364                                         LAWS OF MARYLAND                          [Ch. 12

(1) A PERFORMANCE BOND WHICH IS:

(1)    EXECUTED BY A SURETY COMPANY AUTHORIZED
TO DO BUSINESS IN THE STATE AND SATISFACTORY TO THE
PUBLIC BODY AWARDING THE CONTRACT; AND

(ii) IN TERMS AND AMOUNT ADEQUATE IN THE
OPINION OF THE PUBLIC BODY FOR THE PROTECTION OF THE
PUBLIC BODY; AND

(2)    A PAYMENT BOND, EXECUTED BY A SURETY
COMPANY AUTHORIZED TO DO BUSINESS IN THE STATE,
SATISFACTORY TO THE PUBLIC BODY FOR THE PROTECTION OF ALL
PERSONS SUPPLYING LABOR AND MATERIALS, INCLUDING LESSORS
OF EQUIPMENT TO THE EXTENT OF ITS FAIR RENTAL VALUE, AND
TO THE CONTRACTOR OR HIS SUBCONTRACTOR IN THE PROSECUTION
OF THE WORK PROVIDED IN THE CONTRACT FOR THE USE OF EACH
PERSON. THE AMOUNT OF THE BOND MAY NOT BE LESS THAN 50
PERCENT OF THE TOTAL AMOUNT PAYABLE BY THE TERMS OF THE
CONTRACT. ANY CONTRACTOR COVERED BY THE BOND IS NOT
REQUIRED TO FURNISH A WAIVER OF MECHANICS' LIENS TO THE
STATE. BEFORE RECEIVING A PROGRESS OR FINAL PAYMENT UNDER
A CONTRACT COVERED BY THIS SECTION, A CONTRACTOR SHALL
CERTIFY IN WRITING THAT HE HAS MADE PAYMENT FROM THE
PROCEEDS OF PRIOR PAYMENTS, AND THAT HE WILL MAKE TIMELY
PAYMENTS FROM THE PROCEEDS OF THE PROGRESS OR FINAL
PAYMENT THEN DUE HIM, TO HIS SUBCONTRACTORS AND SUPPLIERS
IN ACCORDANCE WITH HIS CONTRACTUAL ARRANGEMENT WITH THEM.

(D)   AUTHORITY TO REQUIRE ADDITIONAL BONDS.

NOTHING IN THIS SECTION LIMITS THE AUTHORITY OF THE
PUBLIC BODY PROVIDED IN THIS SECTION, TO REQUIRE A
PERFORMANCE BOND OR OTHER SECURITY IN ADDITION TO THOSE,
OR IN CASES OTHER THAN THE CASES SPECIFIED IN SUBSECTION
(B).

(E)   RIGHT TO INSTITUTE SUIT ON PAYMENT BONDS.

ANY PERSON WHO FURNISHES LABOR OR MATERIAL AS
PROVIDED IN THE CONTRACT, FOR WHICH A PAYMENT BOND IS
FURNISHED UNDER THIS SECTION AND WHO HAS NOT BEEN PAID IN
FULL BEFORE THE EXPIRATION OF 90 DAYS AFTER THE DAY ON
WHICH THE LAST OF THE LABOR WAS PERFORMED BY HIM, OR
MATERIAL WAS FURNISHED BY HIM, AND FOR WHICH THE CLAIM IS
MADE, HAS THE RIGHT TO SUE ON THE PAYMENT BOND FOR THE
AMOUNT OR THE BALANCE UNPAID AT THE TIME OF INSTITUTION
OF THE SUIT. HE ALSO HAS A RIGHT TO PROSECUTE THE ACTION
TO FINAL JUDGMENT AND EXECUTION FOR THE SUM JUSTLY DUE
HIM. HOWEVER, ANY PERSON HAVING A DIRECT CONTRACTUAL
RELATIONSHIP WITH A SUBCONTRACTOR OF THE CONTRACTOR, OR
WITH ANY SUB-SUBCONTRACTOR OF THE CONTRACTOR, BUT WHO
DOES NOT HAVE AN EXPRESS OR IMPLIED CONTRACTUAL