Current through Register Vol. 51, No. 19, September 20, 2024
Mandatory provision for all construction contracts:
"Termination for Convenience of the State "
"(1) The performance of work under this
contract may be terminated by the State in accordance with this clause in
whole, or from time to time in part, whenever the procurement officer shall
determine that such termination is in the best interest of the State. Any such
termination shall be effected by delivery to the Contractor of a Notice of
Termination specifying the extent to which performance of work under the
contract is terminated, and the date upon which such termination becomes
effective.
"(2) After receipt of a
Notice of Termination, and except as otherwise directed by the procurement
officer, the Contractor shall:
(a) Stop work
under the contract on the date and to the extent specified in the Notice of
Termination;
(b) Place no further
orders or subcontracts for materials, services or facilities, except as may be
necessary for completion of the portion of the work under the contract as is
not terminated;
(c) Terminate all
orders and subcontracts to the extent that they relate to the performance of
work terminated by Notice of Termination;
(d) Assign to the State in the manner, at the
times, and to the extent directed by the procurement officer, all of the right,
title, and interest of the Contractor under the orders and subcontracts so
terminated, in which case the State shall have the right, in its discretion, to
settle or pay any or all claims arising out of the termination of such orders
and subcontracts;
(e) Settle all
outstanding liabilities and all claims arising out of the termination of orders
and subcontracts, with the approval or ratification of the procurement officer,
to the extent the procurement officer may require, which approval or
ratification shall be final for all the purposes of this clause;
(f) Transfer title and deliver to the State,
in the manner, at the times and to the extent, if any, directed by the
procurement officer,
(i) the fabricated or
unfabricated parts, work in process, completed work, supplies, and other
material produced as a part of, or acquired in connection with the performance
of, the work terminated by the Notice of Termination, and
(ii) the completed or partially completed
plans, drawings, information, and other property which, if the contract had
been completed, would have been required to be furnished to the
State;
(g) Use the
Contractor's best effort to sell, in the manner, at the times, to the extent,
and at the price or prices directed or authorized by the procurement officer,
any property of the types referred to in (f) of this clause; provided, however,
that the Contractor (i) shall not be required to extend credit to any
purchaser, and (ii) may acquire any such property under the conditions
prescribed by and at a price or prices approved by the procurement officer; and
provided further that the proceeds of any such transfer or disposition shall be
applied in reduction of any payments to be made by the State to the Contractor
under this contract or shall otherwise be credited to the price or cost of the
work covered by this contract or paid in such other manner as the procurement
officer may direct;
(h) Complete
performance of such part of the work as may not have been terminated by the
Notice of Termination; and
(i) Take
such action as may be necessary, or as the procurement officer may direct, for
the protection and preservation of the property related to this contract which
is in the possession of the Contractor and in which the State has or may
acquire an interest. The Contractor may submit to the procurement officer a
list, certified as to quantity and quality, of any or all items of termination
inventory not previously disposed of, exclusive of items the disposition of
which has been directed or authorized by the procurement officer, and may
request the State to remove such items or enter into a storage agreement
covering them. Not later than 15 days thereafter, the State shall accept title
to such items and remove them or enter into a storage agreement covering the
same; provided, that the list submitted shall be subject to verification by the
procurement officer upon removal of the items, or if the items are stored,
within 45 days from the date of submission of the list, and any necessary
adjustment to correct the list as submitted shall be made prior to final
settlement.
"(3) After
receipt of a Notice of Termination, the Contractor shall submit to the
procurement officer the Contractor's termination claim, in the form and with
certification prescribed by the procurement officer. Such claim shall be
submitted promptly but in no event later than one year from the effective date
of termination, unless one or more extensions in writing are granted by the
procurement officer, upon request of the Contractor made in writing within such
one year period or authorized extension thereof. However, if the procurement
officer determines that the facts justify such action, the procurement officer
may receive and act upon any such termination claim at any time after such one
year period or any extension thereof. Upon failure of the Contractor to submit
its termination claim within the time allowed, the procurement officer may
determine, on the basis of information available to the procurement officer,
the amount, if any, due to the Contractor by reason of the termination and
shall thereupon pay to the Contractor the amount so determined.
