Md. Code, State Finance and Procurement, Title 15

Md. Code, State Finance and Procurement, Title 15
in effect

Md. Code, State Finance and Procurement § 15-102

A contractor who submits an invoice for a procurement contract shall include in the invoice: (1) the contractor’s federal employer’s identification number or Social Security number; (2) the procurement contract or purchase order number or another adequate description of the procurement contract; and (3) any documentation required by regulation or the procurement contract.

Md. Code, State Finance and Procurement § 15-103

(a) It is the policy of the State to make a payment under a procurement contract: (1) within 30 days after the day on which the payment becomes due and the unit receives a proper invoice; or (2) for a small business reserve contract, within 15 days after the day on which the payment becomes due and the unit receives a proper invoice. (b) Interest shall accrue in accordance with § 15–104 of this subtitle.

Md. Code, State Finance and Procurement § 15-104

(a) Except as provided in § 15–105 of this subtitle, interest shall accrue at the rate of 9% per annum on any amount that: (1) is due and payable by law and under the written procurement contract; and (2) remains unpaid more than 37 days after a unit receives an invoice. (b) Interest shall accrue beginning on the 31st day after: (1) the day on which payment becomes due under a procurement contract; or (2) if later, the day on which the unit receives an invoice.

Md. Code, State Finance and Procurement § 15-105

A unit is not liable under § 15-104 of this subtitle for interest: (1) unless within 30 days after the date on the State’s check for the amount on which the interest accrued, the contractor submits an invoice for the interest; (2) if a contract claim has been filed under Subtitle 2 of this title; (3) accruing more than 1 year after the 31st day after the unit receives an invoice; or (4) on an amount that represents unpaid interest.

Md. Code, State Finance and Procurement § 15-108

(a) This section does not apply to any procurement contract funded with tax-exempt financing. (b) (1) Subject to the requirements of this section, a contractor under a procurement contract that a unit awards for construction is entitled to have retainage under the procurement contract placed in an escrow account if the contractor: (i) elects that procedure in the procurement contract in the space provided for that election; and (ii) submits to the unit an escrow agreement that meets the requirements of subsection (c) of this section. (2) The procurement contract shall identify the escrow agent. (c) The escrow agreement shall: (1) be on a form that the unit provides; (2) include the complete address of both the escrow agent and the surety; (3) authorize the unit to pay retainage to the escrow agent; and (4) be signed by: (i) the contractor; (ii) the surety for the contractor; and (iii) the escrow agent. (d) On compliance with the requirements of subsection (b) of this section, the unit shall pay the retainage to the escrow agent unless: (1) federal money is involved and application of this section would jeopardize timely recovery of that federal money; or (2) retainage is withheld for: (i) lack of progress on the part of the contractor; or (ii) other violations by the contractor. (e) In accordance with the escrow agreement, a contractor may require an escrow agent: (1) to invest the retainage placed in the escrow account; and (2) to the extent the contractor is entitled to retainage under subsection (f)(2)(ii) of this section, to pay the earnings on the investment to the contractor. (f) (1) Retainage may be released to the contractor only as directed by the unit. (2) At the time of final payment, the unit shall direct the escrow agent to settle the escrow account by distributing money in the escrow account in the following order: (i) to the unit for any claim it may have against the contractor under the procurement contract; (ii) unless waived by the Board, to the Comptroller for any claim exceeding $50 against the contractor by the State, a unit, or a State controlled governmental entity; and (iii) to the contractor.

Md. Code, State Finance and Procurement § 15-109

(a) At reasonable times an inspection may be conducted of a plant, place of business, or job site of: (1) a bidder or offeror seeking a procurement contract; (2) any contractor under a procurement contract; (3) a subcontractor under a procurement contract; or (4) a prospective subcontractor of: (i) a bidder or offeror seeking a procurement contract; or (ii) a contractor under a procurement contract. (b) An inspection under this section may be conducted by: (1) the Department of Legislative Services; (2) the unit engaged in procurement; or (3) as authorized by law, any other unit.

