GP - SECTION 9: PAYMENT

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On Administration Contracts, GP-Section 9 Payment does not apply; TC-Section 7 Payment shall apply.

GP-9.01 SCOPE OF PAYMENT

GP-9.01 SCOPE OF PAYMENT does not apply; TC-7.04 Scope of Payment shall apply.

Payment to the Contractor will be made for the actual quantities of Contract items performed in accordance with the Plans and Specifications and if, upon completion of the construction, these actual quantities show either an increase or decrease from the quantities given in the bid schedule, the Contract unit prices will still prevail, except as provided in GP-4.04 Variations in Estimated Quantities.

The payment of any partial estimate or of any retained percentage except by and under the approved final estimate and voucher, in no way shall affect the obligation of the Contractor to repair or renew any defective parts of the construction or to be responsible for all damages due to such defects.

When requested in writing by the Contractor and approved by the procurement officer, payment allowance will be made for nonperishable material to be incorporated in the work delivered and stockpiled at the work site or other approved site. Material for which payment has been made, wholly or partially, shall not be removed from the worksite or other approved site.

Payment to the Contractor under this section for materials on hand in no way will be construed as acceptance by the Administration of title to the material. Title shall remain with the Contractor until the project has been completed and accepted in accordance with GP-5.13.

Contractor shall indicate his Federal Tax Identification or Social Security Number on the face of each invoice billed to the State.

On Contracts in excess of $25,000, the Contractor, prior to receiving a progress or final payment under this Contract, shall first certify in writing that the Contractor has made payment from proceeds of prior payments, and that the Contractor will make timely payments, from the proceeds of the progress or final payment then due to the Contractor, to its subcontractors and suppliers in accordance with his contractual arrangements with them and State Finance and Procurement Article, §17-106. This certification may be required by the procurement officer for Contracts of $25,000 or less.

The Contractor shall also obtain from each subcontractor a certification that it has made payment from proceeds of prior payments to any of its lower tier subcontractors, and will make timely payments to its lower tier subcontractors and suppliers in accordance with its contractual arrangements with them. This certification is not required from subcontractors who have no lower tier subcontracts. These certifications may be required by the procurement officer for contracts of $25,000 or less.

In addition to any other remedies provided by law or this Contract, any Contractor or subcontractor of any tier who fails to make payment as required by the certification set forth in the above paragraphs within 30 days from the date such payments is due shall be obligated to include with such payment interest at the rate of 10 percent per annum from the date the payment was due to the date the payment was actually made to the subcontractor or lower tier subcontractor.

GP-9.02 FORCE ACCOUNT WORK

GP-9.02 FORCE ACCOUNT WORK does not apply; TC-7.03 Force Account shall apply.

When the Contractor is required to perform work as a result of additions or changes to the Contract for which there are no applicable unit prices in the Contract, the Administration and Contractor shall make every effort to come to an agreed upon price for the performance of such work. If an agreement cannot be reached, the Administration may require the Contractor to do such work on a force account basis to be compensated in accordance with the following:

(a) Labor. For all labor and for foremen in direct charge of the specific operations, the Contractor shall receive the actual wages for each and every hour that said labor and foremen are actually engaged in such work.

(b) Materials. For materials accepted by the procurement officer and used, the Contractor shall receive the actual cost of such materials delivered on the work, including transportation charges paid by the Contractor (exclusive of machinery rentals as hereinafter set forth).

(c) Equipment. For any machinery or special equipment (other than small tools, whether rented or owned), the use of which has been authorized by the procurement officer, the Contractor shall receive the rates agreed upon in writing before such work is begun, or the Contractor shall receive those rates which may be specified elsewhere in the Special Provisions. For the purpose of definition, equipment with a new cost of $500 or less will be considered small tools.

(d) Materials and Supplies Not Incorporated in the Work. For materials and supplies expended in the performance of the work (excluding those required for rented equipment) and approved by the procurement officer, the Contractor shall receive the actual cost of such materials and supplies used. The Contractor shall receive a reasonable allowance for materials used but not expended in the performance of the work.

(e) Subcontractors. The Contractor shall receive the actual cost of work performed by a subcontractor. Subcontractor's cost is to be determined as in (a), (b), (c), and (d) above, plus the fixed fee for overhead and profit allowance computed as in (g).

(f) Superintendence. No additional allowance shall be made for general superintendence, the use of small tools, or other costs for which no specific allowance is herein provided.

