Minority Business Enterprise Ombudsman
About the Minority Business Enterprise Ombudsman
Established through State Government Article § 9-4116, the MBE Ombudsman Unit officially started in January 2024. Led by Nichelle Johnson, Maryland's first appointed Minority Business Enterprise (MBE) Ombudsman, the Unit offers an independent and impartial resource for certified MBEs, prime contractors, and participating contracting entities. By facilitating open communication, providing practical guidance, and engaging early in procurement concerns, the Unit works to foster fair business practices and ensure successful contract performance.
How We Help
We assist businesses, prime contractors, certified MBEs, and contracting entities in addressing procurement-related concerns and resolving contract performance issues through facilitated discussions and collaborative problem-solving before disputes escalate.
We offer guidance, develop policies, and create resources to assist contracting entities and internal/external stakeholders in successfully implementing the MBE Program and complying with requirements.
We serve as subject matter experts for executives, legislators, procurement personnel, and stakeholder organizations. When concerns fall outside the Ombudsman Unit’s authority, we connect stakeholders with the appropriate agency, office, or resource.
We oversee the collection of data regarding documented contract performance by prime contractors to ensure accountability and maintain program integrity.
We provide training for non-MBE prime contractors as well as MBEs performing in the prime and/or subcontracting role. We also conduct training for contracting entities on enforcement of the requirements of Title 14, Subtitle 3 of the State Finance and Procurement Article.
We offer technical assistance to help businesses and participating entities better understand Maryland’s procurement processes and MBE compliance requirements.
We help Minority Business Enterprise (MBE) subcontractors and suppliers get paid on time on State contracts. When a prime contractor does not pay, we work with the procurement officer on the contract to help resolve the dispute.
How prompt payment works on State contracts
- The State's policy is to pay a prime contractor within 30 days after payment is due and the agency receives a proper invoice, or within 15 days on a Small Business Reserve (SBR) contract.
- Within 10 days after receiving a progress or final payment from the State, the prime contractor must pay each subcontractor and supplier any undisputed amount, including undisputed retainage. Subcontractors must pay their own lower-tier subcontractors on the same schedule.
- A prime contractor that withholds payment must notify the subcontractor or supplier in writing, explain why, and send a copy to the procurement officer.
- The procurement officer contacts the subcontractor or supplier within 2 business days after receiving that notice. If the amount is not in dispute, the procurement officer directs the prime contractor to pay within 3 business days.
- If you are still not paid, notify the procurement officer in writing. The procurement officer meets with the parties within 10 days. If the payment is late, the prime contractor must pay within 7 days, and the State can hold the prime contractor's payments until you are paid.
- If the payment is still late, the procurement officer can suspend payments to the prime contractor, suspend work on the contract, and require the prime contractor to pay you a penalty of up to $100 a day. Any party can appeal the procurement officer's decision.
MBE subcontractors on State contracts have all of these protections. If you are an MBE with a payment problem on a State contract, email [email protected].
Read the Prompt Payment Guide (PDF) from the Office of Small, Minority and Women Business Affairs (OSBA).
We help State agencies apply liquidated damages on contracts with MBE participation goals, and we help prime contractors understand what can trigger them.
What the rules require
- Every State contract with an MBE participation goal must include a liquidated damages provision. It applies if the prime contractor does not comply in good faith with MBE Program requirements or the MBE terms of the contract.
- Common triggers include not submitting monthly MBE payment reports, not requiring MBE subcontractors to submit their payment reports, ending or reducing an MBE subcontractor's work without good cause and the agency's approval, falling short of the MBE participation commitment, and not paying a subcontractor's undisputed amount on time.
- Missing a goal does not, by itself, mean a prime contractor failed to comply in good faith. OSBA's guidelines call for the agency to review the prime contractor's efforts, send written notice of the problems it found, and give the prime contractor at least 10 days to respond in writing before it assesses liquidated damages.
- Each State agency must have a written liquidated damages policy based on the Board of Public Works (BPW) model policy. An agency that decides not to pursue liquidated damages after a breach must get its agency head's approval and document the reason.
Guidance and tools
- Guidelines for Liquidated Damages Provision for Contracts Containing MBE Participation Goals (PDF) - PDF: recommended contract language and how to calculate each amount
- Liquidated Damages Worksheet (Excel) - XLS and Liquidated Damages Hourly Rate Calculator (Excel) - XLS
- Model Policy on Liquidated Damages (PDF) - PDF from the Board of Public Works
- Liquidated Damages Policy and Procedures (PDF) - PDF from the Department of General Services (DGS) Office of State Procurement, for procurements under DGS control authority
Agencies and prime contractors with questions can email [email protected].
Standards of Practice
- Confidential: Communications with the Ombudsman are confidential, and no information or opinion presented to an Ombudsman (or even the fact that the Ombudsman has been contacted) will be shared with other parties without the express permission of the visitor. The only exceptions to confidentiality are if required by law or litigation (such as in the case of fraud, violence, or criminal activity). Additionally, contracting entities, DoSEM staff, and the Assistant Attorney General assigned to the Office consult about cases in a confidential manner.
- Impartial: The MBE Ombudsman will work with small and minority business owners, prime contractors, and procurement personnel to ensure the laws, regulations, and established policies of the MBE program are followed.
- Independent: The MBE Ombudsman Unit operates within the Maryland Department of Social and Economic Mobility.
Our Promise
Conflict Resolution
We will listen to the concerns of the requesting party and brainstorm possible approaches to address concerns.
We will encourage and facilitate communication among involved parties, with the permission of the requesting party.
We will provide support to resolve problems and contact prime contractors or State personnel who might help resolve the matter.
Education and Training
We will provide educational opportunities and resources to help explain current laws, regulations, policies, and procedures of the MBE Program.
Promote Change
We will capture informational data to identify patterns and trends in the State contracting ecosystem.
We will use information, data trends, and metrics to inform recommendations for changes in policy and regulations, encouraging positive systemic change.
We will work collaboratively with contracting entities and executives, legislators, business resource organizations, chambers, and others to create better opportunities and a more inclusive atmosphere in State contracting for small, minority-owned, and women-owned businesses.
Questions for the MBE Ombudsman?
General email [email protected] or
MBE Fraud Hotline
If you suspect fraud against a certified MBE, report it to the MBE Fraud Hotline at 410-697-9611 to trigger an investigation. Callers may remain anonymous, and providing more details helps support the investigation.