Md. Code, State Finance and Procurement § 15-110

(a) The following persons are subject to an audit of books, accounts, or records: (1) before the expiration of the period of retention under subsection (c) of this section, a person who submits cost and price information under § 13-220 of this article, if the books, accounts, or records being audited are reasonably connected with the cost and price information; (2) a contractor or subcontractor under a procurement contract if, from an audit of a cost-type contract, the unit has reason to believe that costs have been inappropriately assigned to the cost-type contract from a fixed-price contract; and (3) a contractor or subcontractor under a procurement contract that: (i) was awarded by a method other than competitive sealed bids; and (ii) is not a firm fixed-price procurement contract. (b) An audit under this section may be conducted by: (1) the Department of Legislative Services; (2) a unit engaged in procurement; or (3) as authorized by law, any other unit. (c) A person subject to an audit under subsection (a) of this section shall keep books, accounts, and records for: (1) at least 3 years after the day on which the person receives final payment under a procurement contract or a subcontract; or (2) if longer, the period required under the procurement contract.

Md. Code, State Finance and Procurement § 15-111

(a) Within 60 days after the end of each fiscal year, each primary procurement unit shall submit to the Chief Procurement Officer a report on each procurement contract that was awarded during the preceding fiscal year, whether the procurement was conducted by the primary procurement unit or subject to review by the primary procurement unit, and: (1) was exempt from the notice requirements of § 13–103(c) of this article because the procurement officer reasonably expected that the procurement contract would be performed entirely outside this State and the District of Columbia; (2) cost more than the small procurement amount specified in § 13–109 of this article and was awarded for the procurement of services, construction related services, architectural services, or engineering services; or (3) was awarded on the basis of: (i) § 13–107 of this article (“Sole source procurement”); (ii) § 13–108(a) of this article (“Emergency procurement”); or (iii) § 13–108(c) of this article (“Expedited procurement”). (b) (1) A report required under subsection (a)(2) or (3) of this section shall include: (i) the name of each contractor; (ii) the type and cost of the procurement contract; and (iii) a description of the procurement. (2) A report required under subsection (a)(3) of this section shall include: (i) a description of the basis for the award; (ii) the identity of the department or agency that awarded the contract; (iii) the identity of any agency official required to authorize the contract for award; (iv) the award date of the procurement contract and the final date of the contract term; (v) the date the contract award was posted to eMaryland Marketplace; and (vi) for procurements awarded under § 13–108(b) of this article (“Emergency procurement”): 1. the number of days between the agency declaration of an emergency procurement and the contract award date; 2. the date of the emergency declaration for each procurement; and 3. for an award that must be reported to the Board, the date the award was reported to the Board. (c) Within 90 days after the end of each fiscal year, the Chief Procurement Officer shall submit to the Governor, the Legislative Policy Committee, the Senate Budget and Taxation Committee, the Senate Committee on Education, Energy, and the Environment, the House Appropriations Committee, the House Health and Government Operations Committee, and the Joint Audit and Evaluation Committee a consolidated report that includes each report required under subsection (a) of this section. (d) Within 90 days after the end of each fiscal year, the Department of General Services shall submit to the Board and the General Assembly a report on each class of procurement for which the procedure for noncompetitive negotiated procurement has been approved under § 13–106 of this article. (e) A report to the General Assembly or a committee of the General Assembly under this section is subject to § 2–1257 of the State Government Article.

