# COMAR Title 21 — State Procurement Regulations

## Subtitle 07 — Contract Terms and Conditions

### Chapter 02 — Mandatory Construction Contract Clauses

**Authority:** State Finance and Procurement Article, §§12-101, 13-216, 13-218, 13-225, 15-226, and 17-801—17-804, Annotated Code of Maryland

**Administrative History:** Effective date: July 1, 1981 (8:13 Md. R. II-5)

**Administrative History:** Regulation .09 amended effective May 6, 1985 (12:9 Md. R. 816)

**Administrative History:** Chapter revised effective January 9, 1989 (15:27 Md. R. 3138)

**Administrative History:** Regulation .02 amended effective July 15, 2019 (46:14 Md. R. 623)

**Administrative History:** Regulation .03 amended effective July 15, 2019 (46:14 Md. R. 623)

**Administrative History:** Regulation .04 amended effective January 2, 2017 (43:26 Md. R. 1449); July 15, 2019 (46:14 Md. R. 623)

**Administrative History:** Regulation .05 amended effective July 15, 2019 (46:14 Md. R. 623)

**Administrative History:** Regulation .05-1 adopted effective October 6, 1997 (24:20 Md. R. 1405)

**Administrative History:** Regulation .05-1E amended effective January 24, 2000 (27:1 Md. R. 78)

**Administrative History:** Regulation .05-2 adopted effective October 2, 2000 (27:19 Md. R. 1730)

**Administrative History:** Regulation .05-2 amended effective July 9, 2001 (28:13 Md. R. 1216); September 18, 2023 (50:18 Md. R. 800); March 3, 2025 (52:4 Md. R. 221)

**Administrative History:** Regulation .05-3 adopted effective July 9, 2001 (28:13 Md. R. 1216)

**Administrative History:** Regulation .06 amended effective July 15, 2019 (46:14 Md. R. 623)

**Administrative History:** Regulation .07 amended effective July 15, 2019 (46:14 Md. R. 623); June 29, 2020 (47:13 Md. R. 643)

**Administrative History:** Regulation .08 amended effective July 15, 2019 (46:14 Md. R. 623)

**Administrative History:** Regulation .09 amended effective July 15, 2019 (46:14 Md. R. 623)

**Administrative History:** Regulation .10 amended effective May 20, 1996 (23:10 Md. R. 733); February 23, 2009 (36:4 Md. R. 355); March 16, 2015 (42:5 Md. R. 488)

**Administrative History:** Regulation .10A amended effective March 11, 2019 (46:5 Md. R. 310); March 3, 2025 (52:4 Md. R. 221)

**Administrative History:** Regulation .11 adopted effective July 15, 2019 (46:14 Md. R. 623)

**Administrative History:** Regulation .12 adopted effective May 17, 2021 (48:10 Md. R. 401)

#### Regulation .01 Application.

*COMAR 21.07.02.01*

A. In addition to the clauses required by this chapter, each construction contract shall include the clauses required by COMAR 21.07.01.

B. If clauses covering the same subject matter are required by COMAR 21.07.01 and this chapter, the clauses set forth in this chapter shall be used in each construction contract.

C. The language of the clauses set forth in this chapter may not be varied.

#### Regulation .02 Changes.

*COMAR 21.07.02.02*

Mandatory provision for all construction contracts:

"Changes

"(1) The procurement officer unilaterally may, at any time, without notice to the sureties, if any, by written order designated or indicated to be a change order, make any change in the work within the general scope of the contract, including but not limited to changes:

#### Regulation .03 Variations in Estimated Quantities.

*COMAR 21.07.02.03*

Mandatory provision for only those construction contracts that contain estimated quantity items:

"Variations in Estimated Quantities

“Where the quantity of a pay item in this contract is an estimated quantity and where the actual quantity of such pay item varies more than twenty-five percent (25%) above or below the estimated quantity stated in this contract, an equitable adjustment in the contract price shall be made upon demand of either party. The equitable adjustment shall be based upon any increase or decrease in costs due solely to the variation above one hundred twenty-five percent (125%) or below seventy-five percent (75%) of the estimated quantity. If the quantity variation is such as to cause an increase in the time necessary for completion, the procurement officer shall, upon receipt of a written request for an extension of time within ten (10) days from the beginning of the delay, or within a further period of time which may be granted by the procurement officer before the date of final settlement of the contract, ascertain the facts and make the adjustment for extending the completion date as in the procurement officer’s judgment the findings justify.”

#### Regulation .04 Suspension of Work.

*COMAR 21.07.02.04*

Mandatory provision for all construction contracts:

"Suspension of Work

"(1) The procurement officer unilaterally may order the Contractor in writing to suspend, delay, or interrupt all or any part of the work for a period of time as the procurement officer may determine to be appropriate for the convenience of the State.

