Title 15. Procurement Contract Administration and Dispute Resolution — Subtitle 2. Dispute Resolution

The Appeals Board consists of 6 members appointed by the Governor with the advice and consent of the Senate.

An appeal before the Appeals Board shall be heard by a panel of not more than 3 members designated by the Chairman.

be qualified to serve in a quasi–judicial capacity; and

have a thorough knowledge of procurement practices and processes.

The term of a member is 5 years.

The terms of members are staggered as required by the terms provided for members of the Appeals Board on October 1, 1988.

At the end of a term, a member continues to serve until a successor is appointed and qualifies.

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.

compensation in accordance with the State budget; and

reimbursement for expenses under the Standard State Travel Regulations, as provided in the State budget.

Subject to paragraphs (2) and (3) of this subsection, the Appeals Board may employ a staff in accordance with the State budget.

The Appeals Board shall have at least three more positions than the number of positions authorized in fiscal year 2022.

on a protest relating to the formation of a procurement contract, including a violation of § 13–212.1 of this article; or

except for a contract claim relating to a lease of real property, on a contract claim by a contractor or a unit concerning:

administer oaths;

certify to all official acts; and

at the request of a party to the proceeding:

A person who, under oath, willfully makes a false statement about a matter before the Appeals Board is guilty of perjury.

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.

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.

“Contract claim” means a claim that relates to a procurement contract.

“Contract claim” includes a claim about the performance, breach, modification, or termination of the procurement contract.

“Protest” means a complaint that relates to the formation of a procurement contract.

“Protest” includes a complaint about:

a primary procurement unit;

a procurement officer; or

a unit.

A prospective bidder or offeror, a bidder, or an offeror may submit a protest to the procurement officer.

A unit or a person who has been awarded a procurement contract may submit a contract claim to the procurement officer.

On receipt of a timely protest, a procurement officer:

Unless clearly inappropriate, the procurement officer shall seek the advice of the Office of the Attorney General on any legal issues raised in the protest.

Subject to subsection (b) of this section and consistent with the State budget and other applicable laws, the procurement officer shall:

The procurement officer promptly shall send the decision in writing to the reviewing authority.

the head of the unit or the head’s designee; and

the head of the principal department or other equivalent unit of which the unit is a part or the head’s designee.

A decision to deny a protest is a final action for the purpose of appeal to the Appeals Board.

The failure to issue a decision or issue a written notice of the anticipated decision date on the protest within 90 days after receipt may be deemed, at the sole option of the protestor, to be a decision to deny the protest.

for requests for equitable adjustments, the later of:

for other claims, the basis for the claim is known or should have been known.

the amount of the contract claim;

the facts on which the contract claim is based; and

all relevant data and correspondence that may substantiate the contract claim.

On receipt of a timely contract claim from a contractor, a procurement officer:

Unless clearly inappropriate, the procurement officer shall seek the advice of the Office of the Attorney General on any legal issues.

resolve the contract claim by agreement of the parties;

wholly or partly deny the contract claim; or

wholly or partly grant the relief sought by the claimant.

Except as provided under paragraph (3) of this subsection, for a contract other than a construction contract, 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.

The action of the reviewing authority under this subsection shall be the final action of the unit.

Subject to paragraph (2) of this subsection, for a construction contract, the head of the unit engaged in procurement or the head’s designee shall review the contract claim and the decision of the procurement officer.

If the unit is part of a principal department or other equivalent unit, the Secretary of the principal department or the equivalent official or the Secretary’s designee or the official’s designee shall review the contract claim and the decision of the procurement officer, unless review has been delegated by regulation to the head of the unit.

investigate the contract claim; and

give the contractor written notice of a resolution of the contract claim:

more than 60 days before the required submission of a notice of a claim under subsection (a) of this section; or

unless the time for submission of a claim is extended under subsection (b) of this section, more than 150 days before the required submission of the claim.

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.

Payment of the undisputed amount:

the claim is made in good faith;

all supporting data is accurate and complete; and

the amount requested accurately reflects the contract claim for which the person believes the procurement agency is liable.

release the retainage due to the contractor; and

pay any interest that:

A unit may assert a contract claim against a contractor by sending written notice to the contractor and the procurement officer that states:

On receipt of a contract claim from a unit, a procurement officer:

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.

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:

Unless otherwise provided by regulation, the procurement officer shall submit the contract claim and proposed decision to:

The decision of the reviewing authority is the final action of the unit.

for a protest, within 10 days after receipt of the notice of a final action; and

for a contract claim, within 30 days after receipt of the notice of a final action.

give that case priority over other matters not involving protests before the Appeals Board; and

decide it expeditiously.

For any appeal, the Appeals Board may require each party to file a brief.

If briefs are required, the Appeals Board shall establish the order and time limits for filing briefs after consultation with both parties.

is not privileged; and

is relevant to the subject matter involved in that case.

all briefs have been filed; or

if later, the record has been closed.

the interested party appeals the final action of an agency on a protest;

the Appeals Board sustains the appeal; and

the Appeals Board finds that there has been a violation of law or regulation.

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.

Interest may not accrue before the procurement officer receives a contract claim from the unit or the contractor.

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.

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.

A decision of the Appeals Board is subject to judicial review in accordance with Title 10, Subtitle 2 of the State Government Article.

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.

In this section the following words have the meanings indicated.

“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.

“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.

a contractor shall promptly pay to a subcontractor or supplier any undisputed amount to which the subcontractor or supplier is entitled; and

a subcontractor shall promptly pay to a lower tier subcontractor any undisputed amount to which the lower tier subcontractor is entitled.

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.

If a contractor withholds payment from a subcontractor or supplier, within the time period in which payment normally would be made, the contractor shall:

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.

The notice shall:

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.

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.

The representative of the unit shall verbally communicate to the subcontractor or supplier the results of discussions with the contractor.

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.

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:

The purpose of the meeting is to establish why the contractor has not paid the subcontractor or supplier in the required time period.

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.

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.

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:

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:

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.

A contractor, a subcontractor, or a supplier may appeal a decision under subsection (f)(6) of this section to the procurement officer.

The contractor shall comply with the procurement officer’s decision.

affect the rights of the contracting parties under any other provision of law;

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

result in liability against or prejudice the rights of the unit.

A unit shall include in each State procurement contract a provision:

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.