1. A. General. When a certified MBE participates in a contract, the procurement agency shall consider §§B, C, D, and E of this regulation in determining whether and the extent to which the certified MBE’s participation may be counted toward the MBE participation goals.

2. B. Commercially Useful Function. A procurement agency may count participation of a certified MBE contractor toward MBE goals only if the certified MBE is performing a commercially useful function on that contract.

   1. (1) Commercially Useful Function.

      1. (a) A certified MBE performs a commercially useful function when it is responsible:

         1. (i) For execution of the work of the contract and is carrying out its responsibilities by actually performing, managing, and supervising the work involved; and
         2. (ii) With respect to materials and supplies used on the contract, for negotiating price, determining quality and quantity, ordering the material, and installing (where applicable) and paying for the material itself.

      2. (b) To determine whether a certified MBE is performing a commercially useful function, the procurement agency shall evaluate:

         1. (i) The amount of work subcontracted;
         2. (ii) Industry practices;
         3. (iii) Whether the amount the certified MBE is to be paid under the contract is commensurate with the work it is actually performing; and
         4. (iv) Other relevant factors.
   2. (2) A certified MBE does not perform a commercially useful function if its role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of MBE participation. In deciding whether a certified MBE is such an extra participant, the procurement agency may examine similar transactions, particularly those in which MBEs do not participate.
   3. (3) A certified MBE is presumed not to perform a commercially useful function if it does not perform or exercise responsibility for at least 30 percent of the total dollar value of its contract with its own work force, or the certified MBE subcontracts a greater portion of the work of a contract than would be expected on the basis of industry practice for the type of work involved. A procurement agency may, however, upon evaluation of the work involved and industry practices, decide that the certified MBE is performing a commercially useful function.
3. C. Joint Venture. When a certified MBE performs as a participant in a joint venture, a procurement agency may count, subject to §D of this regulation, a portion of the total dollar value of the contract equal to the distinct, clearly defined portion of the work of the contract that the certified MBE performs with its own forces toward fulfilling the contract goal and not more than one of the contract subgoals, if any.

4. D. Counting Participation of Certified MBE Prime.

   1. (1) This section shall apply to contracts that are solicited and awarded on or after June 9, 2014.

   2. (2) Subject to the requirements of §B of this regulation and Regulation .09C of this chapter, when a certified MBE participates as a prime contractor on a contract, a procurement agency may count the distinct, clearly defined portion of the work of the contract that the certified MBE performs with its own forces toward fulfilling up to 50 percent of the MBE participation goal and up to 100 percent of not more than one of the MBE participation subgoals, if any, established for the contract, provided that the certified MBE prime contractor is:

      1. (a) Identified on the MBE participation schedule pursuant to Regulation .09C(3)(b) of this chapter, including the certification category under which the MBE prime is self-performing and the percentage of the contract value attributed to that work; and
      2. (b) Certified by the certification agency to provide the services, materials, or supplies that it has committed itself to self-perform on the MBE participation schedule.

5. E. Counting Value of Supplies and Equipment.

   1. (1) For purposes of this section, “regular dealer” means:

      1. (a) A firm that owns, operates, or maintains a store, a warehouse, or any other establishment in which the materials, supplies, articles, or equipment are of the general character described by the specifications required under the contract and are bought, kept in stock, or regularly sold or leased to the public in the usual course of business; and
      2. (b) Does not include a packager, a broker, a manufacturer’s representative, or any other person that arranges or expedites transactions.
   2. (2) If the certified MBE is a regular dealer, then a procurement unit may apply only 60 percent of the costs of the materials and supplies provided by the regular dealer toward the MBE participation goal.

   3. (3) If the certified MBE is neither a regular dealer nor a manufacturer, a procurement unit:

      1. (a) May not count any portion of the costs of the materials and supplies toward the MBE participation goal; and

      2. (b) May count the entire amount of the fees or commissions charged for assistance in procuring materials and supplies, fees, or transportation charges for delivering the materials and supplies required on a procurement toward the MBE participation goal if the procurement unit determines the fees:

         1. (i) Are reasonable; and
         2. (ii) Not excessive as compared with fees customarily allowed for similar services.
6. F. Counting Participation of a Certified Business Owned by a Woman of an Ethnic or Racial Group. A certified MBE may be counted as a woman-owned business, a business owned by a member of an ethnic group or racial group, or both, if the business has been certified in both categories.

Authority: State Finance and Procurement Article, §§12-101 and 14-301—14-308, Annotated Code of Maryland;

Effective date: June 4, 1984 (11:11 Md. R. 965)

Chapter revised effective January 9, 1989 (15:27 Md. R. 3138)

Regulation .03B amended effective September 2, 1991 (18:17 Md. R. 1922); July 20, 1992 (19:14 Md. R. 1286)

Regulation .04E amended effective September 2, 1991 (18:17 Md. R. 1922)

Regulation .06 amended effective September 2, 1991 (18:17 Md. R. 1922)

Regulation .10A, B amended effective September 2, 1991 (18:17 Md. R. 1922)

Regulation .15 amended effective September 2, 1991 (18:17 Md. R. 1922)

Regulation .16 repealed and new Regulation .16 adopted effective September 2, 1991 (18:17 Md. R. 1922)

Regulation .17 amended effective September 2, 1991 (18:17 Md. R. 1922)

Regulation .17A amended effective January 2, 1995 (21:26 Md. R. 2192)

Chapter revised effective May 20, 1996 (23:10 Md. R. 733)