(g) Contractor's Fixed Fee. The procurement officer and the Contractor shall negotiate a fixed fee for force account work performed pursuant to this GP-9.02 by its forces and by its subcontractors, as compensation for overhead and profit for the work performed. Failure of the Contractor and the procurement officer to negotiate a fixed fee consistent with applicable cost principles in COMAR 21.09.01 shall be treated as a dispute pursuant to GP-5.15 and the Contractor shall proceed diligently with the performance of the force account work to completion. The Contractor's fixed fee shall include an amount equal to the sum of 65 percent of (a) which shall include, but not be limited to the following:

(1) Compensation for all costs paid to, or in behalf of, workmen by reason of subsistence and travel allowances, health and welfare benefits, pension fund benefits or other benefits that may be required by collective bargaining agreement or other employment Contract generally applicable to the classes of labor employed in the work.

(2) Bond premiums, property damage, liability and workmen's compensation insurance premiums, unemployment insurance contributions and Social Security taxes on the force account work.

In addition, the Contractor's fixed fee may include an amount not to exceed 20 percent of (b) and 5 percent of (d), and 5 percent of (e) with the exception of that portion chargeable to equipment as defined above.

(h) Compensation. The compensation as set forth above shall be received by the Contractor as payment in full for change order work done on a force account basis. At the end of each day, the Contractor's representative and the procurement officer shall compare records of the cost of work as ordered on a force account basis.

(i) Statements. No payment will be made for work performed on a force account basis until the Contractor furnishes the procurement officer duplicate itemized statements of the cost of such force account work detailed as to the following:

(1) Name, classification, date, daily hours, total hours, rate, and extension for such laborer, or foreman.

(2) Designation, dates, daily hours, total hours, rental rate, and extension for each unit of machinery and equipment.

(3) Quantities of materials, prices and extensions.

(4) Transportation of materials.

(5) Payments of items under (i)(1) shall be accomplished by copies of certified payrolls. Under (i)(2) original receipted invoices for rentals must be provided if requested by the procurement officer. Paragraphs (i)(3) and (i)(4) shall be accompanied by original receipted invoices for materials used and transportation charges. If, however, the materials used in the force account work are not specifically purchased for such work but are taken from the Contractor's stock, then in lieu of the original invoices the statements shall contain or be accompanied by an affidavit of the Contractor which shall certify that such materials were taken from his stock, that the quantity claimed was actually used and that the price and transportation of the material as claimed represent actual cost. Any request for payment under this Section shall be submitted in the order outlined by the above.

GP-9.03 PROGRESS PAYMENTS

GP-9.03 PROGRESS PAYMENTS does not apply; TC-7.05 Progress Payments shall apply.

(a) Current Estimates.

(1) Lump Sum Contracts. If requested by the Administration, the Contractor shall furnish an acceptable breakdown of the lump sum Contract price showing the amount included therein for each principal category of the work. Said breakdown shall be in such detail so as to provide a basis for estimating monthly progress payments.

(2) Monthly Estimates. Each month the Administration will pay the Contractor for the Contract value of the work satisfactorily performed during the preceding calendar month, including authorized extras and additions less 5 percent. The 5 percent of the total Contract value retained by the Administration will not be released until final payment (unless partially released in a semi-final payment). Current estimates will be based upon the procurement officer's estimate of quantity (including materials and/or equipment complete in place) satisfactorily performed. In the instance of lump sum items, the procurement officer's estimate shall be the proper fraction of the lump sum items satisfactorily performed during the preceding month. All quantities, estimates and fractions will be reasonably accurate approximations and are subject to correction (a) in subsequent current estimates, (b) in any semi-final estimate and, (c) in final payment. Any and/or all partial payments may be withheld in the event current requirements of the Specifications have not been complied with by the Contractor. Should either the procurement officer or the Contractor be of the opinion that any estimates, quantities and/or fractions (either as to an individual current estimate or accumulations thereof) do not represent a reasonably accurate approximation of actual work, then details questioned shall be reviewed and then any corrections adjusted for in the next current estimate.

(3) Escrow Accounts For Retained Funds. The Contractor may elect to have retained funds paid to an escrow agent who may invest the funds in an approved interest-bearing account which, upon completion of the Contract, will be paid to the Contractor to the extent to which the Contractor is entitled. The Contractor's election to use the escrow account procedure must be indicated on the Contract Documents, and the escrow agreement must be in a form and under terms approved by the Administration. The Contractor shall forfeit its right to the use of the escrow account if the Contractor refuses or fails to indicate an election prior to execution of the Contract.

NOTE: This provision GP-9.03(a)(3) shall not apply if it conflicts with any Federal grant or regulation affecting this Contract.

(b) Semi-Final Estimate Payments.

