SECTION 9 PAYMENT
SP-9.01 Hours of Labor, Wages, and Payroll Reporting
A. The Contractor and all subcontractors shall comply with the provisions of applicable State of Maryland Law relative to minimum wage rates, hours of labor, overtime wages, apprenticeship, and payroll reporting.
B. The Contractor's attention is also directed to the provision of the Fair Labor Standards Amendments of 1974 P.L. (93‑259). The minimum wage paid to all workmen employed on this Contract shall be in accordance with Article 100 of the Annotated Code of Maryland.
C. It is mandatory upon the successful bidder, and any subcontractors, on contracts over Five Hundred Thousand Dollars ($500,000):
1. To pay not less than the wage rates specified in Wage Rates Section of the Technical Provisions to all workmen employed in the execution of the Contract (Reference Annotated Code of Maryland Article 100, Section 96.107 inclusive); and
2. The Contractor shall submit two (2) complete copies of his payroll records and the payroll records of each of his subcontractors ‑ one (1) copy to the Procurement Officer and one (1) copy to the Commissioner of Labor and Industry, Prevailing Wage Unit, 1100 N. Eutaw Street, Room 607, Baltimore, Maryland 21201, where they will be available for inspection during business hours.
D. The payroll records must be submitted within fourteen (14) calendar days after the end of each payroll period and shall contain the following information:
1. Name, address, and telephone number of the Contractor or the Subcontractor;
2. Contract title, number, and location;
3. Employees’ names, addresses, social security numbers, exact and specific work classification, hours ‑ straight time and overtime worked each day, total hours ‑ straight time and overtime worked, rate of pay and gross wages earned. Employees’ addresses may be dropped after it has been reported one time.
E. Payrolls shall be submitted on US Department of Labor Wage and Hour Public Contracts Division Payroll Form WH‑347 or its equivalent and contain only information relevant to the job and be serially-numbered starting with payroll number one.
F. The Contractor shall be responsible for submission of all subcontractor payroll records covering work performed directly at the work site. Each copy of the payroll records shall be accompanied by a statement, signed by the Contractor or the subcontractor, indicating:
1. that the wage rates contained therein are not less than those established by the Commissioner as set forth in the Contract;
2. that the classification set forth for each workman or apprentice conforms with the work he/she performed; and
3. that the Contractor or subcontractor, as the case may be, has complied with the provisions of the law.
G. If the Contractor is delinquent in submitting payroll records, processing of partial payment estimates may be held in abeyance pending receipt of the records. In addition, if the Contractor is delinquent in submitting his payroll records, the Contractor shall be liable for liquidated damages.
H. Only registered apprentices will be shown as such on payroll. Include for each apprentice proof that the apprentice is in an apprenticeship program registered with the Maryland Apprenticeship and Training Council of the Maryland Department of Labor, Licensing, and Regulation; and approved by the Bureau of Apprenticeship and Training, U.S. Department of Labor. Include written evidence of registration, including step and percentage of the journeyman's rate with the first payroll on which the apprentice appears.
I. Apprentices shall be paid a percentage of the determined prevailing journeyman wage rate for the specific trade according to the apprentice progressive wage scale on file with the Maryland Apprenticeship and Training Council or other State Apprenticeship Agency recognized by the Bureau of Apprenticeship and Training, US Department of Labor.
J. Overtime rates (not less than time and one‑half the prevailing hourly rate of wages) shall be paid by general contractors and subcontractors under their contracts and agreements with their employees which in no event shall be for all hours worked in excess of ten (10) hours in any one calendar day or work performed on Sundays and legal holidays.
K. Contractors and subcontractors before employing a classification or subclassification of workers or any trade or craft for which a wage rate was not issued, will submit a letter to the Commissioner of Labor and Industry stating the proposed rate of pay and listing at least three (3) of their recent jobs in the same locality on which the proposed rate of pay, or less, was paid to such workers.
A. All construction contracts which have a Minority Business Enterprise (MBE) goal, the Contractor must complete a monthly MBE Utilization Statement and include this statement with its monthly invoice. Failure to complete and submit this form, may delay payment to the Contractor.
B. The form is included in these Special Provisions, Section 10, Forms, SP-10.05, Minority Business Enterprise Utilization Statement, as well as, the Technical Provisions.
SP-9.03 Payment for Stored Materials
When the Contractor requests payment allowance for materials in accordance with GP-9.01, Payment, Paragraph C, the following terms and conditions will apply:
A. For permanent materials delivered to the project site, or stored in an approved location off-site, an allowance of one hundred percent (100%) of the material cost plus freight charges as invoiced may be made. The allowance will be based upon validated invoices or bills for such materials, including freight charges, and a copy thereof shall be made a part of the documented records for the project. All permanent materials approved for payment will have been tested by the Administration for compliance with the requirements of the Contract Documents. Payment will only be made for permanent materials which conform to the requirements of the Contract Documents.
