BPW Advisory 1996-5 Reciprocal Preferences

Purpose: To guide procurement agencies in applying Maryland’s reciprocal preference law.  

Authority: Procurement agencies may apply reciprocal preferences when awarding contracts based on competitive sealed bidding, contracts based on competitive sealed proposals, and contracts for architectural or engineering services. COMAR 21.05.01.04.

Policy: Maryland Law does not generally authorize State procurement officers to favor resident vendors over non-resident vendors in awarding procurement contracts. 

EXCEPTION: State schools and State facilities must give a price preference not to exceed 5% to locally-grown foods. State Finance and Procurement Article, §, Annotated Code of Maryland; COMAR 21.11.07.08.  

NOTE:  The Economic-Benefits evaluation factor is NOT a resident business preference.  COMAR 21.05.03.03; Board Advisory 1996-4​.  

However, some other states do grant preferences to their resident vendors. When an out-of-State business from a state with a preference law responds to a Maryland procurement solicitation, Maryland may apply against that out-of-State business that same preference that the business’s home state (or the state in which the nonresident has its principal operation through which it would provide the goods or services) would apply against a vendor whose principal office or base of business is located in Maryland.

Procedure: Procurement agencies must determine whether the state in which out-of-State bidders or offerors are located affords their resident businesses a preference in competing for government contracts.  Preferences to be considered in this context include any preferences that favor a resident business over a non-resident business, such as a percentage preference or discount, point allowance, or employee residency requirement. Preferences that may be applied include those established by statute, regulation, executive or administrative order, directive, policy, or practice.  Upon determining such a preference exists, agencies may then reciprocate by applying the home-state preference against the non-resident bidder or offeror in the evaluation.

Solicitations must state that reciprocal preferences will be used where applicable.

If application of a reciprocal preference conflicts with a federal law or grant affecting the procurement contract, the federal law or grant prevails.

Consult with your agency’s assistant attorney general to verify the current status of another state’s procurement preferences before applying a reciprocal preference. To see a sample, click here for Oregon's Preference Chart.​