(1) Upon completion of the project and the acceptance by the Administration of the project for maintenance, the Administration, at the Contractor's request and with consent of surety, will pay the Contractor, within 30 calendar days of said request, what is hereby known as a semifinal estimate payment. Such a semifinal estimate payment will be based upon (a) quantities the Administration has computed and set up as proposed final quantities and (b) a reasonably accurate estimate for those quantities for which the Administration has not yet completed computations. The quantities which the Administration sets forth as proposed final quantities shall be so designated. To arrive at the amount of semi-final estimate payment there shall be deducted from the apparent estimated value of the Contract (a) total of an amounts previously paid to the Contractor as current estimates and (b) sums deemed chargeable against the Contractor properly deductible, including liquidated damages, and as a retainage, a sum not less than 1 percent the total value of the Contract.

(2) In cases where there has been substantial completion of the project and there are remaining only inconsequential or minor work items such as painting, seeding, mulching, or planting to be completed and such items cannot be completed for an extended period of time because of seasonal or weather conditions, there shall be made a semi-final inspection and if the work completed is found by the Administration to be satisfactory, then there is deemed to be partial acceptance on the entire project except for the uncompleted work items. Upon the above referred to partial acceptance, the Administration, within 30 days from such partial acceptance, upon request of the Contractor and with consent of surety, shall pay to the Contractor, what is hereby known as a partial semi-final estimate payment. Such a semi-final estimate payment will be based upon (a) quantities the Administration has computed and set up as proposed final quantities and (b) a reasonably accurate estimate for those quantities for which the Administration has not yet completed computations. The quantities which the Administration sets forth as proposed final quantities shall be so designated. To arrive at the amount of semi-final estimate payment, there shall be deducted from the apparent estimated value of the Contract (a) total of all amounts previously paid to the Contractor as current estimates, and (b) sums deemed chargeable against the Contractor properly deductible, including liquidated damages, and as a retainage, a sum equal to 1 percent of the total value of the Contract. (Said retainage is not to be less than $2,000).

(3) If all retained funds have not been paid to an escrow agent, as provided for in GP-9.03(a)(3), the Administration shall, upon payment of the semi-final estimate, place the remaining retainage in an interest-bearing escrow account, as designated and on such terms and conditions as specified by the procurement officer. At the time of final payment, any retainage due, and any interest accrued on the retainage due from the time of payment of the semi-final estimate, shall be paid to the Contractor.

GP-9.04 FINAL ACCEPTANCE AND FINAL PAYMENT

GP-9.04 FINAL ACCEPTANCE AND FINAL PAYMENT does not apply; TC-7.06 Final Acceptance and Final Payment shall apply.

(a) When the Contractor has completed a Contract, and it has been accepted for maintenance in accordance with the provisions of GP-5.13, the Administration will promptly proceed:

(1) To make any necessary final surveys;

(2) To complete any necessary computation of quantities; and

(3) To submit to the Contractor, within 60 days after final completion and acceptance of the project by the procurement officer for maintenance, for the Contractor's consideration, a tabulation of the proposed final quantities. This tabulation shall be accompanied by a statement setting forth: (a) the additional work performed under change orders and/or supplemental agreements; (b) the authorized extension of time; (c) the number of days which have been charged against the Contractor as having been used to complete the Contract, and (d) any deductions, charges or liquidated damages which have been made or imposed.

(b) The Contractor shall then have a period of 10 calendar days, dating from the date upon which the Contractor received the aforementioned tabulation from the Administration, in which:

(1) To decide whether or not to accept final payment upon such a basis, and

(2) To notify the Administration, in writing, of the decision. The Contractor may request an additional period up to 10 calendar days in which to notify the Administration of the Contractor's decision. In the event the Contractor notifies the Administration that the Contractor protests final payment on such a basis, that notification shall outline the reason(s) for said protest.

(c) Upon receipt of a notification of acceptance as provided for in paragraph (b) above, the Administration shall prepare the final estimate and final payment forms and submit them to the Contractor. These forms shall show all data noted in paragraph (a) above, together with deductions for all prior payments. The Contractor shall execute these forms and return them to the Administration within 30 calendar days from the date they are received for execution and payment. If such signed forms are not received by the Administration within the specified time, the Administration will prepare duplicate forms for execution and payment. Such action by the Administration shall be deemed to constitute acceptance and final payment.

(d) If, under the provisions of paragraph (b) above, the Contractor notifies the Administration of the Contractor's protest and nonacceptance of the data submitted to the Contractor, the Administration shall pay the Contractor a semi final estimate, or an additional semi final estimate in the event a semi final estimate has already been paid based upon the data noted in paragraph (a) above, with deductions for all prior payments. A retainage equal to 1 percent of the total value of the Contract shall be withheld by the Administration. The acceptance of such semi final estimate, or additional semi final estimate, shall not be considered as a waiver on the part of the Contractor of its right to pursue the Contractor's protest and press for acceptance and final payment.

