6.15.480 Contract performance and payment bonds.
(a) When Required – Amounts. When a construction contract is awarded in excess of a threshold amount established by the Chief Procurement Officer, the Chief Procurement Officer may stipulate that bonds or security shall be delivered to WSSC and shall become binding on the parties upon the execution of the contract by providing:
(1) A performance bond satisfactory to WSSC, executed by a surety company authorized to do business in Maryland or otherwise secured in a manner satisfactory to WSSC, in an amount equal to 100 percent of the portion of the contract price that does not include the cost of operation, maintenance, and finance; and
(2) A payment bond satisfactory to WSSC, executed by a surety company authorized to do business in Maryland or otherwise secured in a manner satisfactory to WSSC, for the protection of all persons supplying labor and material to the contractor or its subcontractors for the performance of the construction work provided for in the contract.
(b) Reduction of Bond Amounts. Subject to the legal authorities, the Chief Procurement Officer may reduce the amount of performance and payment bonds when it is in the best of interest of WSSC.
(c) Suits on Payment Bonds – Right to Institute. The right to institute suit on a payment bond is governed by the State Finance and Procurement Article, §§ 17-108 and 17-109, Annotated Code of Maryland. (Procurement regulations § 4-802, dated August 1, 2012)