Md. Code Regs. 21.10.08.06

Current through Register Vol. 51, No. 24, December 2, 2024

Section 21.10.08.06 - Remedies

A. If the representative of the unit determines that the contractor is delinquent in payment of an undisputed amount to the subcontractor, the representative may order that further progress payments to the contractor that withheld payment shall be withheld until the subcontractor is paid.

B. If payment is not paid to the subcontractor within 7 business days after the representative of the unit determines that the contractor is delinquent in paying the subcontractor under §A of this regulation, the representative shall schedule a second meeting to address the dispute:

(1) At a time and location designated by the representative of the unit; but

(2) Not later than 5 business days after the close of the 7-day period.

C. 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, the representative:

(1) Shall order that further payments to the contractor not be processed until payment to the subcontractor is verified;

(2) May order that all or some of the work under the contract or subcontract be suspended without affecting the contractually required completion date for the work, based on the failure of the contractor to meet obligations under the contract;

(3) If the contractor is not a prime contractor, may order that the prime contractor act as a representative of the unit and:

(a) Pay or cause payment of an amount determined as undisputed, together with any penalty assessed against the contractor under §C(4) of this regulation, to be made to the subcontractor from monies otherwise due or that may become due under the State contract for the contractor's work;

(b) From monies otherwise due or that may become due under the State contract for the contractor's work, place a payment for an undisputed amount and any penalty in an interest-bearing escrow account rather than making the payment to the subcontractor; or

(c) Take other or further actions to resolve the dispute; and

(4) Subject to §D of this regulation, may order that the contractor pay a penalty to the subcontractor, in an amount not exceeding $100 per day, from the date that payment was required under Regulation .04B of this chapter.

D. A penalty may not be imposed under §C(3) of this regulation for any period that the representative of the unit determines the subcontractor was not diligent in reporting nonpayment to the procurement officer.

E. A prime contractor and each contractor to whom an instruction or order is directed under this regulation shall comply with the instruction or order.

Md. Code Regs. 21.10.08.06

Regulation .06 amended effective July 9, 2001 (28:13 Md. R. 1216); amended effective 50:18 Md. R. 800, eff. 9/18/2023