Md. Code, State Finance and Procurement § 15-112

(a) (1) (i) Except as provided in subparagraph (ii) of this paragraph, this section applies to State procurement contracts for: 1. construction; 2. information processing equipment, cloud computing services, and associated services; and 3. in accordance with Title 3.5, Subtitle 3 of this article, information technology system and cybersecurity upgrades and modernization. (ii) This section does not apply to State procurement contracts for public school construction or public school capital improvements. (2) For purposes of this section, a written acceptance letter for a State Highway Administration or Maryland Aviation Administration procurement contract for construction shall have the same force and effect as a change order until the State Highway Administration or Maryland Aviation Administration issues a written change order. (b) (1) Except as provided in paragraphs (2) and (3) of this subsection, a unit may not require a prime contractor and a prime contractor may not require a subcontractor to begin change order work under a contract until the procurement officer for the unit issues a written change order that specifies whether the work is to proceed, in compliance with the terms of the contract, on: (i) an agreed–to price which may include a preestablished catalog or unit prices based on local prevailing wage rates and equipment and material costs for each task required for the change order as included in the bid documents at the time of bid; (ii) a force account; (iii) a construction change directive; or (iv) a time and materials basis. (2) If a procurement officer and a prime contractor do not agree that work is included within the original scope and terms of a contract, nothing in this section: (i) prohibits a procurement officer from issuing an order to a prime contractor to perform work or to furnish labor or materials determined by the procurement officer to be required by a contract between a unit and the prime contractor; (ii) authorizes a refusal to perform work or to furnish labor or materials that a procurement officer has ordered the prime contractor to perform or to furnish because the procurement officer has determined that the work or labor is or the materials are required by a contract between a unit and the prime contractor; or (iii) prejudices or impairs the right of a prime contractor to submit a claim or dispute to a procurement officer, in accordance with applicable law and the contract, seeking additional compensation for complying with an order of the procurement officer to perform work or to furnish labor or materials determined by the procurement officer to be required by a contract between the prime contractor and a unit. (3) (i) If a unit is to pay for a contract or a part of a contract using a unit price methodology, a change order may not be required for work to continue and be completed beyond the estimated quantities in the contract. (ii) After work is completed, a unit shall: 1. determine the actual quantity used to complete the contract; and 2. if necessary, issue a final adjustment change order to the contractor. (c) If the amount to be paid under an approved change order does not exceed $50,000, a unit shall pay an invoice for work performed and accepted under the change order as provided for in the contract within 30 days after the unit receives the invoice and in accordance with § 15–103 of this subtitle. (d) Within 5 days after receipt of a written change order, a prime contractor shall provide a subcontractor with a copy of the approved change order and the amount to be paid to the subcontractor based on the portion of the change order work to be completed by the subcontractor. (e) The Board shall propose updated regulations as needed that provide for an expedited change order process for change orders valued at more than the small procurement amount specified in § 13–109 of this article. (f) (1) On or before December 31, 2016, each unit shall issue guidelines for the unit’s change order process. (2) The guidelines issued under paragraph (1) of this subsection shall be updated and reissued when any changes are made to the unit’s change order process. (g) A provision of this section has effect only to the extent that the provision does not conflict with federal law or regulation.

Md. Code, State Finance and Procurement § 15-113

(a) In this section, “liquidated damages” means damages in an amount designated by the parties to a contract that the injured party is eligible to collect as compensation for a specific breach of the contract. (b) (1) On or before January 1, 2024, the Board, in consultation with the Procurement Improvement Council, shall publish a model policy concerning the inclusion and use of liquidated damages provisions in procurement contracts. (2) The model policy shall include the following elements: (i) guidance on when to include liquidated damages provisions in procurement contracts, including: 1. instances where liquidated damages provisions are required by law, including the requirements under §§ 14–303, 17–220, 17–222, and 18–108 of this Division II; and 2. conditions where liquidated damages provisions are recommended to protect State interests; (ii) guidance for drafting liquidated damages provisions, including recommended methods for calculating the amount to be assessed; (iii) a draft plan for responding to deficiencies in a contractor’s performance that may trigger a liquidated damages provision, reviewed by legal counsel for the Board; and (iv) examples of liquidated damages provisions that may be used in a procurement contract with appropriate modification by the unit. (3) The Board may propose alternative elements or models based on contract type. (4) The Board may delegate the duties under this subsection to the Procurement Improvement Council established under § 12–105 of this Division II. (c) (1) Subject to paragraph (2) of this subsection, on or before July 1, 2024, a unit shall adopt a written policy concerning the inclusion and use of liquidated damages provisions in procurement contracts by the unit that is substantially similar to the model policy established under subsection (b) of this section. (2) (i) A primary procurement unit may establish a policy as required under paragraph (1) of this subsection that is applicable to those procurements that are within the control authority of the primary procurement unit. (ii) A unit that performs a procurement subject to the control authority of a primary procurement unit shall apply the liquidated damages policy established by the primary procurement unit to any resulting procurement contract. (d) A unit shall obtain the approval of the head of the unit if the unit decides not to include in a contract a liquidated damages clause specified under § 13–218(a)(4) of this article. (e) (1) This subsection applies only to procurements valued at $5,000,000 or more. (2) If a unit decides not to pursue liquidated damages when a specified breach associated with a liquidated damages provision has occurred, the unit shall: (i) obtain the approval of the decision by the head of the unit; and (ii) maintain documentation on the reason the unit decided not to pursue liquidated damages.

