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<section article="gsf" article_name="State Finance and Procurement" number="15-112" title_number="15" title_name="Procurement Contract Administration and Dispute Resolution" subtitle_number="1" subtitle_name="Procurement Contract Administration">
  <level label="a">
    <level label="1">
      <level label="i">
        <text>Except as provided in subparagraph (ii) of this paragraph, this section applies to State procurement contracts for:</text>
        <level label="1">
          <text>construction;</text>
        </level>
        <level label="2">
          <text>information processing equipment, cloud computing services, and associated services; and</text>
        </level>
        <level label="3">
          <text>in accordance with Title 3.5, Subtitle 3 of this article, information technology system and cybersecurity upgrades and modernization.</text>
        </level>
      </level>
      <level label="ii">
        <text>This section does not apply to State procurement contracts for public school construction or public school capital improvements.</text>
      </level>
    </level>
    <level label="2">
      <text>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.</text>
    </level>
  </level>
  <level label="b">
    <level label="1">
      <text>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 any changes in State law or regulation or with the terms of the contract, on:</text>
      <level label="i">
        <text>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;</text>
      </level>
      <level label="ii">
        <text>a force account;</text>
      </level>
      <level label="iii">
        <text>a construction change directive; or</text>
      </level>
      <level label="iv">
        <text>a time and materials basis.</text>
      </level>
    </level>
    <level label="2">
      <text>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:</text>
      <level label="i">
        <text>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;</text>
      </level>
      <level label="ii">
        <text>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</text>
      </level>
      <level label="iii">
        <text>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.</text>
      </level>
    </level>
    <level label="3">
      <level label="i">
        <text>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.</text>
      </level>
      <level label="ii">
        <text>After work is completed, a unit shall:</text>
        <level label="1">
          <text>determine the actual quantity used to complete the contract; and</text>
        </level>
        <level label="2">
          <text>if necessary, issue a final adjustment change order to the contractor.</text>
        </level>
      </level>
    </level>
  </level>
  <level label="c">
    <text>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.</text>
  </level>
  <level label="d">
    <text>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.</text>
  </level>
  <level label="e">
    <text>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.</text>
  </level>
  <level label="f">
    <level label="1">
      <text>On or before December 31, 2016, each unit shall issue guidelines for the unit’s change order process.</text>
    </level>
    <level label="2">
      <text>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.</text>
    </level>
  </level>
  <level label="g">
    <text>A provision of this section has effect only to the extent that the provision does not conflict with federal law or regulation.</text>
  </level>
</section>
