General Program Questions

In April 2005, the Montgomery County Council enacted a law and accompanying Executive Regulation (12MB) establishing the Local Small Business Reserve Program (LSBRP). As of January 1, 2006 eligible small businesses in Montgomery County can bid on selected County contracts competing only with other business meeting the program criteria. Designated County departments are required to structure their procurement processes so that at least twenty(20) percent of their LSBRP eligible procurement dollars are spent with qualified small businesses. The law will sunset on December 31, 2012 unless re-enacted by the Montgomery County Council.

The Program does not apply to:

the value of any contract to which this Regulation does not apply because of a conflict with a State, federal, or local law or a grant requirement;
a preexisting contract or extension(s) of a preexisting, multi-year, contract executed by the County;
a non-competitive contract;
a public entity or emergency procurement;
any waiver made under Montgomery County Code §11B-67(f) (waiver granted by the County’s Chief Administrative Officer);
any procurement where no Local Small Business is deemed qualified or able to perform the contract as determined by the head of the Using Department;
Or any single procurement that is estimated to exceed $10 million.

2. Are all Montgomery County Departments required to reserve twenty (20) percent of their LSBRP eligible procurement dollars for qualified Local Small Businesses? - back to top

All Montgomery County departments will have to abide by the Local Small Business Reserve Program. These include:

Board of Elections
Board of Investment Trustees
Circuit Court
Commission for Women
Community Engagement Cluster
County Attorney's Office
County Executive's Office
Ethics Commission
Department of Correction and Rehabilitation
Department of Economic Development
Department of Environmental Protection
Department of Finance
Department of Fire and Rescue Service
Department of General Services
Department of Health and Human Services
Department of Homeland Security
Department of Housing and Community Affairs
Department of Liquor Control
Department of Permitting Services
Department of Police
Department of Recreation
Department of Technology
Department of Transportation
Montgomery County Council
Montgomery County Ethics Commission
Montgomery County Public Libraries
Montgomery County Sheriff’s Office
Office of Community Use of Public Facilities
Office of Consumer Protection
Office of Emergency Management and Homeland Security
Office of Human Resources
Office of Human Rights
Office of Inspector General
Office of Intergovernmental Relations
Office of Legislative Oversight
Office of Management and Budget
Office of Public Information
Office of the County Attorney
Offices of the County Executive

The Web sites for these agencies can be accessed through www.montgomerycountymd.gov using the Department drop down list.

3. How will the LSBRP benefit the County? - back to top

Small businesses are the engines of economic growth. Nationally, they account for approximately:

75 percent of the net new jobs added to the economy.
91 percent of all employers.
50 percent of the private work force.
41 percent of private sales in the country.
31 percent of jobs in high technology sectors in 2001.
97 percent of all U.S. exporters

The LSBRP will help foster the development of small businesses located in Montgomery County, leading to new employment opportunities, increased income, spending and greater tax revenues to support Montgomery County services and capital investments that improve infrastructure and meet other community needs.

4. What are the benefits for businesses of participating in the LSBRP? - back to top

The LSBRP was created to enhance the competitiveness of and increase economic opportunities for Montgomery County-based small businesses by creating separately-defined County procurement opportunities for local small businesses. Once a solicitation has been designated as Local Small Business Reserve, only bids or proposals from certified local small businesses will be accepted. Therefore, a business will be in competition only with other certified small businesses, thus increasing its chances of winning County procurements.

5. Can a nonprofit organization qualify as a Local Small Business? - back to top

No, only a for-profit business can apply to be qualified as a Local Small Business.

6. Is a Local Small Business the same as a Minority, Female or Disabled Business? - back to top

No, but a business may meet the criteria as a Local Small Business and one or more of these other categories. For more information about Montgomery County’s Minority, Female and Disabled Persons Procurement Program, please contact the Office of Procurement at (240) 777-9913 or via e-mail at: procure@montgomerycountymd.gov

7. What steps is the County taking to ensure that sufficient numbers of businesses are registering for the LSBRP? - back to top

Montgomery County is undertaking multiple outreach efforts to maximize registration. These outreach efforts include: press releases, newspaper ads, public service announcements, cable TV talk show discussions, presentations at Chambers of Commerce meetings, support by branches of the Montgomery County Libraries, participation at trade shows, and encouragement of Using Departments to alert their vendors.

