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The Small Business Reserve Program requires state agencies to reserve 10 percent of its contracting dollars for bid solely by small businesses. For the first time, small businesses will be able to bid for state contracts without competing with larger, more established businesses. Frequently Asked Questions
What is the Small Business Reserve Program? A law was passed October 1, 2004 establishing the Small Business Reserve Program, and it requires that twenty-four designated state agencies structure their procurement processes so that at least 10 percent of their total procurement dollars are spent with qualified small businesses. An unofficial copy of the legislation is available on the Maryland General Assembly website at http://mlis.state.md.us . Scroll down the page and type SB 904 in the Bill Number box and click the Submit Query button. Which twenty-four (24) State agencies are required to reserve ten (10) percent of their total procurement dollars for qualified small businesses? These State agencies have to abide by the Small Business Reserve Program: • The State Treasurer; • The Department of Budget and Management; • The Department of Business and Economic Development; • The Department of Environment; • The Department of General Services; • The Department of Health and Mental Hygiene; • The Department of Housing and Community Development; • The Department of Human Resources; • The Department of Information Technology; • The Department of Juvenile Services; • The Department of Labor, Licensing, and Regulation; • The Department of Natural Resources; • The State Department of Education; • The Department of State Police; • The Department of Public Safety and Correctional Services; • The Department of Transportation; • The University System of Maryland ; • The Maryland Port Commission; • The State Retirement Agency; • The Maryland Insurance Administration; • The Maryland Stadium Authority; • The Maryland Transportation Authority; • The State Lottery Agency; and • Morgan State University . The websites for these 24 agencies can be accessed through www.maryland.gov using the Agency Index drop down list. What is a small business in the State of Maryland ? A small business is a business, other than a broker, that meets the following criteria: • The business is independently owned and operated; • The business is not a subsidiary of another business; • The business is not dominant in its field of operation; • The wholesale operations of the business did not employ more than 50 persons, and the gross sales of the business did not exceed an average of $4,000,000 in its more recently completed 3 fiscal years;* • The retail operations of the business did not employ more than 25 persons, and the gross sales of the business did not exceed an average of $3,000,000 in its most recently completed 3 fiscal years;* • The manufacturing operations of the business did not employ more than 100 persons, and the gross sales of the business did not exceed an average of $2,000,000 in its most recently completed 3 fiscal years;* • The service operations of the business did not employ more than 100 persons, and the gross sales of the business did not exceed an average of $10,000,000 in its more recently completed 3 fiscal years;* and • The construction operations of the business did not employ more than 50 persons, and the gross sales of the business did not exceed an average of $7,000,000 in its most recently completed 3 fiscal years.* • The architectural and engineering operations of the business did not employ more than 100 persons, and the gross sales of the business did not exceed an average of $4,500,000 in its most recently completed 3 fiscal years*. * If a business has not existed for three years, the gross sales average is computed for the period of the business's existence. For newly formed businesses the determination will be based upon employment levels and projected gross sales. What if a business operates in more than one of the six general business classifications? If a business operates in more than one of the following business classifications: wholesale, retail, manufacturing, service, construction, and architecture/engineering, its combined operation must meet the limitation of the more liberal classifications. However, the employment limit for a retail operation is 25 persons, versus 50 for a wholesale operation and 100 for a manufacturing operation. Accordingly, a business with both retail and wholesale classifications can have up to 50 employees, while a combined manufacturing and wholesale business can have up to 100 employees. How are the gross sales and employment level calculated? Gross Sales: For a business that has been in operation long enough to file a Federal income tax statement, the annual average Gross Sales of the business will be calculated from the sales amounts contained on the tax form(s). Employment: Employment will be calculated on an employee "Full-Time Equivalent" (FTE) basis. All full time, part time, temporary or contractual employees, including employees of temporary help firms or subcontractors working for the business, will be counted against the applicable employment limitation. The specific FTE employment levels for a business at the end of each calendar quarter (March 31 st , June 30 th , September 30 th and December 31 st ) will be averaged to determine a business most recent FTE employment level. How do I apply to be qualified as a small business? The Maryland Department of General Services (DGS) has established an online self-certification process that began on September 15, 2004 . How often must a business get qualified as a small business? A business needs to reapply for qualification every year by the anniversary date of the initial certification. Verification of businesses' gross sales and employment data will occur annually. However, if a business ceases to be independently owned and operated or becomes a subsidiary of another business, the business needs to notify the Department of General Services immediately via email at sbadmin@dgs.state.md.us or in writing to State of Maryland , Department of General Services, Small Business Reserve Program, 301 West Preston Street , Room M-3, Baltimore , Maryland 21201 . How do I update my small business profile? A business can change its basic information, i.e. address and contact name, online. However, a change to information that may alter whether or not a business remains on the list of qualified small businesses must be requested in writing to State of Maryland , Department of General Services, Small Business Reserve Program, 301 West Preston Street , Room M-3, Baltimore , Maryland 21201 or via e-mail at sbadmin@dgs.state.md.us . Will my company receive a Small Business Qualification Number? Yes. Once a business completes the registration process a Small Business Qualification Number will be assigned. What are the benefits of participating in the Small Business Reserve Program? The overall goal is to increase economic opportunities for small businesses. Only qualified small business may participate in a Small Business Reserve Program procurement. Once a solicitation has been designated for a small business reserve, only bids or proposals from qualified small business will be accepted. Therefore, a business will be in competition only with other qualified small business, guaranteeing that the contract will be awarded to a qualified small business. Where can I find procurement opportunities? To receive email notifications of procurement opportunities in your area of expertise you must register on eMaryland Marketplace at www.emarylandmarketplace.com, Maryland's web-based procurement system. For registration assistance contact 410-767-1492. How will a business know if a solicitation is selected for a small business reserve? The solicitation will clearly state
that a small business reserve applies. To bid on State projects You must belong to eMaryland Marketplace. To register for, and to view solicitations on eMaryland Marketplace visit: www.emarylandmarketplace.com. Can a nonprofit organization qualify as a small business? No, only for-profit businesses can apply to be qualified as a small business. Is a small business the same as a minority business? No, but a business can be both if it has been qualified as a small business and has been certified by the Maryland Department of Transportation's (MDOT) Minority Business Enterprise Program as a minority business. For more information about the Minority Business Enterprise Program visit: http://www.mdot.state.md.us/MBE_Program/index.html.
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