending.
The proposed legislation does not require or authorize additional future expenditures.
7.
An
estimate of the staff time needed to implement the bill.
No additional staff or personnel costs are needed.
8. An explanation of bow the addition of new staff responsibilities would affect other
duties.
Not applicable.
 PDF to HTML - Convert PDF files to HTML files
:· .. -l
,.-:-:·~~-~:..:· ..-~::..·,.··:· ...
·--·~:;..:.ft_,\
.-··..-.. ,.·.. ·,·j.
:i
,'
.
·:: -:·:-.:-.... :..
. ..
':
..
i
!
:!
9. An estimate of costs when an additional appropriation is needed.
Not applicable.
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 project.
Not applicable.
12. If
a bill
is
likely to have no f15cal impact, why that is the case.
See response #2.
13. Other fiscal impacts or comments.
This Bill is structured to help small businesses gain and retain fiscal strength for long
term success, which helps buttress County economic development.
14. The following contributed to and concurred with this analysis:
Grace Denno, Office of Procurement
Bryan Hunt, Office of Management and Budget
: I
I
.
'
i..
 PDF to HTML - Convert PDF files to HTML files
: ~:. .:. ~.
>..
.:
.
I
• ; ••.•
-~
:
·.
·-::-~-
.•.·.
I
1.
Economic Impact Statement
Blll ##-17, Local Small Business Reserve Program
-
Amendments
__
Bacgr.o.uncl:
.. ____ . _. _ .... _..
The
Bill .amends the
Local
Small Business Reserve Program
to:
.
.
..
.
(1) · incr~e
the
doll~ amount of County Contracts awarded, above which a business
··-··--is no longer eligible for a procurement under the Local Small Business Reserve
Program;
(2)
generally amend the law regarding the Local Small Business Resel've·Program.
1. The sources of information, assumptions, and methodologies used.
Source ofinformation is the Division of Business Relations and Compliance (DBRC),
Office of Procurement.
·
2. A description of any variable that could affect the economic impact estimates.
The only variable that could affect the economic impact
is
the number of vendors ·
who
cU1Tently
are
at or below
the $10
million threshold under the cuuent program.
and may exceed the current thresh.old and the number of vendors who
were
eliminated by exceeding the thl'eshold and eligible for reinstatement. However, data
on
the
number
ate
uncertain.
3.
_
The Bill's positive or negative effect,
if
any on employment, spending, saving,
investment, incomes, and property values in the County.
The Bill will enable more Local Small Business
to
stay in the program for
a
longer
period of time before they gqiduate from the program. Therefore, the legislation
.. .WPuldJUlYe a
positive economic impact by
maintaining
those vendors who would
exceed by expanding their cU1Tent business and exceed the current threshold of
$10
million. Secondly, the legislation would enable those vendors who
were
eliminated
from the program because they exceeded that threshold to
be
reinstated
into the -
program.
.
..
4. Ha
Bill
is likely to have
-.~
economic impact, why
is
that the case?
The positive economic impact cannot be estimated with any degree of specificity at
this
time.
·
5. The following contributed to or concurred with this analysis:
David Platt, Finance; Grace Denno, Division of Business Relations and Compliance,
Office of Procurement
mosa,
.
Department of Finance
tor
-cr(ulr1
-Date