Md. Code, State Finance and Procurement § 15-202

Except to the extent authorized by regulation by the Board, this subtitle does not apply to a protest concerning any act or omission by a procurement agency under Title 14, Subtitle 6 of this article.

Md. Code, State Finance and Procurement § 15-207

(a) (1) The Appeals Board consists of 6 members appointed by the Governor with the advice and consent of the Senate. (2) An appeal before the Appeals Board shall be heard by a panel of not more than 3 members designated by the Chairman. (b) Each member of the Appeals Board shall: (1) be qualified to serve in a quasi–judicial capacity; and (2) have a thorough knowledge of procurement practices and processes. (c) Before taking office, each appointee to the Appeals Board shall take the oath required by Article I, § 9 of the Maryland Constitution. (d) (1) The term of a member is 5 years. (2) The terms of members are staggered as required by the terms provided for members of the Appeals Board on October 1, 1988. (3) At the end of a term, a member continues to serve until a successor is appointed and qualifies. (4) A member who is appointed after a term has begun serves only for the rest of the term and until a successor is appointed and qualifies. (e) The Governor may remove a member of the Appeals Board for cause.

Md. Code, State Finance and Procurement § 15-209

(a) Each member of the Appeals Board shall devote full time to the duties of office. (b) Each member of the Appeals Board is entitled to: (1) compensation in accordance with the State budget; and (2) reimbursement for expenses under the Standard State Travel Regulations, as provided in the State budget. (c) (1) Subject to paragraphs (2) and (3) of this subsection, the Appeals Board may employ a staff in accordance with the State budget. (2) The Appeals Board shall have at least three more positions than the number of positions authorized in fiscal year 2022. (3) (i) Subject to subparagraph (ii) of this paragraph, the Appeals Board shall employ at least three law clerks. (ii) The Appeals Board shall employ: 1. at least one law clerk who is a graduate of the University of Maryland School of Law; 2. at least one law clerk who is a graduate of the University of Baltimore School of Law; and 3. at least one law clerk who is a graduate of Howard University School of Law.

Md. Code, State Finance and Procurement § 15-210

In accordance with Title 10, Subtitle 1 of the State Government Article, the Appeals Board shall adopt regulations that provide for informal, expeditious, and inexpensive resolution of appeals before the Appeals Board.

Md. Code, State Finance and Procurement § 15-211

(a) The Appeals Board shall have jurisdiction to hear and decide all appeals arising from the final action of a unit: (1) on a protest relating to the formation of a procurement contract, including a violation of § 13–212.1 of this article; or (2) except for a contract claim relating to a lease of real property, on a contract claim by a contractor or a unit concerning: (i) breach; (ii) performance; (iii) modification; or (iv) termination. (b) A decision of the Appeals Board is final, subject to any judicial review.

Md. Code, State Finance and Procurement § 15-212

(a) In connection with a proceeding authorized under this subtitle, the Appeals Board may: (1) administer oaths; (2) certify to all official acts; and (3) at the request of a party to the proceeding: (i) issue subpoenas for the attendance and testimony of witnesses or the production of documents; and (ii) compel the testimony of witnesses. (b) If a person fails to comply with a subpoena or order compelling testimony under this section, on petition of the Appeals Board, a court of competent jurisdiction may pass an order directing compliance with the subpoena or compelling testimony. (c) (1) A person who, under oath, willfully makes a false statement about a matter before the Appeals Board is guilty of perjury. (2) A person who causes another person under oath to make a false statement about a matter before the Appeals Board is guilty of subornation of perjury. (3) A person who commits perjury or subornation of perjury under this section is subject to the penalty provided in §§ 9-101 and 9-102 of the Criminal Law Article.

