State Procurement - Competitive Proof of Concept Procurement

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*sb0157*

SENATE BILL 157
P2 6lr0297
(PRE–FILED) CF HB 261
By: Chair, Budget and Taxation Committee (By Request – Departmental – General
Services)
Requested: September 30, 2025
Introduced and read first time: January 14, 2026
Assigned to: Budget and Taxation

A BILL ENTITLED

AN ACT concerning 1

State Procurement – Competitive Proof of Concept Procurement 2

FOR the purpose of establishing competitive proof of concept procurements as an 3
authorized procurement method; providing that a competitive proof of concept 4
procurement may have multiple phases of evaluation; requiring a unit of State 5
government to obtain the approval of the Chief Procurement Officer or a designee 6
before conducting a certain competitive proof of concept procurement; requiring a 7
unit of State government to obtain the approval of the Secretary of Information 8
Technology or a designee before conducting a certa in competitive proof of concept 9
procurement for information technology; repealing a provision that authorizes a 10
competitive proof of concept procurement to be conducted through certain 11
procurement methods; altering the required contents of a comp etitive pr oof of 12
concept solicitation; requiring competitive proof of concept solicitation s to be posted 13
on eMaryland Marketplace Advantage; altering procedures for conducting a 14
competitive proof of concept procurement; authorizing a unit to enter into certain 15
contracts with certain offerors under certain circumstances ; requiring a unit to 16
publish notice of a certain award in eMaryland Marketplace Advantage; requiring 17
the Department of General Services to adopt certain regulations; providing for the 18
establishment of certain percentage goals for m inority business enterprise 19
participation and veteran –owned small business enterprise participation; 20
authorizing the Governor’s Office of Small, Minority, and Women Business Affairs 21
to exempt competitive proof of concept procurements from the small business reserve 22
designation under certain circumstances; and generally relating to competitive proof 23
of concept procurements. 24

BY repealing and reenacting, with amendments, 25
Article – State Finance and Procurement 26
Section 13–102(a), 13–116, 14–302(a)(2), 14–502.1(b), and 14–602(b) 27
2 SENATE BILL 157

Annotated Code of Maryland 1
(2021 Replacement Volume and 2025 Supplement) 2

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 3
That the Laws of Maryland read as follows: 4

Article – State Finance and Procurement 5

13–102. 6

(a) The following procurement methods are authorized at the procurement 7
officer’s discretion, where applicable: 8

(1) competitive sealed bids under § 13–103 of this subtitle; 9

(2) competitive sealed proposals under § 13–104 or § 13 –105 of this 10
subtitle; 11

(3) noncompetitive negotiation under § 13–106 of this subtitle; 12

(4) sole source procurement under § 13–107 of this subtitle; 13

(5) emergency or expedited procurement under § 13–108 of this subtitle; 14

(6) small procurement under § 13–109 of this subtitle; 15

(7) an intergovernmental cooperative purchasing agreement under § 16
13–110 of this subtitle; 17

(8) auction bids under § 13–111 of this subtitle; 18

(9) architectural, engineering, and land surveying services qualification 19
based selection under § 13–112 of this subtitle; 20

(10) master contracting under § 13–113 of this subtitle; [or] 21

(11) legislative fast–track procurements under § 13–117 of this subtitle; OR 22

(12) COMPETITIVE PROOF OF CONCEPT PROCUREMENT S UNDER § 23
13–116 OF THIS SUBTITLE. 24

13–116. 25

(a) In this section, “proof of concept” means a test, evaluation, demonstration, or 26
pilot project of a good, service, or technology in a real –world environment to evaluate 27
whether the good, service, or technol ogy can be successfully deployed and is beneficial to 28
the State. 29
SENATE BILL 157 3

(b) (1) A competitive proof of concept procurement is a formal competitive 1
procurement method that may be used to solicit proposals for the conduct of a proof of 2
concept [prior to ] AND PART ICIPATION IN SUBSEQU ENT PHASES OF THE 3
PROCUREMENT, INCLUDING full implementation OR DEPLOYMENT when the head of a 4
unit determines the process to be appropriate and in the best interests of the unit, 5
including: 6