B. No allowance will be made for fuels, form lumber, falsework, temporary structures or other materials of any kind which will not become an integral part of the finished construction.
C. All permanent materials for which an allowance is requested shall be stored in an approved manner where damage is not likely to occur. If any of the stored materials are lost or become damaged in any manner, the Contractor shall be responsible for repairing or replacement of such damaged materials. The value of the lost or damaged permanent material will be deducted from the Contractor's subsequent progress payments until replacement has been accomplished.
D. Permanent material for which payment has been made, either wholly or partially, shall not be removed from the approved location until such time that it is incorporated into the work, unless authorized by the Engineer.
E. The following must accompany the written request for payment of stored materials:
1. Consent of the Surety specifying the material type and the bid items in which the material is to be used.
2. Validated invoices showing that payment for the material has been made.
3. A notarized statement from the Contractor attesting that the invoices, as submitted do not include charges and/or fees for placing, handling, erecting or any other charges and/or markups other than the actual material cost, sales tax(es) if applicable, and freight charges.
4. Bill of lading showing delivery of the material.
5. Inspection test reports, certifications required by the Contract Documents and approved by the Engineer.
6. Nothing in these specifications shall be interpreted as requiring the Administration to pay for stored materials. The Administration shall decide on a case-by-case basis whether stored materials shall be paid for. Some factors the Administration will consider are: the Contractor's ability to meet the project schedule and milestones, the effectiveness of the Contractor's Quality Control Plan, the number of unilateral extra work orders the Administration issues, how record drawings are being kept up, the status of material submittals, the effectiveness of the Contractor's safety, erosion and sediment control programs and the on-going cleanliness of the project site. No payment will be made for stored materials which have not been submitted and accepted.
7. If the permanent material is stored outside of the general vicinity of the airport, the Contractor must pay for the Administration's representative's transportation and lodging to the see the permanent materials.
A. Changes, omissions, and extra work shall be authorized and ordered, in writing, by the Engineer by one of the following methods:
1. Issuing, in advance of its performance, a written order describing the change, adjusting the Contract Lump Sum or Bid Total Price, and extending or reducing the Contract time as the case may be.
2. A written change order in which is described the change but which will not involve any adjustment in the Contract Lump Sum or Bid Total Price or the Contract time.
3. A written change order for work to be performed on a time and material basis or Contract fixed unit price basis. Upon completion of the work, a written order adjusting the Contract Lump Sum or Bid Total Price and extending the Contract time will be issued.
B. For each change, omission, or extra work ordered by the Engineer, the Contractor shall submit a proposal in writing to the Engineer in a lump sum amount and shall state the extent to which the Contract time shall thereby be increased or decreased. The Engineer shall, by written demand, require the Contractor to submit a fully itemized breakdown of said Lump Sum Price in such form as he may designate to facilitate checking of said Lump Sum Price if the latter is in excess of ONE THOUSAND DOLLARS ($1,000).
C. For negotiated cumulative change orders in excess of ONE HUNDRED THOUSAND DOLLARS ($100,000), the Contractor must execute a Truth‑In‑Negotiation Certificate vouching for the accuracy of most factors. The Certificate will be issued to the Contractor by the Engineer when required. If the Engineer, by written order, changes or directs that extra work be performed and thereby eliminates the performance of some part of the Contract, and if either the lump sum cost of (1) the change or extra work, or (2) the part eliminated is in excess of ONE THOUSAND DOLLARS ($1,000), the Engineer shall require an itemized breakdown of both. The Contractor shall furnish, as requested by the Engineer, invoices from suppliers or other data in substantiation of the Contractor's cost. All proposals and breakdowns shall be submitted promptly to the Engineer within twenty (20) days from the date the change order is initiated, whether it should originate from the Contractor's request, a design change, or a determination of the Engineer.
D. If a change involves merely an omission and no extra work, the Contract Price shall be reduced by the amount it would always cost the Contractor if the omitted item or work had not been eliminated, but the Contractor and the subcontractors shall each receive a sum not in excess of five percent (5%) overhead. If a change involves both an increase in cost and a decrease in cost of the Contract work, no overhead or profit shall be allowed on what the cost of the omitted work would have been. Items of expense as set forth in paragraph (G) will not be allowed as part of the cost of omissions or extra work as such items are deemed to be reimbursed by overhead allowances.