Md. Code, State Finance and Procurement § 15-215

(a) In this Part III of this subtitle the following words have the meanings indicated. (b) (1) “Contract claim” means a claim that relates to a procurement contract. (2) “Contract claim” includes a claim about the performance, breach, modification, or termination of the procurement contract. (c) “Interested party” means an actual or a prospective bidder, offeror, or contractor that may be aggrieved by the solicitation or award of a contract, or by the protest. (d) (1) “Protest” means a complaint that relates to the formation of a procurement contract. (2) “Protest” includes a complaint about: (i) the qualifications of a bidder or offeror; or (ii) the determination of the successful bidder or offeror.

Md. Code, State Finance and Procurement § 15-216

(a) Title 10, Subtitle 2 of the State Government Article does not apply to the disposition of a protest or a contract claim by: (1) a primary procurement unit; (2) a procurement officer; or (3) a unit. (b) The Appeals Board shall conduct its proceedings in accordance with Title 10, Subtitle 2 of the State Government Article.

Md. Code, State Finance and Procurement § 15-217

(a) (1) A prospective bidder or offeror, a bidder, or an offeror may submit a protest to the procurement officer. (2) A unit or a person who has been awarded a procurement contract may submit a contract claim to the procurement officer. (b) Except as provided in § 15-219 of this subtitle, a protest or contract claim shall be submitted within the time required under regulations adopted by the primary procurement unit responsible for the procurement.

Md. Code, State Finance and Procurement § 15-218

(a) Except as provided under § 15–219 of this subtitle, a procurement officer who receives a protest or a contract claim from a contractor shall comply with this section. (b) (1) On receipt of a protest or contract claim from a contractor, a procurement officer: (i) shall review the substance of the protest or contract claim; (ii) may request additional information or substantiation through an appropriate procedure; (iii) may discuss with interested parties and, if appropriate, may conduct negotiations with the person initiating the protest or contract claim; and (iv) shall comply with any applicable regulations. (2) Unless clearly inappropriate, the procurement officer shall seek the advice of the Office of the Attorney General. (c) (1) Subject to subsection (b) of this section and consistent with the State budget and other applicable laws, the procurement officer shall: (i) resolve the protest or contract claim by agreement of the parties; (ii) wholly or partly deny the protest or contract claim; or (iii) wholly or partly grant the relief sought by the person who submitted the protest or contract claim. (2) The procurement officer promptly shall send the decision in writing to the reviewing authority. (d) Unless otherwise provided by regulation, the decision of the procurement officer shall be reviewed promptly by: (1) the head of the unit; and (2) the head of the principal department or other equivalent unit of which the unit is a part. (e) (1) Except as provided under paragraph (3) of this subsection, the reviewing authority shall approve, disapprove, or modify the decision of the procurement officer within 180 days after receiving the contract claim or a longer period to which the parties agree. (2) The action of the reviewing authority under this subsection shall be the final action of the unit. (3) The reviewing authority may remand the proceeding with instructions to the procurement officer. (4) On remand, the procurement officer shall proceed under subsection (b) of this section in accordance with those instructions. (f) (1) A decision not to pay a contract claim is a final action for the purpose of appeal to the Appeals Board. (2) The failure to reach a decision within the time required under subsection (e) of this section may be deemed, at the option of the contractor, to be a decision not to pay the contract claim.