(i) testing software–as–a–service or off–the–shelf software; 7

(ii) testing new, innovative products or services; or 8

(iii) testing a product or service conceptualized or conceived of by a 9
unit of State government. 10

(2) (i) 1. After obtaining the approval of the head of the unit and 11
before conducting a competitive proof of concept procurement, the unit shall obtain 12
approval from [the Secretary of Information Technology, or the Secretary’s designee] THE 13
CHIEF PROCUREMENT OFFICER, OR THE CHIEF PROCUREMENT OFFICER’S 14
DESIGNEE. 15

2. THE REQUEST FOR APPRO VAL UNDER THIS 16
SUBPARAGRAPH SHALL DEMONSTRATE THAT CONDUCTING A COMPETITIVE PROOF 17
OF CONCEPT PROCUREMENT IS IN THE BEST INTEREST OF THE STATE. 18

(II) IF THE PROCUREMENT IS FOR INFORMATION TECHNOLOGY, 19
BEFORE CONDUCTING A COMPETITIVE PROOF OF CONCEPT PROCUREMENT, THE 20
UNIT SHALL OBTAIN AP PROVAL FROM THE SECRETARY OF INFORMATION 21
TECHNOLOGY, OR THE SECRETARY’S DESIGNEE. 22

[(ii)] (III) The Secretary of Information Technology may grant 23
approval for a competitive proof of concept procurement FOR INFORMATION 24
TECHNOLOGY if the unit: 25

1. has sufficient internal resources to manage the proof of 26
concept, including human capital, subject mat ter expertise, and technological 27
infrastructure, or has the means to obtain these resources; and 28

2. enters into a memorandum of understanding with the 29
Department of Information Technology that requires regular status updates, vendor 30
capacity, and any other information necessary for the Department of Information 31
Technology to evaluate whether the proof of concept can be successfully deployed and is 32
beneficial to the State. 33

4 SENATE BILL 157

(c) (1) [A competitive proof of concept procurement may be conducted through 1
the issuance of a solicitation by any method of procurement authorized under this Division 2
II. 3

(2)] A competitive proof of concept procurement solicitation shall include a 4
statement of: 5

(i) the scope of work, STATEMENT OF NEED, or project description, 6
including the intended use, quantity, estimated time frame for the proof of concept, and 7
anticipated number of proof of concept awards that will be made; and 8

(ii) the factors, including price, that will be used AT EACH PHASE in 9
evaluating proposals and the relative importance of each. 10

[(3)] (2) A solicitation may be distributed to vendors known to offer goods 11
or services within the scope of the proof of concept and shall [, except for procurements 12
under $15,000 not otherwise required by law to be posted,] be posted on eMaryland 13
Marketplace Advantage[, in accordance with the policies and procedures under subsection 14
(g) of this section]. 15

(d) After receipt of proposals but before award of a procurement contract, a unit 16
may: 17

(1) conduct discussions with AND RECEIVE CLARIFIC ATIONS FROM an 18
offeror [to ensure full understanding of: 19

(i) the requirements of the unit, as set forth in the request for 20
proposals; and 21

(ii) the proposal submitted by the offeror; and]; 22

(2) request product samples for testing by the unit or a demonstration of a 23
product or service and use these samples or demonstrations in its evaluation process; AND 24

(3) ALLOW OFFERORS REASO NABLY SUSCEPTIBLE OF BEING 25
SELECTED FOR AWARD T O PARTICIPATE IN ALL SUBSEQUENT PHASES OF THE 26
PROCUREMENT INCLUDING SUBMISSION OF BEST AND FINAL OFFERS. 27

(e) (1) A [request for] UNIT MAY ISSUE A CON TRACT TO EACH OFFERO R 28
REASONABLY SUSCEPTIBLE OF BEING SELECTED FOR AWARD TO DELIVER product 29
samples for testing or PROVIDE A demonstration made under s ubsection (d)(2) of this 30
section [shall be issued to all offerors deemed reasonable at the time of the request]. 31

SENATE BILL 157 5

(2) A CONTRACT AWARDED UNDER THIS SUBSECTIO N DOES NOT 1
PRECLUDE A VENDOR FROM CONTINUING TO PARTICIPATE IN SUBSEQUENT PHASES 2
OF THE PROCUREMENT. 3