Regulation .01B amended effective January 22, 2001 (28:1 Md. R. 27)

Regulation .04C amended effective March 8, 1999 (26:5 Md. R. 393)

Regulation .15B amended effective May 1, 2000 (27:8 Md. R. 799)

Chapter revised effective March 18, 2002 (29:5 Md. R. 505)

Regulation .11E—G adopted effective May 24, 2004 (31:10 Md. R. 796)

Regulation .17 amended effective May 24, 2004 (31:10 Md. R. 796)

Chapter revised effective April 11, 2005 (32:7 Md. R. 685)

Regulation .01 amended effective July 26, 2010 (37:15 Md. R. 1000); December 12, 2011 (38:25 Md. R. 1582); May 13, 2013 (40:9 Md. R. 789); August 19, 2013 (40:16 Md. R. 1345)

Regulation .01D adopted effective February 7, 2011 (38:3 Md. R. 152)

Regulation .02C amended effective May 13, 2013 (40:9 Md. R. 789)

Regulation .03B amended effective November 7, 2005 (32:22 Md. R. 1759); January 14, 2010 (37:1 Md. R. 16); May 13, 2013 (40:9 Md. R. 789); September 18, 2023 (50:18 Md. R. 800); March 3, 2025 (52:4 Md. R. 221)

Regulation .04 amended effective June 29, 2020 (47:13 Md. R. 643)

Regulation .04C amended effective January 14, 2010 (37:1 Md. R. 16)

Regulation .04E amended effective May 13, 2013 (40:9 Md. R. 789)

Regulation .06 amended effective January 14, 2010 (37:1 Md. R. 16)

Regulation .06B, D amended effective April 7, 2008 (35:7 Md. R. 751)

Regulation .07A amended effective July 26, 2010 (37:15 Md. R. 1000)

Regulation .07E amended effective May 13, 2013 (40:9 Md. R. 789)

Regulation .08 amended effective November 7, 2005 (32:22 Md. R. 1759); April 7, 2008 (35:7 Md. R. 751); December 12, 2011 (38:25 Md. R. 1582)

Regulation .09 amended effective December 12, 2011 (38:25 Md. R. 1582); May 13, 2013 (40:9 Md. R. 789)

Regulation .09A amended effective July 26, 2010 (37:15 Md. R. 1000); August 19, 2013 (40:16 Md. R. 1345); January 2, 2017 (43:26 Md. R. 1449)

Regulation .09B amended effective June 29, 2020 (47:13 Md. R. 643)

Regulation .09C amended effective April 7, 2008 (35:7 Md. R. 751); January 14, 2010 (37:1 Md. R. 16); May 31, 2010 (37:11 Md. R. 766); July 15, 2019 (46:14 Md. R. 623); September 18, 2023 (50:18 Md. R. 800)

Regulation .09E amended effective April 7, 2008 (35:7 Md. R. 751)

Regulation .10 amended effective May 13, 2013 (40:9 Md. R. 789)

Regulation .10A amended effective May 2, 2022 (49:9 Md. R. 531)

Regulation .10B amended effective April 7, 2008 (35:7 Md. R. 751); March 11, 2019 (46:5 Md. R. 310)

Regulation .10B, C amended effective December 25, 2023 (50:25 Md. R. 1090)

Regulation .10B, E amended effective July 15, 2019 (46:14 Md. R. 623)

Regulation .11A amended effective July 15, 2019 (46:14 Md. R. 623)

Regulation .11E amended effective April 7, 2008 (35:7 Md. R. 751)

Regulation .12 amended effective April 7, 2008 (35:7 Md. R. 751); December 12, 2011 (38:25 Md. R. 1582)

Regulation .12A, E amended effective March 11, 2019 (46:5 Md. R. 310)

Regulation .12C, E amended effective May 13, 2013 (40:9 Md. R. 789)

Regulation .12-1 adopted effective December 12, 2011 (38:25 Md. R. 1582)

Regulation .12-1A amended effective March 11, 2019 (46:5 Md. R. 310)

Regulation .12-1C, D amended effective June 9, 2014 (41:11 Md. R. 605)

Regulation .12-1E adopted effective March 11, 2019 (46:5 Md. R. 310)

Regulation .12-1F adopted effective May 2, 2022 (49:9 Md. R. 531)

Regulation .12-1F amended effective September 5, 2022 (49:18 Md. R. 819)

Regulation .13 amended effective May 13, 2013 (40:9 Md. R. 789)

Regulation .13A amended effective April 7, 2008 (35:7 Md. R. 751)

Regulation .14 repealed effective December 12, 2011 (38:25 Md. R. 1582)

Regulation .15 amended effective April 7, 2008 (35:7 Md. R. 751)

Regulation .15B amended effective May 22, 2006 (33:10 Md. R. 882); April 7, 2008 (35:7 Md. R. 751)

Regulation .15D adopted effective June 29, 2020 (47:13 Md. R. 643)

Regulation .16A, B amended effective April 7, 2008 (35:7 Md. R. 751)

Regulation .16 repealed effective March 3, 2025 (52:4 Md. R. 221)

Regulation .17 amended effective September 18, 2023 (50:18 Md. R. 800)

Regulation .17A amended effective April 7, 2008 (35:7 Md. R. 751); January 14, 2010 (37:1 Md. R. 16); July 26, 2010 (37:15 Md. R. 1000); February 7, 2011 (38:3 Md. R. 152); April 28, 2014 (41:8 Md. R. 473)

Regulation .17B amended effective April 7, 2008 (35:7 Md. R. 751)