Md. Code, State Finance and Procurement § 15-219

(a) Except to the extent a shorter period is prescribed by regulation governing differing site conditions, a contractor shall file a written notice of a claim relating to a procurement contract for construction within 30 days after the basis for the claim is known or should have been known. (b) Unless extended by the unit, within 90 days after submitting a notice of a contract claim under a procurement contract for construction, a contractor shall submit to the unit a written explanation that states: (1) the amount of the contract claim; (2) the facts on which the contract claim is based; and (3) all relevant data and correspondence that may substantiate the contract claim. (c) (1) Subject to paragraph (2) of this subsection, the head of the unit engaged in procurement of the construction shall review the contract claim. (2) If the unit is part of a principal department or other equivalent unit, the Secretary of the principal department or the equivalent official shall review the contract claim, unless review has been delegated by regulation to the head of the unit. (d) The person who reviews a contract claim under subsection (c) of this section shall: (1) investigate the contract claim; and (2) give the contractor written notice of a resolution of the contract claim: (i) within 90 days after receiving the contract claim or a longer period to which the parties agree, if the amount of the contract claim is not more than the amount under which the accelerated procedure may be selected before the Appeals Board; or (ii) for any other contract claim, within 180 days after receiving the contract claim or a longer period to which the parties agree. (e) Recovery under a contract claim is not allowed for any expense incurred: (1) more than 30 days before the required submission of a notice of a claim under subsection (a) of this section; or (2) unless the time for submission of a claim is extended under subsection (b) of this section, more than 120 days before the required submission of the claim. (f) (1) If the unit determines that it is responsible for a portion but not all of the amount claimed by the contractor, subject to the terms of the contract, the unit shall pay the undisputed amount. (2) Payment of the undisputed amount: (i) is not an admission of the liability of the unit on the claims; and (ii) does not preclude recovery of the amount paid if it subsequently is determined that the determination of the unit was not correct. (g) (1) A decision not to pay a contract claim is a final action for the purpose of appeal to the Appeals Board. (2) The failure to reach a decision within the time required under subsection (c) of this section may be deemed, at the option of the contractor, to be a decision not to pay the contract claim. (h) At the time of final payment, the unit shall: (1) release the retainage due to the contractor; and (2) pay any interest that: (i) has accrued on the retainage from the time of payment of the semifinal estimate; and (ii) is due and payable to the contractor.

Md. Code, State Finance and Procurement § 15-219.1

§15–219.1. (a) (1) A unit may assert a contract claim against a contractor by sending written notice to the contractor and the procurement officer that states: (i) the basis for the contract claim; (ii) to the extent known, the amount, or the performance or other action, requested by the unit in the contract claim; and (iii) the date by which the contractor is required to provide a written response to the contract claim. (2) On receipt of a contract claim from a unit, a procurement officer: (i) shall review the substance of the contract claim; (ii) may request additional information or substantiation through an appropriate procedure; and (iii) may discuss or, if appropriate, negotiate the contract claim with the unit or contractor. (3) The procurement officer shall proceed under subsection (b) of this section if the contractor fails to respond, provides an inadequate response, or denies the contract claim or the relief sought by the unit in whole or in part. (b) (1) If the contractor and the unit do not resolve the contract claim, the procurement officer shall prepare a proposed decision on the contract claim, including: (i) a description of the contract claim; (ii) references to pertinent contract provisions; (iii) a statement of factual areas of agreement or disagreement; and (iv) a statement in the proposed decision wholly or partly granting or denying the relief sought, with supporting rationale. (2) Unless otherwise provided by regulation, the procurement officer shall submit the contract claim and proposed decision to: (i) the head of the unit; and (ii) the head of the principal department or other equivalent unit of which the unit is a part. (3) (i) The reviewing authority shall approve, modify, or disapprove the proposed decision. (ii) In disapproving a proposed decision, the reviewing authority may remand the contract claim with instructions to the procurement officer. (iii) On remand, the procurement officer shall proceed as required under this subsection and in accordance with the instructions of the reviewing authority. (4) The decision of the reviewing authority is the final action of the unit.

Md. Code, State Finance and Procurement § 15-220

(a) Except for a contract claim related to a lease for real property, a bidder or offeror, a prospective bidder or offeror, a unit, or a contractor may appeal the final action of a unit to the Appeals Board. (b) An appeal under this section shall be filed: (1) for a protest, within 10 days after receipt of the notice of a final action; and (2) for a contract claim, within 30 days after receipt of the notice of a final action.