"(2) If the performance of all or any part of the work is for an unreasonable period of time, suspended, delayed, or interrupted by an act of the procurement officer in the administration of this contract, or by the procurement officer’s failure to act within the time specified in this contract (or if no time is specified, within a reasonable time), an adjustment shall be made for any increase in the cost of performance of this contract (excluding profit) necessarily caused by an unreasonable suspension, delay, or interruption and the contract modified in writing accordingly. However, no adjustment shall be made under this clause for any suspension, delay, or interruption to the extent(1) that performance would have been so suspended, delayed, or interrupted by any other cause, including the fault or negligence of the Contractor or (2) for which an equitable adjustment is provided for or excluded under any provision of this contract.

“(3) No claim under this clause shall be allowed(1) for any costs incurred more than 20 days before the Contractor shall have notified the procurement officer in writing of the act or failure to act involved (but this requirement shall not apply as to a claim resulting from a suspension order), and (2) unless the claim, in an amount stated, is asserted in writing as soon as practicable after the termination of a suspension, delay, or interruption, but not later than the date of final payment under the contract.”

#### Regulation .05 Differing Site Conditions.

*COMAR 21.07.02.05*

Mandatory provision for all construction contracts:

"Differing Site Conditions

"(1) The Contractor shall promptly, and before such conditions are disturbed, notify the procurement officer in writing of:(1) subsurface or latent physical conditions at the site differing materially from those indicated in this contract, or (2) unknown physical conditions at the site of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inhering in work of the character provided for in this contract. The procurement officer shall promptly investigate the conditions, and if the procurement officer finds that such conditions do materially so differ and cause an increase or decrease in the Contractor’s cost of, or the time required for, performance of any part of the work under this contract, whether or not changed as a result of such conditions, an equitable adjustment shall be made and the contract modified in writing accordingly.

"(2) No claim of the Contractor under this clause shall be allowed unless the Contractor has given the notice required in paragraph(1) of this clause; provided, however, the time prescribed therefor may be extended by the State.

“(3) No claim by the Contractor for an equitable adjustment hereunder shall be allowed if asserted after final payment under this contract.”

#### Regulation .05-1 Disputes.

*COMAR 21.07.02.05-1*

Mandatory provision for all construction contracts:

“A. This contract is subject to the provisions of State Finance and Procurement Article, Title 15, Subtitle 2, Annotated Code of Maryland, and COMAR 21.10.

“B. Except as otherwise provided in this contract or by law, all disputes arising under or as a result of a breach of this contract that are not disposed of by mutual agreement shall be resolved in accordance with this clause.

“C. As used herein, claim means a written demand or assertion by one of the parties seeking, as a legal right, the payment of money, adjustment or interpretation of contract terms, or other relief, arising under or relating to this contract. A voucher, invoice, or request for payment that is not in dispute when submitted is not a claim under this clause. However, if the submission subsequently is not acted upon in a reasonable time, or is disputed as to liability or amount, it may be converted to a claim for the purpose of this clause.

“D. Within 30 days after contractor knows or should have known of the basis for a claim relating to this contract, contractor shall file a written notice of claim with the procurement officer.

“E. Contemporaneously with, or within 90 days after, the filing of a notice of claim, contractor shall submit the written claim to the procurement officer. If contractor so requests, the procurement officer, on conditions the procurement officer deems satisfactory to the unit, may extend the time in which contractor must submit the claim. An example of when a procurement officer may grant an extension includes situations in which the procurement officer finds that a contemporaneous or timely cost quantification following the filing of the notice of claim is impossible or impractical.

“F. The claim shall set forth all the facts surrounding the controversy. Contractor, at the discretion of the procurement officer, may be afforded an opportunity to be heard and to offer evidence in support of the claim.

“G. The procurement officer shall mail or deliver written notification of the final decision within:

“(1) 90 days after the procurement officer receives the claim if the claim is an amount for which the Appeals Board accelerated procedure, set forth in COMAR 21.10.06.12, may be used;

“(2) 180 days after the procurement officer receives the claim for a claim not covered under G(1) of this clause; or

“(3) A longer period that the procurement officer and contractor agree to in writing.

“H. The final decision may award a contract claim only for those expenses incurred not more than 30 days before contractor was initially required to have filed the notice of claim.

“I. The procurement officer's decision is the final action of the agency. If the procurement officer fails to render a final decision within the time required, contractor may deem the failure to be a final decision not to pay the claim.

“J. If the final decision grants the claim in part and denies the claim in part, the agency shall pay contractor the undisputed amount. Payment of the partial claim is not an admission of liability by the agency and does not preclude the agency from recovering the amount paid if a subsequent determination modifies the final decision.