E. Percentage allowances for overhead and profit will be made to the Contractor and subcontractors, but under no circumstances will such percentages be allowed for work sublet by a subcontractor.
F. The allowable percentages shall be:
1. For changes in excess of ONE THOUSAND DOLLARS ($1,000) total cost before overhead and profit, but not exceeding TWENTY‑FIVE THOUSAND DOLLARS ($25,000) total cost before overhead and profit. The Contractor on all work performed with his own organization will be allowed fifteen percent (15%) overhead and five percent (5%) profit. Subcontractors on all work performed with their own organization will be allowed ten percent (10%) overhead and five percent (5%) profit. On work performed solely by a subcontractor, the Contractor will be allowed five percent (5%) of the total cost of labor, materials and Performance Bond as his overhead and profit.
2. For changes exceeding TWENTY‑FIVE THOUSAND DOLLARS ($25,000) in total cost before overhead and profit. Allowable percentages for overhead and profit will be determined for each particular change after special consideration of the nature, extent, and complexity of the work involved, but in no instance shall such percentages exceed the percentages in paragraph (F1).
G. The allowable percentages of cost for overhead and profit are deemed to include, but not to be limited to, the following:
1. Job supervision and field office expense required by the Contract; expenses for timekeepers, clerks, and watchmen; cost of correspondence of any kind and insurance not specifically mentioned herein; all expenses in connection with the maintenance and operation of the field office; use of small tools and cost of small trucks generally used for transporting either workmen, materials, tools or equipment to job locations; and incidental job burdens.
2. No percentage allowances will be made for maintenance or operation of Contractor's regularly established principal office, branch office, or other similar facilities.
H. Should the Contractor and the Engineer fail to agree upon a Lump Sum Price, the Engineer shall have the right to issue an order for the work to be changed or to be done as extra work on a time and material basis and a correct account shall be kept by the Contractor for the actual cost of all labor, materials, and equipment as described in GP‑9.02.
SP-9.05 Force Account Work
In addition to GP‑9.02, Force Account Work (Paragraph 3), the following requirements shall apply:
"The Rental Rate Blue Book" applies only to rented equipment. The "Cost Reference Guide" applies to contractor-owned equipment. Delete the words "rental" in Paragraphs A. through G., as appropriate.
A. The Contractor shall receive the current rental rates recommended in the Rental Rate Blue Book for Construction Equipment for the use of any machinery or special equipment authorized by the Engineer. The rental rates must be agreed upon in writing before work is begun, except in those cases where the Engineer finds that an emergency exists. Payment will be made for the actual number of hours the equipment is at the work site. The maximum number of hours allowed for each working day will be eight (8) or the actual number of hours in operation, whichever is greater. Weekly rates will be used on the force account project if the total time exceeds three (3) days. Monthly rates will be used for all equipment used on the force account project if the total time exceeds three (3) weeks.
B. Approved transportation charges will be paid from and to the nearest source if the equipment is brought to the project specifically for use on the force account work and is not used on any other work.
C. The rental rate will consist of the sum of the rate for the basic piece of equipment, the rates for attachments (where applicable), and the estimated hourly operating cost.
D. The above component parts of the rate are to be obtained from the Rental Rate Blue Book when listed in that book. If a piece of equipment is not listed in the Rental Rate Blue Book, then the rate will be the prevailing rate being paid in the area where the force account work is being performed.
E. When the equipment is used in excess of eight (8) hours per day, or forty (40) hours per week, the excess time will be considered as overtime. The rental rates for this overtime will be the sum of fifty percent (50%) of the rate for the basic piece of equipment, fifty percent (50%) of the rates for attachments where applicable and one hundred percent (100%) of the estimated hourly operating costs above.
F. Whenever equipment is ordered by the Engineer to be held on the project on a standby basis, or when the Administration is obligated for other reasons to pay for idle equipment, the rate will be seventy five percent (75%) of the rental rate with no allowance for operating costs. Standby or idle time cannot exceed eight (8) hours per day and will not be allowed for Saturday, Sunday, or holidays. Non-operating time for equipment required for force account work is not considered standby or idle time if the equipment is operated and used at least once during each working day.
G. Regional Rate Modifications and Life Expectancy Adjustments will not be allowed.
SP-9.06 Progress Payments
In addition to GP-9.03, Progress Payments, the following information and documentation is required to be included in any proper invoice for payment.
A. Original construction schedule, look-ahead construction schedule, updated construction progress schedule, recovery construction schedule, whichever are appropriate.
B. Certified payroll records for the General Contractor and all subcontractors working on the Contract.
C. Certification that the as-built drawings have been updated and jointly reviewed by the Engineer and the Contractor's representative for the month that payment is requested.