Md. Code, State Finance and Procurement § 15-221

(a) If a person appeals the decision of a unit about a protest, the Appeals Board shall: (1) give that case priority over other matters not involving protests before the Appeals Board; and (2) decide it expeditiously. (b) (1) For any appeal, the Appeals Board may require each party to file a brief. (2) If briefs are required, the Appeals Board shall establish the order and time limits for filing briefs after consultation with both parties. (c) Except as provided in subsection (d) of this section, in a case before the Appeals Board, a party may obtain discovery about any matter that: (1) is not privileged; and (2) is relevant to the subject matter involved in that case. (d) In an appeal from a decision about a protest, discovery shall be limited to requests for the production of documents unless the Appeals Board determines that extraordinary circumstances require additional limited discovery to avoid substantial unfairness or prejudice. (e) In an appeal from a decision about a contract claim, unless both parties agree to a longer period, the Appeals Board shall issue its final decision within 180 days after the day on which: (1) all briefs have been filed; or (2) if later, the record has been closed.

Md. Code, State Finance and Procurement § 15-221.1

§15–221.1. (a) The Appeals Board may award an interested party the reasonable costs of filing and pursuing a protest, including reasonable attorney’s fees, if: (1) the interested party appeals the final action of an agency on a protest; (2) the Appeals Board sustains the appeal; and (3) the Appeals Board finds that there has been a violation of law or regulation. (b) The Appeals Board shall adopt regulations to implement this section and to determine what constitutes reasonable costs of filing and pursuing a protest.

Md. Code, State Finance and Procurement § 15-221.2

§15–221.2. (a) This section applies to a claim resulting under a contract. (b) The Appeals Board may award to a contractor the reasonable costs of filing and pursuing a claim, including reasonable attorney’s fees, if the Appeals Board finds that the conduct of the unit in processing a contract claim is in bad faith, without substantial justification, or in violation of law. (c) The Appeals Board shall adopt regulations to implement this section.

Md. Code, State Finance and Procurement § 15-222

(a) Notwithstanding any provision of a procurement contract, the Appeals Board may award interest on money that the Appeals Board determines to be due to the unit or the contractor under a contract claim. (b) (1) Subject to paragraph (2) of this subsection, interest may accrue from a day that the Appeals Board determines to be fair and reasonable after hearing all the facts until the day of the decision by the Appeals Board. (2) Interest may not accrue before the procurement officer receives a contract claim from the unit or the contractor. (c) (1) Subject to paragraph (2) of this subsection, an award under a decision by the Appeals Board shall accrue interest until the day on which the award is paid. (2) If an award is reduced as a result of a judicial review of the decision of the Appeals Board, interest shall be paid only on the reduced award. (d) The rate of interest under this section shall be the rate of interest on judgments as provided under § 11-107(a) of the Courts Article.

Md. Code, State Finance and Procurement § 15-223

(a) (1) A decision of the Appeals Board is subject to judicial review in accordance with Title 10, Subtitle 2 of the State Government Article. (2) Any party to an Appeals Board decision, including a unit, may appeal a final decision of the Appeals Board to a court of competent jurisdiction. (b) When a decision about a protest or contract claim has become final and is no longer subject to judicial review, the determination shall be enforceable in the appropriate court.

