Maryland panelists back sweeping Procurement Reform Act that raises small‑contract threshold, adds diversity plans and faster payments

The Maryland Department of General Services and allied state officials urged the House Health and Government Operations Committee to give House Bill 500 — the Procurement Reform Act of 2025 — a favorable report, saying the package would streamline state contracting and expand opportunities for small, minority and veteran‑owned firms.

The bill would raise the state’s small business reserve threshold from $500,000 to $1 million and eliminate a previous $50,000 floor; require oral presentations in some high‑value procurements; allow procurement officers to approve certain contract modifications under the small procurement threshold; and authorize the chief procurement officer (CPO) to establish source‑selection methods and approve expedited procurements. It would also centralize several socio‑economic procurement programs under the governor’s Office of Small, Minority, and Women Business Affairs (GASPA), require workforce‑diversity plans for contracts over $500,000 and supplier‑diversity plans for contracts over $250,000, and create a veteran‑owned small business reserve program for specified agencies.

Atif Chaudhry, secretary of the Department of General Services, told the committee HB500 is “dense and very technical” but said the measure was the product of extensive stakeholder engagement and includes negotiated amendments agreed with parties including the comptroller’s and treasurer’s offices. Wallace Sermons II, Maryland’s chief procurement officer, described outreach with more than 130 socioeconomic advocacy groups, dozens of state entities and other partners while developing the proposal and said the changes would broaden participation and improve efficiency across the procurement lifecycle.

Labor Secretary Portia Wu told the committee the bill’s workforce provisions aim to connect more young Marylanders to career pathways—including expanding apprenticeship and internship connections to state contracting—and that labor standards language had been pulled for further work following stakeholder consultations. Supporters said the bill would also require payments under the small business reserve program to be made within 15 days of invoice approval, instead of the current 30‑day target, to reduce small firms’ reliance on credit.

Several business and advocacy witnesses told the committee they supported HB500. Testimony from small‑business owners and trade groups emphasized quicker payments, clearer rules on minor proposal irregularities, expanded small‑business participation and workforce training opportunities. The Maryland Black Caucus Foundation, Maryland NAACP and multiple business associations urged the committee to back the bill as a step to increase access to state contracts and boost local job opportunities.

Committee members pressed DGS and other administration witnesses on details. Delegate Erek Barron and others asked the administration to provide the draft amendments and the fiscal note. Several legislators — among them delegates who represent large jurisdictions and members with procurement oversight interests — asked whether HB500 would shift authority away from the Board of Public Works (BPW) or impede the treasurer’s or comptroller’s ability to provide oversight. DGS witnesses said many current authorities would remain with BPW, and that some changes would codify existing delegations (for example, certain cancellations and expedited procurement procedures) while aiming to avoid delays that undercut the purpose of “urgent” procurements.

Treasurer Derek Davis and the Comptroller’s representative Jasmine Clemons testified in writing and in person with recommended amendments restoring or clarifying Board of Public Works authorities on expedited procurements, contract modification thresholds and source‑selection approvals. The administration told the committee it is negotiating with the treasurer’s office on several outstanding points and has placed a packet of agreed amendments in the committee materials.

Several legislators raised the bill’s fiscal note; the chair asked staff and witnesses to follow up with the committee’s counsel and fiscal analysts and to continue working with the treasurer’s and comptroller’s offices. DGS said it would provide the committee with the proposed amendments and work with agency attorneys and the Office of the Attorney General before the bill leaves committee.

Supporters said HB500 is intended to adopt best practices from other states and the federal government, reduce administrative bottlenecks for requisitioning state goods and services, permit timely contract modifications for small procurements and create greater transparency and centralized support for supplier‑diversity and workforce requirements. Opponents or skeptics in written and oral testimony generally urged clarifying the board approval steps and ensuring safeguards that elected fiscal overseers retain necessary visibility into high‑value or expedited procurements.

For now HB500 remains a bill for subcommittee consideration; sponsors and administration witnesses told members they are available to provide additional technical responses and amended language to the committee and will continue negotiations with the treasurer and comptroller staff.