8. When does a vendor become disqualified? - back to top

Vendors are disqualified from participating in the LSBRP when they no longer meet the size/sales, the location, independence, brokerage, field dominance or exceed a $10 million/10 contract ceiling (as of January 1, 2006) criteria. Vendors are obligated to inform DGS when their eligibility changes.

9. Who is responsible for administering the LSBRP? - back to top

Administrative oversight of the LSBRP rests with the Department of General Services(DGS). However, each Using Department has responsibility for ensuring compliance with program regulations and meeting its 20% LSBR requirement. General questions concerning the program can be directed to DGS email LSBRP@montgomerycountymd.gov or DGS administrators at (240)777-9913.

A summary of DGS’s responsibilities appears below:

Host and maintain a searchable LSBRP Database.
Markets the program and provides outreach efforts to Local Small Businesses by:
1. Advertising the LSBRP in the media to increase the public awareness of the Program.
2. Preparing an LSBRP brochure and other necessary collateral material, and distributing these materials in strategic locations to enable easy and timely access by businesses in Montgomery County.
3. Participating in County business events at least three times a year to market the Program.
4. Working with small business resource groups in Montgomery County such as the Chambers of Commerce, Small Business Development Centers, Women’s Business Organization, etc., to disseminate Program information to the member businesses.
5. Preparing a press release once a year to publicize the Program results.
Reports to the County Council each year on annual Program results.
Takes any other action necessary to administer or implement the Program

Business Questions

1. How is a Local Small Business defined in Montgomery County? - back to top

To qualify as a “Local Small Business,” a business must be a for-profit business, other than a broker, that has the following elements:

It is independently owned and operated.
It is not a subsidiary of another business.
The business has its physical business location(s) only in the County; or The business has physical business locations both in and outside of the County, and the County based location (s) account for over 50% of the business’s total number of employees, or over 50% of the business’s gross sales.
Does not exceed the following size or gross sales criteria:
- The wholesale operations (sale of goods in large quantities usually for resale) of the business, if any, did not employ more than 30 persons, or the gross sales of these business operations did not exceed an average of $5,000,000 in its most recently completed 3 fiscal years.
- The retail (sale of goods in small quantities directly to the ultimate consumer) operations of the business, if any, did not employ more than 30 persons, or the gross sales of these business operations did not exceed an average of $5,000,000 in its most recently completed 3 fiscal years.
- The manufacturing (producing goods from raw materials by hand or by machinery) operations of the business, if any, did not employ more than 40 persons, or the gross sales of these business operations did not exceed an average of $14,000,000 in its most recently completed 3 fiscal years.
- The services operations of the business, if any, did not employ more than 50 persons, or the gross sales of these business operations did not exceed an average of $5,000,000 in its most recently completed 3 fiscal years.
- The construction operations of the business, if any, did not employ more than 50 persons, or the gross sales of these business operations did not exceed an average of $14,000,000 in its most recently completed 3 fiscal years.

2. How does a business register as a certified local small business? - back to top

Once a business has determined that it meets the eligibility criteria described above, it can register to become a self-certified local small business on the LSBRP Web site: www.montgomerycountymd.gov/LSBRP. For persons or companies without computer access, assistance is available at Montgomery County Libraries or through the Department of General Services(DGS). If they choose to work through DGS, they should make an appointment with DGS administrators by calling at (240)777-9913. There is no charge to register.

3. When must a business self certify for the LSBRP? - back to top

Businesses may self certify at any time. To be considered for solicitations designated as part of the LSBRP, businesses must self certify by the bid/proposal closing date.

4. How often must a business get certified as a local small business? - back to top

Businesses must renew their certification every 3 years. Montgomery County will send an automated e-mail reminder to registered businesses during the eleventh month from the anniversary date of their initial application; it is the responsibility of each company to recertify before its anniversary date.