Md. Code, State Finance and Procurement § 15-226

(a) (1) In this section the following words have the meanings indicated. (2) “Supplier” means a person that has supplied labor or materials to a contractor in the prosecution of work provided for in a State procurement contract. (3) “Undisputed amount” means an amount owed by a contractor to a subcontractor or supplier for which there is no good faith dispute, including any retainage withheld. (b) It is the policy of the State that, for work under a State procurement contract: (1) a contractor shall promptly pay to a subcontractor or supplier any undisputed amount to which the subcontractor or supplier is entitled; and (2) a subcontractor shall promptly pay to a lower tier subcontractor any undisputed amount to which the lower tier subcontractor is entitled. (c) (1) A contractor shall pay a subcontractor or supplier an undisputed amount to which the subcontractor or supplier is entitled within 10 days of receiving a progress or final payment from the State. (2) If a contractor withholds payment from a subcontractor or supplier, within the time period in which payment normally would be made, the contractor shall: (i) notify the subcontractor or supplier in writing and state the reason why payment is being withheld; and (ii) provide a copy of the notice to the procurement officer. (d) (1) If a subcontractor or supplier does not receive a payment within the required time period, the subcontractor or supplier may give written notice of the nonpayment to the procurement officer. (2) The notice shall: (i) indicate the name of the contractor, the project under which the dispute exists, and the amount in dispute; (ii) provide an itemized description on which the amount is based; and (iii) if known, provide an explanation for any dispute concerning payment by the contractor. (e) (1) Within 2 business days of receipt of written notice from a subcontractor or supplier, a representative of the unit designated by the procurement officer shall verbally contact the contractor to ascertain whether the amount withheld is an undisputed amount. (2) If the representative of the unit decides that a part or all of the amount withheld is an undisputed amount, the representative of the unit shall instruct the contractor to pay the subcontractor or supplier the undisputed amount within 3 business days. (3) The representative of the unit shall verbally communicate to the subcontractor or supplier the results of discussions with the contractor. (4) If the contractor is instructed to pay the subcontractor or supplier and the subcontractor or supplier is not paid within the time instructed under paragraph (2) of this subsection, the subcontractor or supplier may report the nonpayment in writing to the procurement officer. (f) (1) If the subcontractor or supplier notifies the procurement officer under subsection (e)(4) of this section that payment has not been made, the representative of the unit shall schedule a meeting to discuss the dispute with the unit’s project manager, the contractor, and the subcontractor or supplier: (i) at a time and location designated by the representative of the unit; but (ii) not later than 10 days after receiving notice from the subcontractor or supplier under subsection (e)(4) of this section. (2) The purpose of the meeting is to establish why the contractor has not paid the subcontractor or supplier in the required time period. (3) The representative of the unit shall require the parties to provide at the meeting any information that the representative believes necessary to evaluate the dispute. (4) If the representative of the unit determines that the contractor is delinquent in payment of an undisputed amount to the subcontractor or supplier, further progress payments to the contractor may be withheld until the subcontractor or supplier is paid. (5) If payment is not paid to the subcontractor or supplier within 7 days after the representative of the unit determines that the contractor is delinquent in paying the subcontractor or supplier under this subsection, the representative shall schedule a second meeting to address the dispute: (i) at a time and location designated by the representative of the unit; but (ii) not later than 5 days after the close of the 7–day period. (6) If, at the completion of the second meeting, the representative of the unit determines that the contractor continues to be delinquent in payments owed to the subcontractor or supplier, the representative: (i) shall order that further payments to the contractor not be processed until payment to the subcontractor is verified; (ii) may order that work under the contract be suspended based on the failure of the contractor to meet obligations under the contract; and (iii) subject to paragraph (7) of this subsection, may require that the contractor pay a penalty to the subcontractor or supplier, in an amount not exceeding $100 per day, from the date that payment was required under subsection (e)(2) of this section. (7) A penalty may not be imposed under paragraph (6)(iii) of this subsection for any period that the representative of the unit determines the subcontractor or supplier was not diligent in reporting nonpayment to the procurement officer. (g) (1) A contractor, a subcontractor, or a supplier may appeal a decision under subsection (f)(6) of this section to the procurement officer. (2) The contractor shall comply with the procurement officer’s decision. (h) An act, failure to act, or decision of a procurement officer or a representative of a unit concerning a payment dispute between a contractor and subcontractor or supplier or between subcontractors under this section may not: (1) affect the rights of the contracting parties under any other provision of law; (2) be used as evidence on the merits of a dispute between the unit and the contractor, the contractor and subcontractor, or contractor and supplier in any other proceeding; or (3) result in liability against or prejudice the rights of the unit. (i) A decision of a procurement officer or a representative of the unit designated by the procurement officer under this section is not subject to judicial review or the provisions of Part III of this subtitle. (j) (1) A unit shall include in each State procurement contract a provision: (i) governing prompt payment to subcontractors; and (ii) requiring inclusion of a similar provision in each subcontract at any tier. (2) The contract provision shall establish procedures and remedies for the resolution of payment disputes similar to the process and remedies prescribed in subsections (c) through (g) of this section.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://mgaleg.maryland.gov/mgawebsite/Laws/StatutesFetched: 10/16/2026