“K. Contractor may file a written appeal with the Maryland State Board of Contract Appeals within 30 days of receipt of notice of the decision.

“L. Pending resolution of a claim, contractor shall proceed diligently with the performance of the contract in accordance with the procurement officer's decision.”

#### Regulation .05-2 Prompt Payment of Subcontractors.

*COMAR 21.07.02.05-2*

Mandatory provisions for all construction contracts:

#### Regulation .05-3 Retainage.

*COMAR 21.07.02.05-3*

Mandatory provisions for all construction contracts:

#### Regulation .06 Site Investigation.

*COMAR 21.07.02.06*

Mandatory provision for all construction contracts:

"Site Investigation

“The Contractor acknowledges that the Contractor has investigated and satisfied itself as to the conditions affecting the work, including but not restricted to those bearing upon transportation, disposal, handling and storage of materials, availability of labor, water, electric power, roads and uncertainties of weather, river stages, tides or similar physical conditions at the site, the conformation and conditions of the ground, the character of equipment and facilities needed preliminary to and during prosecution of the work. The Contractor further acknowledges that the Contractor has satisfieditself as to the character, quality and quantity of surface and subsurface materials or obstacles to be encountered insofar as this information is reasonably ascertainable from an inspection of the site, including all exploratory work done by the State, as well as from information presented by the drawings and specifications made a part of this contract. Any failure by the Contractor to acquaint itself with the available information may not relieve the Contractor from responsibility for estimating properly the difficulty or cost of successfully performing the work. The State assumes no responsibility for any conclusions or interpretations made by the Contractor on the basis of the information made available by the State.”

#### Regulation .07 Default, Delay and Time Extensions.

*COMAR 21.07.02.07*

Mandatory provision for all construction contracts:

“Termination for Default — Damages for Delay — Time Extensions

“(1) If the Contractor refuses or fails to prosecute the work, or any separable part thereof, with such diligence as shall insure its completion within the time specified in this contract, or any extension thereof, fails to complete said work within this time, or fails to provide any required annual and renewable bond 30 days prior to expiration of the current bond then in effect, the State may, by written notice to the Contractor, terminate the Contractor’s right to proceed with the work or the part of the work as to which there has been delay. In this event the State may take over the work and prosecute the same to completion, by contract or otherwise, and may take possession of and utilize in completing the work the materials, appliances, and plant as may be on the site of the work and necessary therefor. Whether or not the Contractor’s right to proceed with the work is terminated, the Contractor and its sureties shall be liable for any damage to the State resulting from the Contractor’s refusal or failure to complete the work within the specified time.

“(2) If fixed and agreed liquidated damages are provided in the contract and if the State so terminates the Contractor's right to proceed, the resulting damage shall consist of such liquidated damages until a reasonable time as may be required for final completion of the work together with any increased costs occasioned the State in completing the work.

“(3) If fixed and agreed liquidated damages are provided in the contract and if the State does not so terminate the Contractor's right to proceed, the resulting damage shall consist of these liquidated damages until the work is completed or accepted.

“(4) The Contractor's right to proceed may not be so terminated nor the contractor charged with resulting damages if:

#### Regulation .08 Liquidated Damages.

*COMAR 21.07.02.08*

Mandatory provision for:

A. All contracts with certified MBE participation goals, in accordance with COMAR 21.11.03.10E; and

B. All construction contracts unless the agency head determines that the exclusion of the clause is in the best interest of the State:

#### Regulation .09 Termination for Convenience.

*COMAR 21.07.02.09*

Mandatory provision for all construction contracts:

"Termination for Convenience of the State

“(1) The performance of work under this contract may be terminated by the State in accordance with this clause in whole, or from time to time in part, whenever the procurement officer shall determine that such termination is in the best interest of the State. Any such termination shall be effected by delivery to the Contractor of a Notice of Termination specifying the extent to which performance of work under the contract is terminated, and the date upon which such termination becomes effective.

“(2) After receipt of a Notice of Termination, and except as otherwise directed by the procurement officer, the Contractor shall:

#### Regulation .10 Performance and Payment Bonds.

*COMAR 21.07.02.10*

Mandatory provision for all construction contracts exceeding $100,000:

#### Regulation .11 Performance and Payment Bonds — Multiyear Annual and Renewable.

*COMAR 21.07.02.11*

For full text of Regulation 21.07.02.11, at end of chapter (FORM AT END OF CHAPTER)

#### Regulation .12 Payment of Employee Health Care Expenses.

*COMAR 21.07.02.12*

A. The following is a mandatory provision for all State-funded construction contracts awarded after a competitive sealed bid: