WILLIAM DONALD SCHAEFER, Governor

Ch. 48

REVISOR'S NOTE: This section is new language derived
without substantive change from former SF §
12-201(a)(2) and, as it related to the requirement to
provide security and its amount, (1).

The word "security" is used throughout this section
since the security need not be in the form of a bond.
See § 17-104 of this subtitle.

In subsection (a) of this section, the former
reference "[e]xcept as provided in paragraph (2) of
this subsection" is deleted since the referenced
provision — now subsection (b) of this section -- is
not an exception to subsection (a).

The Procurement. Revision Review Committee notes, for
consideration by the General Assembly, that the law
implies that a political subdivision may not require
performance or payment security for a construction
contract if the price of the contract is $25,000 or
less. However, at least 14 counties do, in fact,
require performance or payment security for those
construction contracts. Those counties are: Anne
Arundel, Calvert, Caroline, Frederick, Garrett,
Harford, Howard, Kent, Montgomery, Prince George's,
Somerset, Talbot, Wicomico, and Worcester. The
General Assembly may wish to clarify the law by
expressly providing that a political subdivision
either may or may not require performance or payment
security for a construction contract costing $25,000
or less.

As to payment or performance security for a State
contract if the price is $50,000 or less, see § 13-216
of this article.

Defined terms: "Construction" § 11-101
"Payment security" § 17-101
"Performance security" § 17-101
"Public body" § 17-101

17-104. TYPE OF SECURITY.

PAYMENT SECURITY OR PERFORMANCE SECURITY REQUIRED UNDER THIS
SUBTITLE SHALL BE:

(1)  A BOND EXECUTED BY A SURETY COMPANY AUTHORIZED TO
DO BUSINESS IN THE STATE;

(2)  CASH IN AN AMOUNT EQUIVALENT TO A BOND; OR

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