# COMAR Title 21 — State Procurement Regulations

## Subtitle 06 — Contract Formation and Award

### Chapter 09 — Invoicing, Payment, and Interest on Late Payments

**Authority:** State Finance and Procurement Article, §§15-101—15-105, Annotated Code of Maryland

**Administrative History:** Effective date: January 2, 2017 (43:26 Md. R. 1449)

**Administrative History:** Regulation .01 amended effective September 18, 2023 (50:18 Md. R. 800)

#### Regulation .01 Definitions.

*COMAR 21.06.09.01*

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

  (1) “Late payment” means any amount that is due and payable by law under a written procurement contract, without deferral, delay, or set-off under COMAR 21.02.07.03, and remains unpaid more than 37 days after an agency receives a  proper invoice.

  (2) “Payment” includes all required processing and authorization by the Comptroller of the Treasury, as provided under COMAR 21.02.07, and may be deferred, delayed, or set-off as applicable under COMAR 21.02.07.03.

  (3) “Proper invoice” means a bill, written document, or electronic transmission, readable by the agency, provided by a vendor requesting an amount that is due and payable by law under a written procurement contract for property received or services rendered that meets the requirements of Regulation .02 of this chapter.

#### Regulation .02 Required Invoice Documentation.

*COMAR 21.06.09.02*

A Proper invoice, required as payment documentation, must include the following information, without error:

A. The contractor’s federal employer’s identification number or Social Security number;

B. The procurement contract or purchase order number or another adequate description of the procurement contract; and

C. Any documentation required by regulation or the procurement contract.

#### Regulation .03 Receipt of Invoices.

*COMAR 21.06.09.03*

For the purposes of determining a payment due date and the date on which interest will begin to accrue if a payment is late, an invoice shall be deemed to be received:

A. For invoices that are mailed, when a proper invoice is received by the agency, as of the date the agency annotates the invoice with the date and time of receipt; or

B. For invoices electronically transmitted, on the date the transmission is received by the agency, or the next business day if received after 5 p.m. Eastern Time.

#### Regulation .04 Review of Invoices.

*COMAR 21.06.09.04*

Upon receipt of an invoice, an agency shall use the following procedures:

A. Each invoice will be reviewed by the agency as soon as practicable after receipt, but no later than 5 business days after receipt, to determine whether the invoice is a proper invoice as defined in Regulation .01 of this chapter.

B. When the agency receives the invoice, the agency shall mark the invoice with the date the invoice was received.

C. Once the agency determines the invoice is proper, the agency shall submit the invoice to the Comptroller for payment within one business day after the determination.

D. If an agency determines the invoice is not a proper invoice, the agency shall notify the vendor of all defects that prevent processing and specify all reasons why the invoice is not proper within two business days after the determination. It is the responsibility of the vendor to submit a corrected invoice.

E. Media which produce tangible recordings of information may be used by agencies to expedite the payment process, rather than delaying the process by requiring original paper documents. Agencies shall provide adequate safeguards and controls to ensure the integrity of the data and to prevent duplicate processing.

F. Failure to comply with this regulation does not constitute a late payment as that term is defined in this chapter.

#### Regulation .05 Payment Period.

*COMAR 21.06.09.05*

A. Unless payment is deferred, delayed, or set-off under COMAR 21.02.07.03, payment under a procurement contract shall be made within 30 days:

  (1) After the day on which the payment becomes due under the procurement contract; or

  (2) If later, after the day on which the agency receives a proper invoice.

B. Payment will be considered to be made on the settlement date for an electronic funds transfer payment or the mailing date of the check for a check payment.

C. Payments falling due on a weekend, State holiday, or federal holiday may be made on the following business day without incurring late payment interest penalties.

#### Regulation .06 Interest on Late Payments.

*COMAR 21.06.09.06*

A. The State shall pay interest on late payments as defined in Regulation .01 of this chapter at the rate of 9 percent per annum if:

  (1) The vendor submits an invoice for the late payment interest within 30 days after the date of the State’s payment of the amount on which the interest accrued; and

  (2) A contract claim has not been filed under State Finance and Procurement Article, Title 15, Subtitle 2, Annotated Code of Maryland.

B. The State is not liable for interest:

  (1) Accruing more than one year after the 31st day after the agency receives the proper invoice; or

  (2) On any amount representing unpaid interest.