Maryland officials pitch broad Procurement Reform Act to speed contracting, boost small and veteran firms

Annapolis — Officials from the Maryland Department of General Services and allied state agencies on Tuesday urged the House Health and Government Operations Committee to give a favorable report to House Bill 500, the Procurement Reform Act of 2025, a broad package intended to streamline state purchasing, expand small-business preferences and speed payments to vendors.

Secretary Atif Chaudhry of the Department of General Services asked the committee to back the measure. “I am here today, to humbly request your support for Governor Moore’s legislative proposal, which is the Procurement Reform Act of 2025,” Chaudhry said. He described the bill as a “dense and very technical as well as comprehensive” effort to increase transparency, inclusion and efficiency across state procurement.

The bill would raise the threshold for the small business reserve program from $500,000 to $1 million, eliminate the $50,000 floor that previously limited participation, and create a new veteran-owned small business reserve with a 3% state goal for veteran-owned suppliers. It would also require oral presentations for high-value procurements, allow procurement officers to approve certain contract modifications under small-purchase thresholds and authorize the chief procurement officer to approve expedited procurements in urgent—but not emergency—cases.

Wallace Sermons II, Maryland’s chief procurement officer, told the committee the reforms reflect consulting with hundreds of stakeholders and would increase opportunities for small, minority and veteran-owned firms while improving administrative flexibility. “This legislation reflects the diverse needs and collective vision of our entire state, building a system that works for all,” Sermons said.

Portia Wu, secretary of the Maryland Department of Labor, described provisions that connect contractor performance to workforce development, including requirements that larger contracts include registered apprenticeship or internship opportunities. “To leverage procurement to create new on the job training opportunities by requiring contractors to participate in registered apprenticeship or internship programs,” Wu said, “will help our state create more quality jobs and grow the middle class.”

Committee members pressed agency officials on several points: a fiscal note that flagged potential short‑term cost increases, how the bill would change the Board of Public Works’ current role, and whether proposed labor provisions require further work. Treasurer Derek Davis and a representative for the Comptroller signaled they support the goal of reform but seek amendments to preserve key Board of Public Works approvals, restore a $50,000 modification threshold and require Board sign‑off when agencies cancel solicitations.

The sponsors and agency staff said they have negotiated multiple technical amendments and continue to work with the Treasurer’s and Comptroller’s offices. Chaudhry said some authorities being clarified in the bill already exist in practice and that the measure largely codifies or modernizes established procurement practices.

Committee members asked for written copies of the negotiated amendments and for agencies to keep working with the Board of Public Works and fiscal staff on the bill’s details. The sponsor asked for a favorable report and officials said the measure will go to subcommittee for further review.

Why it matters: Maryland spends billions a year on goods, construction and services. Backers said HB 500 is designed to expand opportunities for smaller and socioeconomically disadvantaged firms, tighten supplier diversity reporting and reduce long payment cycles that press small businesses’ cash flows. Opponents and oversight offices warned that changes to who approves expedited procurements and contract modifications need careful guardrails to preserve transparency and legislative oversight.

What’s next: Sponsors and agency staff said they are circulating a set of technical amendments they negotiated with stakeholders; the committee recorded requests for further work with the Treasurer’s and Comptroller’s offices before final floor action.

Sources: Testimony and questions on the record from Atif Chaudhry, secretary, Department of General Services; Wallace Sermons II, chief procurement officer; Portia Wu, secretary, Department of Labor; Treasurer Derek Davis; and a staff representative for the Comptroller.