D. Copies of invoices and all documentation necessary for payment with regards to materials stored which have not been incorporated into the work, but for which payment is requested.
E. Copies of completed Monthly Minority Subcontractor Utilization Forms.
F. Certification of payment from the subcontractors as required by GP-9.01, Scope of Payment.
G. Copy of all the Contractor's Quality Control Reports for the period being invoiced.
H. Contractor Quality Control Plan submitted by the Contractor and approved by the Engineer.
I. Contractor Safety Plan and/or reports submitted by the Contractor and approved by the Engineer.
The Contractor is responsible to submit with its invoice, additional information or documentation which may be required elsewhere in this Contract. If the Contractor does not submit the required information, processing of the progress payment may be withheld by the Engineer, or the Administration.
SP-9.07 Prompt Payment to Subcontractors
In accordance with the 1999 Laws of Maryland, Chapter 687, State Finance and Procurement Article, the Maryland State Law on prompt payment, effective October 1, 1999, is summarized below.
A. It is the policy of the State that a contractor shall promptly pay a subcontractor any undisputed amount that a subcontractor is entitled to under a State procurement contract for construction. "Undisputed amount" includes the retainage on a contract.
1. This payment shall be made within ten (10) days of receiving a progress payment or final payment from the State.
2. If a contractor withholds payment, the contractor shall:
a. notify the subcontractor, in writing within the same ten (10) day time period, stating the reasons for payment being withheld,
b. provide a copy of the notice to the procurement officer.
3. If a subcontractor does not receive payment within the required time period, the subcontractor may give written notice of non-payment to the procurement officer. The notice shall include:
a. the name of the contractor, the project under which the dispute exists and the amount in dispute,
b. provide an itemized description on which the amount is based and
c. if known, provide an explanation for any payment dispute.
4. Within two (2) business days of receipt of written notice from a subcontractor, a modal representative shall verbally contact the contractor to determine if the amount withheld is undisputed.
5. If the modal representative determines that all or some of the amount is undisputed, the representative shall instruct the contractor to pay the subcontractor the undisputed amount within three (3) business days. The modal representative shall verbally inform the subcontractor the results of discussions with the contractor.
6. If the payment is not made, the subcontractor may report the non-payment to the procurement officer. As a result, the modal representative shall schedule a meeting of the modal project manager, the subcontractor and the contractor, as follows:
a. the time and location shall be selected by the modal representative,
b. the meeting shall be no later than ten (10) days after receiving notice from the subcontractor,
c. the meeting purpose is to establish the reasons for non-payment,
d. the modal representative shall require the parties to provide information necessary to evaluate the dispute,
e. if the modal representative determines the contractor is delinquent, further progress payments to the contractor may be withheld until the subcontractor is paid.
7. If the payment to the subcontractor is not made within seven (7) days after the modal representative determines that the contractor is delinquent, the modal representative shall schedule a second meeting on the dispute as follows:
a. the time and location shall be selected by the modal representative,
b. the meeting shall be no later than five (5) days after the close of the seven (7) day period.
8. After this second meeting, if the modal representative determines the contractor continues to be delinquent in subcontractor payments, he/she:
a. shall order further payments to the contractor not be processed until payment is made to and verified with the subcontractor,
b. may order work under the contract be suspended based on the contractor's failure to meet contractual obligations under the contract,
c. may require the contractor to pay a penalty to the subcontractor, not to exceed $100 per day, from the date that the payment was required, not to include any period that the modal representative determines that the subcontractor was not diligent in reporting non-payment to the procurement officer.
9. The contractor or subcontractor may appeal the decision after the second meeting, noted above to the procurement officer. The contractor shall comply with the procurement officer's decision.
10. An act, failure to act or decision of the procurement officer or modal representative may not:
a. affect the rights of the contracting parties under other provision of law,
b. be used as evidence on the merits of a dispute between the modal administration and the contractor or the contractor and the subcontractor in any other proceeding or
c. result in liability against or prejudice the rights of the modal administration or the Maryland Department of Transportation.
11. A decision of a procurement officer or a modal representative designated by the procurement officer under this law is not subject to judicial review or the provision for bid protests and contract claims before the Board of Contract Appeals. This law shall be construed only prospectively and may not be applied or interpreted to have any effect on or application to any State procurement contract awarded before the effective date of this law, October 1, 1999.
Federally-Financed Contracts:
In accordance with 49 CFR Part 26.29, retainage must be returned within ten (10) days "after the subcontractor's work is satisfactorily completed", as determined by the prime contractor and reviewable by the Contract Administrator for the specific contract. The determination shall be based upon the comparison of the specific contract specifications with the actual work completed.