(f) [A unit may award one or more of the proposals a contract for the proof of 4
concept. 5

(g) A vendor awarded a proof of concept procurement shall be eligible to bid on a 6
procurement to implement a proposal related to the proof of concept procurement] A UNIT 7
MAY AWARD ONE OR MOR E CONTRACTS FOR FULL IMPLEMENTATION OR 8
DEPLOYMENT OF THE GO OD, SERVICE, OR TECHNOLOGY EVALUATED DURING THE 9
PROOF OF CONCEPT IF IT IS IN THE BEST INTEREST OF THE STATE. 10

(G) A UNIT SHALL PUBLISH NOTICE OF A CONTRACT AWARDED UNDER THIS 11
SECTION IN EXCESS OF THE SMALL PROCUREMENT AMOUNT SPECIFIED IN § 13–109 12
OF THIS SUBTITLE IN EMARYLAND MARKETPLACE ADVANTAGE. 13

(h) The Department of General Services, in consultation with the Dep artment of 14
Information Technology, shall adopt REGULATIONS, policies, and procedures for the 15
development and implementation of competitive proof of concept procurements. 16

14–302. 17

(a) (2) (I) The Special Secretary for the Office of Small, Minority, and 18
Women Business Affairs, in consultation with the Secretary of Transportation, the Chief 19
Procurement Officer, and the Attorney General, shall establish guidelines for each unit to 20
consider when determining the appropriate minority business enterprise particip ation 21
percentage goal for a procurement contract in accordance with paragraph (3) of this 22
subsection. 23

(II) FOR A COMPETITIVE PRO OF OF CONCEPT PROCUR EMENT 24
CONDUCTED UNDER § 13–116 OF THIS ARTICLE , THE MINORITY BUSINESS 25
ENTERPRISE PARTICIPATION PERCENTAGE GOAL, IF ANY, SHALL BE ESTABLISHED 26
AT A PHASE SPECIFIED IN THE SOLICITATION DOCUMENTS. 27

14–502.1. 28

(b) (1) [A] EXCEPT AS PROVIDED IN PARAGRAPH (3) OF THIS 29
SUBSECTION, A procurement with a total dollar value of $1,000,000 or less shall be 30
designated for the small business reserve. 31

(2) Each unit or agency shall implement this subsection in a manner 32
consistent with all applicable statutes, including the requirements of Subtitle 3 of this title. 33

6 SENATE BILL 157

(3) A COMPETITIVE PROOF OF CONCEPT PROCUREMENT CONDUCTED 1
UNDER § 13–116 OF THIS ARTICLE MAY BE EXEMPT FROM DESIG NATION UNDER 2
PARAGRAPH (1) OF THIS SUBSECTION I F THE GOVERNOR’S OFFICE OF SMALL, 3
MINORITY, AND WOMEN BUSINESS AFFAIRS DETERMINES TH AT IT IS NOT 4
PRACTICABLE TO DESIG NATE THE PROCUREMENT FOR THE SMALL BUSINESS 5
RESERVE. 6

14–602. 7

(b) (1) [Solicitation] EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS 8
SUBSECTION, SOLICITATION documents shall state the expected percentage of 9
veteran–owned small business enterprise participation based, in part, on: 10

[(1)] (I) the potential contracting opportunities available in the 11
procurement contract, including both prime contracting and subcontracting opportunities, 12
as determined through analysis of the scope of the work presented in the solicitation 13
documents; and 14

[(2)] (II) the availability of veteran –owned small business enterprises to 15
respond competitively to the potential contracting opportunities. 16

(2) FOR A COMPETITIVE PRO OF OF CONCEPT PROCUR EMENT 17
CONDUCTED UNDER § 13–116 OF THIS ARTICLE , THE EXPECTED PER CENTAGE OF 18
VETERAN–OWNED SMALL BUSINESS ENTERPRISE PARTICIPATION, IF ANY, SHALL BE 19
ESTABLISHED AT A PHASE SPECIFIED IN THE SOLICITATION DOCUMENTS. 20

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June 21
1, 2026. 22