Read Maryland’s construction security subtitle looking for the word “bond” and you will be reading for a while. The statute is built on a different noun, and the choice is not stylistic — it changes what the obligation is.
The requirement is security, not a bond
“(a) (1) Before a public body awards a construction contract exceeding $100,000, the contractor shall provide payment security and performance security that meet the requirements of § 17–104 of this subtitle.”
Two nouns — payment security and performance security — and a cross-reference. The section that creates the obligation does not define what satisfies it; § 17-104 does.
Compare the drafting elsewhere. Idaho requires “A performance bond … and a payment bond” (Idaho Code § 54-1926). Maine requires “the following surety bonds” (14 M.R.S. § 871). Texas requires the contractor “to execute … a performance bond” and “a payment bond” (Tex. Gov’t Code § 2253.021). Each names the instrument. Maryland names the function and sends the instrument question elsewhere.
In practice a surety bond is the ordinary way to provide construction security, and most Maryland solicitations will ask for one. But the statutory obligation is to provide security meeting the requirements of another section — which is why a Maryland contractor asking “what bond do you need” is asking a slightly wrong question, and “what security do you accept” is the right one.
The discretionary tier, and who is carved out of it
Maryland’s second figure, also in Md. State Fin. & Proc. § 17-103, creates a middle band with two limits:
“(b) A public body, other than the State or a unit of the State government, may require payment security or performance security for a construction contract if: (1) the contract exceeds $50,000 but does not exceed $100,000; and (2) the amount of the security does not exceed 50% of the contract amount.”
Three features to separate.
It is permissive. May require. Below the mandatory threshold there is no automatic requirement, and whether security appears depends on the body.
The State is carved out. A public body “other than the State or a unit of the State government” holds this discretion. State-level bodies do not have it — for them the tier does not exist, and the mandatory threshold is the only rule.
The security is capped at half. Where a local body does exercise the discretion, § 17-103(b)(2) provides that the amount “does not exceed 50% of the contract amount”. That is a ceiling on the security rather than a computation of it, and it is one of the few places in our reading where a statute limits how much a body may demand.
So § 17-103 creates three zones rather than two: below $50,000, nothing under this section; between $50,000 and $100,000, discretionary security for local bodies only, capped at half; above $100,000, mandatory security for everyone.
Ninety days, and the sub-subcontractor
The claim mechanics track the federal shape and extend it by one word.
The first-tier right:
“(a) Subject to subsection (b) of this section, a supplier may sue on payment security if the supplier: (1) supplied labor or materials in the prosecution of work provided for in a contract subject to this subtitle; and (2) has not been paid in full for the labor or materials within 90 days after the day that the person last supplied labor or materials for which the claim is made.”
Ninety days from the supplier’s own last delivery — the same measure as 40 U.S.C. § 3133(b)(1), and the same trap: the clock runs from your last work, not from the invoice or the end of the job.
The remote claimant:
“(b) (1) A supplier who has a direct contractual relationship with a subcontractor or sub-subcontractor of a contractor who has provided payment security but no contractual relationship with the contractor may sue on the security if the supplier gives written notice to the contractor within 90 days after the labor or materials for which the claim is made were last supplied in prosecution of work covered by the security.”
The extension is “or sub-subcontractor”. The federal § 3133(b)(2) is written around a claimant who contracted with a subcontractor, and how far down that reaches has been argued about. Maryland names the next tier expressly, which removes the argument for that tier — and Oklahoma goes further still with “regardless of tier” (61 O.S. § 1).
Notice too that Maryland says the supplier may sue on the security, not on the bond. The remedy is described in the same terms as the obligation, consistently throughout.
The word choice, taken seriously
It would be easy to treat “security” as a drafting habit. It is worth taking at face value for one practical reason: the noun determines what a contractor is being asked to produce, and Maryland’s noun is broader than a bond.
That breadth is not unique — West Virginia allows a cash or government-securities deposit in lieu of corporate surety (W.Va. Code § 38-2-39), Vermont accepts “other good and sufficient surety in lieu of a bond” (Vt. Stat. tit. 19 § 10), and Oklahoma accepts a letter of credit or an affidavit (61 O.S. § 1). What is distinctive about Maryland is that the breadth is in the primary noun rather than in an exception bolted on afterwards. The statute never narrows to a bond and then widens back out; it starts wide.
Bid security the officer must take — and may not
The security discussed above is what stands behind the contract. Bid security is a separate provision, at Md. State Fin. & Proc. § 13-207, and it is written in the same two-sided way as the bond statute — which is the most Maryland thing about it.
The duty runs upward from a figure:
“(b)(1) A procurement officer shall require a bidder or offeror to provide bid security on a procurement contract for construction if: (i) the price is expected to exceed the small procurement amount specified in § 13-109 of this title; or (ii) required by federal law or a condition of federal assistance requires the security.”
And it is switched off below the same figure, in terms that bind the officer rather than the bidder:
“(a) … a procurement officer may not require a bidder or offeror to provide bid security on a procurement contract if the procurement officer expects the price to be less than or equal to the small procurement amount specified in § 13-109.”
Shall above, may not below. As with the bond sections, Maryland does not merely set a floor on what a contractor must produce; it sets a ceiling on what an officer may ask for. A bidder pressed for security on a small procurement has a sentence to point at.
Where security is required, Md. State Fin. & Proc. § 13-207 fixes the amount:
“(2) The amount of bid security required for a procurement contract for construction shall be: (i) at least 5% of the bid or price proposal; or (ii) if the bid or price proposal states a rate but not a total price, an amount determined by the procurement officer.”
So 5 percent under Md. State Fin. & Proc. § 13-207 — with a second limb for the case the first cannot handle. A bid quoted as a rate has no total to take a percentage of, so the statute hands that one back to the officer rather than pretending the arithmetic works.
The figure that decides which side of the rule you are on is not in this section. It is the small procurement amount specified in § 13-109, a cross-reference this page has not followed, so we do not print a number for it. The rule is a shall and a may-not hinged on a threshold defined somewhere else, and the honest form of that sentence keeps the somewhere-else in it.
The sections this page did not read
Section 17-103 gives the thresholds and the tiers; the claim provisions above give the 90-day rules. Several things sit outside what we read.
§ 17-104 is the important gap. It defines what security actually satisfies the requirement — the instrument question, the acceptable forms, and any conditions on them. The triggering section defers to it in its very first sentence, and this page does not state its contents.
We also have not read Maryland’s limitation period for suit on the security, its bid-security rules, or the procurement provisions that surround the subtitle. If you are pursuing an unpaid Maryland claim, the deadline is the part that decides it and it is not on this page.
