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Contract Compliance Procedures

All potential contractors, subcontractors, suppliers, vendors, and consultants doing business with the Department of General Services must comply with the State of Maryland's MBE law. Compliance with applicable laws is monitored by the MBE Administrator, and DGS on-site inspector.

Contract Monitoring

The Department is responsible for conducting administrative contract compliance and on-site investigations, to confirm compliance with the terms of this section.

The MBE Administrator has the authority to conduct on-site compliance meetings and on-site inspection at any time without prior notification. When conducting a formal on-site contract compliance investigation, the MBE Administrator will provide written notification to the contractor/vendor of a pending compliance review at least fourteen (14) days prior to the formal compliance review. This notification will inform the contractor of the date, time and location of the review. The contractor will have the following available for inspection:

  • Copies of purchase orders and subcontracts (all must contain Equal Opportunity clauses);
  • Records of MBE subcontractors contract agreement, indicating the project number, names, dollar values, dates, and the scheduled times for each certified business to be on the job site;
  • Any other appropriate documents requested prior to the actual on-site visit.

If the Department determines that the contractor or subcontractors are not in compliance with this section, except as provided in (1) below the Department will notify the contractor of those measures which the contractor must take to restore the contractor to a state of compliance and the time within which these measures must be taken. If the contractor or subcontractor fails to take corrective action, within the time required, the Department may report the noncompliance to the Board of Public Works for appropriate action and may take any and all other action permitted by law or the contract.

  • When in the judgment of DGS circumstances warrant such action, DGS may, without notice to the contractor and without giving the contractor any opportunity to cure, take action to enforce the contractor's obligations under the contract respecting MBE participation.

The MBE Administrator has the authority to conduct an administrative contract compliance review without prior notification. The administrative compliance review will ensure that MBE participation was utilized on the contract as proposed in the approved Schedule of Participation. The prime contractor will be required to submit documentation as described in B(1) of this section and to complete the following forms:

  • (Form DGS-MBE-06F) - Minority Business Enterprise Monthly Cost Breakdown for Progress Payments. Shall be submitted monthly for each minority subcontractor listed or used. The contractor shall also submit copies of each invoice submitted by the MBEs for work completed. To assure that the MBE participation goal is being met, the general contractor’s retainage (for any projects over $50,000) may be held until the completion of the project and until proof is provided that the agreed MBE participation percentage is paid as agreed to MBEs described in the Subcontractor Project Participation Statement Form (Form DGS-MBE-05E).
  • (Form DGS-MBE-07G) - Contract Compliance Certification. This information should be completed, certified and submitted monthly to the MBE Liaison Officer. The certified documents will be made part of the contract file and will be subject to confirmation audits by the State. In addition, the contractor shall submit:
    • The proposed timetable for performance and completion;
    • The prices agreed to be paid to each MBE for the work/service;
    • The percentage of work/service completed to date; and,
    • The total dollar amount spent at completion of work/service.

    If during the confirmation audit the information given is found to be untrue, the signatories to the certifications will be subject to terminiation of the contract for default, referral to the Office of the Attorney General or other authorities for appropriate action, or any and all other actions permitted by law.

  • (Form DGS-MBE-13K) The prime contractor is required to complete this form for any unpaid MBE invoice to their MBE subcontractors listed in the MBE Participation Schedule (Form DGS-MBE-03C). Failure to submit the requested documentation by the assigned due date may adversely affect the right of the contractor or any subcontractor to participate in any future contracts awarded by the Department and withholding of future progress payments to the prime contractor.
  • (Form DGS-MBE-14L) As a part of MBE contract compliance, the certified MBE subcontractor is required to complete this payment verification form acknowledging all payments received or not received within 30 days.

If the documentary material submitted by the contractor or subcontractor to determine MBE status contains false, misleading information or other misrepresentations, the Department may refer the matter to the Attorney General or other authorities for appropriate action and may take any and all other action permitted by law or the contract.

DGS may request any and all other documents and information and may take any and all other actions permitted or required by Title 14, Subtitle 3 of the State Finance and Procurement Article and by COMAR 21.11.03 to enforce and ensure compliance with the law and the contract.

If for any reason a minority subcontractor is not performing in accordance with its contract, the prime contractor may request permission to remove or substitute that particular MBE. The prime contractor must first notify the inspector for that project of the prime contractor's intent to remove an MBE subcontractor during the course of the MBE's contract. Supporting information must be furnished by the prime contractor stating reasons why the MBE subcontractor should be removed to the MBE Office. It will be the responsibility of the MBE Office, with any recommendations from the Office of Facilities Planning, Engineering & Construction Division, to determine if the MBE subcontractor may be removed the from the project.

The bidder, by submitting a bid or offer, agrees: (1) to provide documentation as requested by the Department pursuant to COMAR 21.11.03.13; (2) to provide the State's representatives the right of entry onto the project site at any reasonable time for purposes of verifying compliance with the MBE subcontractor requirements, and to (3) comply in all respects with Title 14, Subtitle 3 of the State Finance and Procurement Article of the Annotated Code of Maryland and COMAR 21.11.03.

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