5. What happens if the status of a self certified business changes? - back to top

If a business ceases to be independently owned and operated, or becomes a subsidiary of another business, it will no longer be eligible to participate in the LSBRP and should notify the Department of General Service via email at LSBRP@montgomerycountymd.gov, or in writing: Local Small Business Reserve Program, 255 Rockville Pike, Suite 180 Rockville, MD 20850-4168

6. What if a business operates in more than one of the five general business classifications? - back to top

If a business operates in more than one of the above-noted business operations classifications (i.e. wholesale, retail, manufacturing, service, and construction), its combined business operations must meet the above-stated limitation of the more liberal size or sales criteria. For instance, regarding gross sales, for any type of retail and service operations, the average annual gross sales limit is $5 million. Therefore, the combined operation cannot exceed $5 million annually in average gross sales. Further, regarding size, the employment limit for retail is 30 persons versus 50 for a service operation. Accordingly, a business with both retail and service classifications can have up to 50 employees.

7. How are the gross sales and employment levels calculated? - back to top

Gross sales for a business that has been in operation long enough to file a Federal income tax statement, shall be determined by the average of gross sales amounts contained on the tax form(s) for the most recently completed three fiscal years. In the absence of a federal income tax statement, the business must provide verification that it meets the definition of a Local Small Business, including the above size or sales criteria, through audited financial statements. If a business has not existed for three years, the employment and gross sales average(s) shall be the average for each year or part of a year during which the business has been in existence. For a newly formed business, the determinations regarding size or sales criteria will be based upon then-current employment levels as of the time of the Local Small Business Reserve Program application, or projected gross sales for that fiscal year.

Employment is the measurement of the number of people a business employs as calculated on a “Full-Time Equivalent” (FTE) basis. Any full-time, part-time, temporary, or contractual employee who is not a broker, including an employee of a temporary help firm or a subcontractor, working for and receiving compensation from the business, will be included in determining the number of people a business did or did not employ for a particular period. The averaged sum of the specific FTE employment levels for a business at the end of each calendar quarter (i.e. March 31, June 30, September 30 and December 31) will determine the business’s annual FTE employment level.

8. How will a business know if a solicitation is reserved for local small businesses? - back to top

Solicitations reserved for local small businesses are posted and identified as such on the Montgomery County Office of Procurement Web site: http://www.montgomerycountymd.gov/content/procurement/. The site can be reached through “Solicitations” under the Program Web site: http://www.montgomerycountymd.gov/LSBRP. Businesses should frequently check this Web site in order to pursue contracting opportunities with Montgomery County.

For their part, Using Department contract administrators are encouraged to reach out to qualified vendors to help ensure that they are aware of procurement opportunities. Moreover, Departments are encouraged to inform vendors of LSBRP reserve solicitations. .

9. How can businesses learn of pending solicitations? - back to top

Businesses may obtain information on pending solicitations by clicking the "Solicitations" button on the LSBRP Web site. This link takes you directly to the Office of Procurement solicitation page. The page lists both formal (over $25,000) and informal solicitations ($5,000 to $25,000). Solicitations that are reserved for Local Small Business Reserve Program are identified as such.

Businesses may obtain information on future procurement opportunities on the Office of Procurement Web site and the LSBRP Web site. The Office of Procurement Web site lists the proposals anticipated by Montgomery County Departments in the current Fiscal Year

10. Where do I register? - back to top

11. What does the Search Vendors page do? - back to top

The Search Vendor Page allows you to view which other businesses have self-certified for the Program and authorized to publicly display their information. You can search for firms by industry type, name, and area. This page serves two purposes. It is as a vehicle for networking among businesses, often critical when developing proposals for governmental solicitations. In addition, businesses can obtain an idea as to competition or partners within certain business sectors. However, only firms that have provided authorization are displayed for public view.

12. What does the Solicitation link do? - back to top

The Solicitations page links to the Office of Procurement Web site. This link takes you directly to the Office of Procurement solicitation page. The page lists both formal (over $25,000) and informal solicitations (less than $25,000). Solicitations that are reserved for Local Small Business Reserve Program are identified as such. Other information on the Procurement Web site includes contract number, solicitation name, bid due date, and where to obtain solicitation specifications.

13. What information will I find on the Office of Procurement web site? - back to top

In addition to contract solicitations notices, the Office of Procurement Web site provides County contact information, commodity listings, and the various forms and documents needed to facilitate the contracting by the County.

14. What should I do if I encounter problems using the LSBRP web site? - back to top

Contact the Department of General Service either by e-mail LSBRP@montgomerycountymd.gov or at (240)777-9913.