EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0507*
SENATE BILL 507
P2 EMERGENCY BILL 2lr2248
By: Senators Salling, Bailey, and Ready
Introduced and read first time: January 28, 2022
Assigned to: Budget and Taxation
A BILL ENTITLED
AN ACT concerning 1
Procurement – Construction Contracts – Contract Modification Clause 2
FOR the purpose of requiring a procurement contract for construction to include a clause 3
providing for contract modification when there is a substantial increase in the price 4
of materials required to complete the contract, as determined by the unit, due to 5
certain factors; and generally relating to contract modifications for construction 6
contracts. 7
BY repealing and reenacting, with amendments, 8
Article – State Finance and Procurement 9
Section 13–218 10
Annotated Code of Maryland 11
(2021 Replacement Volume) 12
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 13
That the Laws of Maryland read as follows: 14
Article – State Finance and Procurement 15
13–218. 16
(a) Each procurement contract shall include clauses covering: 17
(1) termination for default; 18
(2) termination wholly or partly by the State for its convenience if the head 19
of the primary procurement unit determines that termination is appropriate; 20
(3) variations that occur between estimated and actual quantities of work 21
in a procurement contract; 22
2 SENATE BILL 507
(4) liquidated damages, as appropriate; 1
(5) specified excuses for nonperformance; 2
(6) except for real property leases, the unilateral right of the State to order 3
in writing: 4
(i) changes in the work, if the changes are within the scope of the 5
procurement contract; and 6
(ii) a temporary stop or delay in performance; 7
(7) the obligation of the contractor to comply with the political contribution 8
reporting requirements under Title 14 of the Election Law Article, to which the contractor 9
may be subject as required under § 17–402 of this article; and 10
(8) nonvisual access for information technology as required under § 11
3A–312 of this article. 12
(b) In addition to the clauses required under subsection (a) of this section, a 13
procurement contract for construction shall include: 14
(1) SUBJECT TO THE REQUI REMENTS OF SUBSECTIO N (E) OF THIS 15
SECTION, A CLAUSE PROVIDING F OR CONTRACT MODIFICATION WH EN THERE IS A 16
SUBSTANTIAL INCREASE IN THE PRICE OF MATE RIALS REQUIRED TO COMPLETE THE 17
CONTRACT, AS DETERMINED BY THE PROCURING UNIT , DUE TO: 18
(I) DELAYED NOTICE OF CO MMENCEMENT BY THE UN IT FOR 19
ANY REASON; 20
(II) ACTS OR OMISSIONS BY THE UNIT; 21
(III) CHANGES IN THE WORK OR THE SEQUENCING OF THE WORK 22
ORDERED BY THE UNIT OR ARISING FROM DECI SIONS OF THE UNIT TH AT IMPACT 23
THE TIME OF PERFORMA NCE OF THE WORK ; 24
(IV) ENCOUNTERING HAZARDO US MATERIALS OR CONC EALED 25
OR UNKNOWN CONDITI ONS; 26
(V) DELAY AUTHORIZED BY THE UNIT PENDING DIS PUTE 27
RESOLUTION OR SUSPEN SION BY THE UNIT; OR 28
(VI) FORCE MAJEURE EVENTS , INCLUDING AN EPIDEMI C OR A 29
PANDEMIC; 30
SENATE BILL 507 3
(2) a clause providing for contract modification if the condition of a site 1
differs from the condition described in the specifications; and 2
[(2)] (3) a clause covering the requirements for notice of contract claims, 3
submission of contract claims, and resolution of contract claims under § 15–219 of this 4
article. 5
(c) Each procurement contract shall include a clause that gives to the parties 6
notice that preexisting regulations apply to the procurement contract in accordance with § 7
11–206 of this article. 8
(d) At any time after the parties enter into a procurement contract they may 9
include additional clauses in the procurement contract, by consent, without consideration. 10
(e) A clause required under this section for contract modification of or change 11
orders to a procurement contract for construction shall: 12
(1) make each contract modification or change order that affects the price 13
of the procurement contract subject to: 14
(i) prior written approval from the unit and any other person 15
responsible for the procurement contract; and 16
(ii) prior certification by the fiscal authority responsible for the unit 17
about: 18
1. the availability of money; and 19
2. the effect of the contract modification or change order on 20
the project budget or the total construction cost; and 21
(2) prohibit the contract modification or change order if the certification by 22
the fiscal authority discloses that the contract modification or change order will increase 23
the cost beyond budgeted and available money, unless: 24
(i) sufficient additional money is made available; or 25
(ii) the scope of the project is adjusted to allow completion within the 26
project budget. 27
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall be construed to 28
apply only prospectively and may not be applied or interpreted to have any effect on or 29
application to any construction contract executed before the effective date of this Act. 30
SECTION 3. AND BE IT FURTHER ENACTED, That this Act is an emergency 31
measure, is necessary for the immediate preservation of the public health or safety, has 32
been passed by a yea and nay vote supported by three–fifths of all the members elected to 33 4 SENATE BILL 507
each of the two Houses of the General Assembly, and shall take effect from the date it is 1
enacted. 2