Maryland’s $67B Modernization Push: What It Means for Local Government Contractors
Maryland’s FY2026 budget isn’t just about plugging a $3.3 billion deficit—it’s also about transforming how the state operates. And if you’re a small business owner in Maryland with your eye on government contracting opportunities, now is the time to lean in.
Governor Wes Moore’s $67 billion budget, signed in May 2025, is backed by an aggressive executive order to modernize the state’s procurement, IT, real estate, and fleet management systems. This is not window dressing. It’s a sweeping operational shakeup aimed at saving $50 million in FY26 alone—and over $576 million over the next few decades.
For Maryland-based small businesses—especially those with or pursuing state certifications—this shift is a strategic opening. The modernization wave is rolling, and the businesses that get ahead of it will be the ones landing contracts.
Let’s break it down.
Maryland agencies are being nudged—hard—toward using standardized statewide contracts for routine purchases, like shipping and office supplies. That’s how the state plans to save $14 million in FY26.
At first glance, this might seem like bad news for small vendors. After all, won’t this just funnel work to big, pre-approved suppliers?
Not necessarily.
Here’s the upside:
The new Procurement Reform Act of 2025 and a related executive order are putting real muscle behind small business access.
Certified Small Business Reserve (SBR) and Minority Business Enterprise (MBE) participation goals are being enforced more seriously—30% of state solicitations are now SBR-only.
New rules give price preferences to businesses with “Good Labor Practices,” which could level the playing field for quality-focused small firms.
If you’re not on a statewide contract yet—get on one. If that’s not feasible, partner with someone who is. And if you’re already SBR/MBE certified, stay aggressive about tracking set-aside solicitations through eMaryland Marketplace (eMMA).
Maryland’s IT overhaul is another rich field—$46 million in expected FY26 savings by eliminating outdated systems and centralizing cybersecurity.
What this means for you:
If you sell hardware, match your specs to what the state’s buying. You don’t need to sell everything—just what’s already being standardized.
If you offer services, look to decommission legacy systems, handle data migrations, or help with VoIP consolidation.
If cybersecurity is your niche, there’s a growing demand for integration support, IAM rollout, and security training.
Don’t overlook the cloud angle: agencies shedding hardware may turn to managed service providers. And local firms that partner with AWS, Microsoft, or Google will have an edge.
Maryland is ditching underused buildings in downtown Baltimore—nine buildings to be exact—including the State Center complex. That’s $326 million in long-term savings and a big churn in the local real estate and construction economy.
Here’s where the opportunities are:
If you’re in real estate, help the state lease new office space.
If you’re in construction or architecture, compete for tenant improvements and office build-outs.
If you offer facility maintenance, bid on janitorial, HVAC, security, or landscaping services in newly leased spaces.
If you consult on adaptive reuse, the old buildings will need repurposing—into mixed-use, residential, or cultural spaces.
There’s short-term project work in every relocation and long-term opportunity in every renovation.
Maryland plans to shrink its fleet and go green—$6 million in fleet savings is projected for FY26. The Climate Solutions Act is driving a transition to electric vehicles (EVs), and the Department of General Services is rolling out statewide EV charging infrastructure.
That opens doors for:
EV dealerships
Electrical contractors for charger installations
Auto shops certified for EV maintenance
Fleet management software providers
Vendors offering fuel-efficient or anti-idle vehicle add-ons
Bonus: companies offering microtransit or shuttle solutions might also find contracts as the state shifts from ownership to shared mobility in dense urban areas.
To tap into this moment, you need to:
Get SBR, MBE, VSBE, or SDVOB certified on eMMA if you’re not already.
Study Maryland’s COMAR regulations on set-asides and preferences.
Build relationships with prime contractors—many of these modernization projects will be too big for a solo shop.
Differentiate with localized, flexible services that big companies can’t match.
Stay compliant. New labor, diversity, and sustainability rules are part of every contract now.
Attend state-run trainings and networking events—especially the TIPS webinars from the Governor’s Office of Small, Minority & Women Business Affairs.
This is more than a budget—it’s a call for operational reinvention. And the state isn’t just looking for the cheapest option; it’s looking for compliant, responsive, community-rooted vendors.
If you can offer scalable, fast-turnaround solutions and show how your business helps Maryland achieve equity, sustainability, or labor goals, you’ve got an edge.
Want more on how to align your services with Maryland’s modernization moves? Check out our post on “Your Step-by-Step Guide to Federal Government Contracting for Small Businesses in 2025” for a step-by-step guide to maximizing your state contracting potential.
If you aren't a Squared Compass partner, what are you waiting for? From getting your business set up with specific government set aside programs at both the State and Federal level, to being empowered by a Fractional Capture team to win government contracts, to receiving tailored government contract opportunities Squared Compass delivers immense value which helps propel our partners to success. Schedule a chat with our team today.
