Legal Fees for State Protests and Claims May Be Recoverable

General Administration and Oversight Senate Bill 667/House Bill 292 (both passed) authorize the Maryland State Board of Contract Appeals (Appeals Board) to award reasonable attorney’s fees to an “interested party” who prevails in appealing a bid protest and alter the conditions under which the Appeals Board may award attorney’s fees for a contract claim.” An “interested party” means an actual or prospective bidder, offeror, or contractor that may be aggrieved by the solicitation or award of a contract, or by a protest. For all contract claims (instead of just claims related to construction contracts), the Appeals Board may award the reasonable costs of filing and pursuing a claim, including reasonable attorney’s fees, if the board finds that the conduct of the unit in processing the claim is in bad faith, without substantial justification, or in violation of the law. State procurement law identifies multiple procurement methods available to State procurement officials depending on the nature and circumstances of the procurement.

Quicker Payments

Generally, undisputed amounts must be paid by contractors (or subcontractors to lower tier subcontractors) within 10 days of receiving a progress or final payment from the State. State law includes procedures for resolving disputes between subcontractors and contractors regarding a contractor’s or subcontractor’s failure to promptly pay undisputed amounts. Senate Bill 183/House Bill 342 (Chs. 30 and 31) add “suppliers” to this payment and dispute resolution framework in the same manner as for contractor payments to subcontractors. A “supplier” is defined as a person that has supplied labor or materials to a contractor in the prosecution of work provided for in a State procurement contract.

Greater Opportunities for Contractors

Procurement Preferences Under the Small Business Preference (SBP) Program have been expanded to all Executive Branch units and agencies (except USM and MSU). Under this program, a qualified small business may receive up to a 5% price preference, a veteran-owned small business may receive up to a 7% price preference, and a disabled veteran-owned small business may receive up to an 8% price preference on any contract that is designated as eligible under the program.

The Small Business Reserve (SBR) Program requires most State agencies to structure their procurements so that at least 15% of the total dollar value of their procurements is made directly to small businesses provided the agency designated it as an SBR procurement (not all payments to small businesses). Each agency must prepare an annual forecast of its total procurement spending and develop a plan to allocate at least 15% of its forecasted spending to contracts for small businesses serving as prime contractors. Senate Bill 673/House Bill 962 (both passed) raise the goal, from 15% to 20%, for the percentage of the total dollar value of contract awards made to small businesses under the SBR Program, and allow all contract awards made to small businesses to count toward achievement of the goal, not just those designated as SBR contracts.

New Procurement Methodology for IT Solutions

Senate Bill 818 (passed) authorizes "proof-of-concept” procurements as a formal competitive procurement method used to solicit proposals for the conduct of a proof of concept prior to full implementation when the head of a unit determines the process to be appropriate and in the best interests of the unit. “Proof of concept” means a test, evaluation, or pilot project of a good, service, or technology in a real-world environment to evaluate whether the good, service, or technology can be successfully deployed and is beneficial to the State. A competitive proof-of-concept procurement may then be conducted through the issuance of a solicitation by any method of procurement authorized in State procurement law.

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