Md. Code Regs. 21.06.07.09

Current through Register Vol. 51, No. 22, November 1, 2024

Section 21.06.07.09 - Bid Security

A. General.

(1) Solicitations on all State construction contracts when the contract is expected to exceed $100,000 require the submission of bid security in an amount equal to at least 5 percent of the amount of the bid or price proposal except that, for bids stating a rate but not a total cost, the bid bond shall be in an amount as determined by the procurement officer. Bid security or evidence of the posting of bid security shall be submitted with the bid or proposal. Bid bonds may be required for any other procurement over $50,000, as determined by the procurement officer. If a contractor fails to accompany its bid with the required bid security, the bid shall be considered nonresponsive and rejected except as provided by §§B and D of this regulation.

(2) A procurement officer may require a bid security for a bid or proposal for services, supplies, maintenance, or construction-related services if the contract is expected to exceed $50,000. The procurement officer shall set the amount of the security.

B. Failure to Comply. If bid security is provided by a bidder in an amount less than that required by this regulation, the bid shall be rejected as nonresponsive, unless the procurement officer determines that the deficiency in the amount of security provided is insubstantial and acceptance is in the best interests of the State, and that:

(1) Only one bid or proposal was received, and there is insufficient time to rebid the contract;

(2) The bid security became inadequate as a result of the correction of a mistake in the bid or proposal, or as a result of a modification in the bid or proposal in accordance with applicable regulations, and the bidder or offeror increased the amount of bid security to required limits within 48 hours after the correction or modification; or

(3) After consideration of the risks involved and the difference between the lowest bid and the next lowest bid, fiscal advantage could reasonably be expected to accrue to the State from acceptance of the lowest bid.

C. Withdrawal of Bid or Proposal Before Award. If a bidder or offeror is permitted to withdraw a bid or proposal before award because of a mistake in the bid or proposal, action may not be taken against the bid security. Otherwise, action may be taken against the bid security of a bidder or offeror that withdraws a bid or offer.

D. Forms of Bid Bonds.

(1) The preferred form of a bid bond is as follows:

BID BOND

Bond No.

We, ___________ as Principal, hereinafter called the Principal, and ________________, a corporation duly organized under the laws of the State of _____________, as Surety, hereinafter called the Surety, are held and firmly bound unto the State of Maryland, hereinafter called "State", for the sum of ________ for the payment of which sum, the Principal and the Surety bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents.

WHEREAS, the Principal has submitted a bid for (Identify project by number and brief description):

NOW, THEREFORE, if the Principal, upon acceptance by the State of its bid identified above, within the period specified therein for acceptance (ninety (90) days, if no period is specified), shall execute such further contractual documents, if any, and give such bond(s) as may be required by the terms of the bid as accepted within the time specified (ten (10) days if no period is specified) after receipt of the forms, or in the event of failure so to execute such further contractual documents and give such bonds, if the Principal shall pay the State the difference not to exceed the penalty hereof between the amount specified in Principal's bid and such larger amount for which the State may in good faith contract with another party to perform the work covered by said bid, then the above obligation shall be void and of no effect.

The Surety executing this instrument hereby agrees that its obligation shall not be impaired by any extension(s) of the time for acceptance of the bid that the Principal may grant to the State, notice of which extension(s) to the Surety being hereby waived; provided that such waiver of notice shall apply only with respect to extensions aggregating not more than ninety (90) calendar days in addition to the period originally allowed for acceptance of the bid.

In Presence of: Witness	Individual Principal ___________________ (Name)
________________ as to	_________________ (SEAL)
In Presence of: Witness	Partnership Principal ___________________ (Name)
________________ as to	________________(SEAL) Partner
________________ as to	________________ (SEAL) Partner
________________ as to	________________ (SEAL) Partner
Attest:	Corporate Principal
________________	______________________ (Name of Corporation) AFFIX
Secretary	By: ________________ President SEAL
________________ (Surety) AFFIX
Attest
________________	By: ________________ Attorney-in-fact SEAL

Bonding Agent's Name __________________________________

Agent's Address _______________________________________

Approved as to form and legal sufficiency this __ day of________, 20__

Assistant Attorney General __________________________________

(2) Unless prohibited by the solicitation, a bid bond on a form other than the preferred form under §D(1) of this regulation may be accepted if the form provides that the principal and the surety shall be liable under the bond in an amount at least equal to the difference between the amount of the principal's bid and such other amount or amounts for which the obligee may contract with another party to perform as required by the solicitation for which the principal's bid was submitted.

(3) Extensions of Time for Acceptance of Bid.

(a) In this subsection, "acceptance period" means the period during which bids remain irrevocable as provided in the solicitation or in COMAR 21.05.02.19A.

(b) If a solicitation requires a bid bond to contain consent of the surety to an extension of the acceptance period and the bid bond fails to meet that requirement, the bid:

(i) May not be rejected as nonresponsive on that basis alone during the acceptance period; and

(ii) Shall be rejected as nonresponsive if written consent to an extension has not been provided by the bidder and the surety during the acceptance period or an additional period of time set by the procurement officer which is approved by the head of the procurement agency.

(4) Authenticity and Enforceability of Powers of Attorney.

(a) Any person signing a bid bond as an attorney-in-fact shall include with the bid bond evidence of authority to bind the surety.

(b) An original, or a photocopy or facsimile of an original, power of attorney is sufficient evidence of such authority.

(c) For purposes of this section, verified electronic, mechanically-applied and printed signatures, seals and dates on the power of attorney shall be considered original signatures, seals and dates, without regard to the order in which they were affixed.

(d) The procurement officer shall:

(i) Treat the failure to provide a signed and dated power of attorney at the time of bid opening as a matter of responsiveness; and

(ii) Treat questions regarding the authenticity and enforceability of the power of attorney at the time of bid opening as a matter of responsibility. These questions are handled after bid opening.

(e) If the procurement officer contacts the surety to validate the power of attorney, the contracting officer shall document the file providing, at a minimum, the following information:

(i) Name of person contacted;

(ii) Date and time of contact; and

(iii) Response of the surety.

(f) If, upon investigation, the surety declares the power of attorney to have been valid at the time of bid opening, the procurement officer may require correction of any technical error with the power of attorney.

(g) If, upon investigation, the surety declares the power of attorney to have been invalid, the procurement officer shall determine the bid to be nonresponsive and not allow the bidder to substitute a replacement power of attorney or a replacement surety.

Md. Code Regs. 21.06.07.09

Regulation .09 amended effective 42:5 Md. R. 488, eff.3/16/2015 ; amended effective 43:26 Md. R. 1449, eff. 1/2/2017