2682

LAWS OF MARYLAND

Ch. 775

CONTRACT PRICE IS SUBJECT TO PRIOR WRITTEN APPROVAL BY THE
RESPONSIBLE MANAGER IN THE USING AGENCY AND CERTIFICATION BY
THE APPROPRIATE FISCAL AUTHORITY AS TO THE AVAILABILITY OF
FUNDS AND TO THE EFFECT OF THE MODIFICATION, CHANGE, OR
ADJUSTMENT ON THE PROJECT BUDGET OR THE TOTAL CONSTRUCTION
COST. IF THE CERTIFICATION DISCLOSES A RESULTING INCREASE
IN THE PROJECT BUDGET OR TOTAL CONSTRUCTION COST, THE
PROCUREMENT OFFICER MAY NOT EXECUTE OR MAKE THE
MODIFICATION, CHANGE, OR ADJUSTMENT UNLESS SUFFICIENT FUNDS
ARE AVAILABLE, OR THE SCOPE OF THE PROJECT IS ADJUSTED TO
PERMIT ITS COMPLETION WITHIN THE PROJECT BUDGET.

SUBTITLE 7. TYPES OF CONTRACTS

3-701.

THE COST-PLUS-A-PERCENTAGE-OF-COST SYSTEM OF
CONTRACTING MAY NOT BE USED.

3-702.

(A)  COST-REIMBURSEMENT CONTRACTS MAY NOT BE AWARDED TO
PRIME CONTRACTORS UNDER SECTIONS 3-203, 3-204, OR 3-205
UNLESS THE PROCUREMENT OFFICER DETERMINES THAT THE CONTRACT
IS LIKELY TO BE LESS COSTLY TO THE STATE THAN ANY OTHER TYPE
OF CONTRACT, OR THAT IT IS IMPRACTICABLE TO OBTAIN SUPPLIES,
SERVICES, OR CONSTRUCTION OF THE KIND OR QUALITY REQUIRED
EXCEPT UNDER SUCH A CONTRACT.

(B) (1) EACH CONTRACTOR UNDER A COST-REIMBURSEMENT
TYPE CONTRACT SHALL GIVE NOTICE AND SECURE APPROVAL, AS
REQUIRED BY THE CONTRACT, BEFORE ENTERING INTO:

(I)  A COST-REIMBURSEMENT SUBCONTRACT; OR

(II)  ANY OTHER SUBCONTRACT INVOLVING MORE
THAN $25,000, OR 5 PERCENT OF THE ESTIMATED COST OF THE
PRIME CONTRACT.

(2) THE COST-PLUS-A-PERCENTAGE-OF-COST SYSTEM OF
CONTRACTING MAY NOT BE USED BETWEEN CONTRACTORS AND
SUBCONTRACTORS.

(C)  COST-REIMBURSEMENT CONTRACTS SHALL PROVIDE THAT
COSTS WILL BE REIMBURSED ONLY IF THEY ARE COSTS RECOGNIZED
AS ALLOWABLE AND ALLOCABLE UNDER THE COST PRINCIPLE
REGULATIONS ADOPTED PURSUANT TO TITLE 6, OR IN THE CONTRACT.

3-703.

SUBJECT TO THE LIMITATIONS OF SECTIONS 3-701 AND 3-702,
ANY TYPE OF CONTRACT WHICH WILL PROMOTE THE BEST INTERESTS
OF THE STATE MAY BE USED. HOWEVER, PREFERENCE SHALL BE GIVEN
IN THE ORDER INDICATED TO THE FOLLOWING TYPES OF CONTRACTS:
FIRST, FIXED-PRICE; SECOND, FIXED-PRICE INCENTIVE; THIRD,
COST-PLUS INCENTIVE FEE; AND FOURTH, COST-PLUS FIXED FEE OR
COST-REIMBURSEMENT.