(e) In the event the Contractor does not accept the data submitted to the Contractor as described in paragraph (a) above and/or has outstanding a claim filed in accordance with GP-5.14, the procurement officer and the Contractor shall confer at mutually convenient times and endeavor to reconcile all points of disagreement expeditiously. If such reconciliation is accomplished, the Administration will promptly proceed with acceptance and final payment on the reconciled basis and in accordance with the provisions of paragraph (c) above. If reconciliation is not accomplished within 30 days, the decision of the procurement officer shall be reviewed by the Administrator and appropriate legal counsel. After review by the Administrator, the decision of the procurement officer is deemed to be the final action. The procurement officer shall furnish a copy of the final decision to the Contractor by certified mail, return receipt requested. This decision may be appealed by the Contractor to the Maryland State Board of Contract Appeals. This must be done by filing a written notice of appeal to the Appeals Board within 30 days from the date of the final decision. Failure to provide timely notification to the procurement officer shall constitute a waiver by the Contractor of its right under the Disputes Clause and final payment may be made by the Administrator based on the procurement officer's recommendation.

(f) All prior partial estimates and payments shall be subject to correction at the time of acceptance and final payment and if the Contractor has been previously overpaid, the amount of such overpayment shall be set forth in the Final Payment forms and the Contractor hereby agrees that he will reimburse the Administration for such overpayment within six months of receipt of such advice, and its surety will not be granted release from obligations under the terms of the Contract until reimbursement has been made in full.

(g) Payment for the full apparent value of the Contract thus determined shall become due and payable to the Contractor within ninety (90) days after acceptance of the project by the procurement officer for maintenance, as hereinafter provided. As a condition precedent to final payment, the Contractor shall be required to execute a general release of all claims against the Administration arising out of, or in any way connected with, this Contract.

(h) In accordance with § 7-222 of the State Finance and Procurement Article of the Annotated Code of Maryland, certification must be obtained from the Comptroller of the Treasury, and the Employment Security Administration, that all State taxes have been paid prior to release of final payment on a construction Contract. The check will be processed and mailed only after notification is received from both departments that no State tax is owed.

GP-9.05 LATE PAYMENTS

GP-9.05 LATE PAYMENTS does not apply; TC-7.07 Late Payments shall apply.

(a) Payments to the Contractor pursuant to this Contract shall be made no later than 30 days after the State's receipt of a proper invoice from the Contractor. Charges for late payment of invoices, other than as prescribed by Title 15, Subtitle 1, of the State Finance and Procurement Article, Annotated Code of Maryland, or by the Public Service Commission of Maryland with respect to regulated public utilities, as applicable, are prohibited.

(b) A proper invoice shall include: a description of the items or services provided; the date the goods were received or the inclusive dates the services were rendered; the Contract price(s); retention, if any; the basis for the billing; the Contract or purchase order number; the Contractor's Federal Tax Identification Number or Social Security Number; the name and address of the proper invoice recipient.

(c) In order to receive payment of interest, the Contractor must submit a proper invoice for accrued interest within 30 calendar days after the payment date of the amount on which the interest is claimed to have accrued. Interest may not be claimed for more than one year following the 31st calendar day after the date that a proper invoice was received, or on amounts representing unpaid interest, or on an amount due under a Contract remaining unpaid for any period prior to July 1, 1983, or if a claim has been filed under State Finance and Procurement Article, Title 15 of Subtitle 2 of the Code.

(d) For the purposes of this Contract an amount will not be deemed due and payable if:

(1) The amount invoiced is inconsistent with the Contract.

(2) The proper invoice has not been received by the person or office specified in the Contract.

(3) The invoice or performance under the Contract is in dispute or the Contractor has failed to otherwise comply with the provisions of the Contract.

(4) The item or services have not been accepted.

(5) The quantity of items delivered is less than the quantity invoiced.

(6) The items or services do not meet the quality requirements of the Contract.

(7) The Contract provides for progress payments, and the proper invoice for the progress payment has not been submitted pursuant to the schedule contained in the agreement.

(8) The Contract provides for withholding a retainage and the invoice is for the retainage, all stipulated conditions for release of the retainage have not been met.

(9) The Contractor has not submitted satisfactory documentation or other evidence reasonably required by the procurement officer or by the Contract concerning performance under the Contract and compliance with its provisions.