"(4) Subject to the provisions of paragraph
(3), the contractor and the procurement officer may agree upon the whole or any
part of the amount or amounts to be paid to the Contractor by reason of the
total or partial termination of work pursuant to this clause, which amount or
amounts may include a reasonable allowance for profit on work done; provided,
that such agreed amount or amounts, exclusive of settlement costs, shall not
exceed the total contract price as reduced by the amount of payments otherwise
made and as further reduced by the contract price of work not terminated. The
contract shall be amended accordingly, and the Contractor shall be paid the
agreed amount. Nothing in paragraph (5) of this clause, prescribing the amount
to be paid to the Contractor in the event of failure of the Contractor and the
procurement officer to agree upon the whole amount to be paid to the Contractor
by reason of the termination of work pursuant to this clause, shall be deemed
to limit, restrict, or otherwise determine or affect the amount or amounts
which may be agreed upon to be paid to the contractor pursuant to this
paragraph.
"(5) In the event of the
failure of the Contractor and the procurement officer to agree, as provided in
paragraph (4), upon the whole amount to be paid to the Contractor by reason of
the termination of work pursuant to this clause, the procurement officer shall
pay to the Contractor the amounts determined by the procurement officer as
follows, but without duplication of any amounts agreed upon in accordance with
paragraph (4).
(a) With respect to all
contract work performed before the effective date of the Notice of Termination,
the total (without duplication of any items) of:
(i) The cost of the work;
(ii) The cost of settling and paying claims
arising out of the termination of work under subcontracts or orders as provided
in paragraph (2)(e) above, exclusive of the amounts paid or payable on account
of supplies or materials delivered or services furnished by the subcontractor
before the effective date of the Notice of Termination of Work under this
contract, which amounts shall be included in the cost on account of which
payment is made under (i) above; and
(iii) A sum, as profit on (i) above,
determined by the procurement officer, to be fair and reasonable; provided,
however, that if it appears that the contractor would have sustained a loss on
the entire contract had it been completed, no profit shall be included or
allowed under this subdivision (iii) and an appropriate adjustment shall be
made reducing the amount of the settlement to reflect the indicated rate of
loss; and
(b) The
reasonable cost of the preservation and protection of property, incurred
pursuant to paragraph (2)(i); and any other reasonable cost incidental to
termination of work under this contract, including expense incidental to the
determination of the amount due to the Contractor as the result of the
termination of work under this contract.
The total sum to be paid to the Contractor under (a) above,
shall not exceed the total contract price as reduced by the amount of payments
otherwise made and as further reduced by the contract price of work not
terminated. Except for normal spoilage, and except to the extent that the State
shall have otherwise expressly assumed the risk of loss, there shall be
excluded from the amounts payable to the Contractor under (a) above, the fair
value, as determined by the procurement officer, of property which is
destroyed, lost, stolen, or damaged so as to become undeliverable to the State,
or to a buyer pursuant to paragraph (2)(g).
"(6) Costs claimed, agreed to, or determined
pursuant to (3), (4), (5), and (9) hereof shall be in accordance with COMAR
21.09 as in effect on the date of this contract.
"(7) The Contractor shall have the right of
appeal, under the clause of this contract entitled "Disputes", from any
determination made by the procurement officer under paragraphs (2), (5), or (9)
hereof, except that if the Contractor has failed to submit its claim within the
time provided in paragraph (3) or (9) hereof, and has failed to request
extension of such time, the Contractor shall have no such right of appeal. In
any case where the procurement officer has made a determination of the amount
due under paragraphs (3), (5), or (9) hereof, the State shall pay to the
Contractor the following:
(a) if there is no
right of appeal hereunder or if no timely appeal has been taken, the amount so
determined by the procurement officer, or
(b) if an appeal has been taken, the amount
finally determined on such appeal.
"(8) In arriving at the amount due the
Contractor under this clause there shall be deducted (a) all unliquidated
advance or other payments or account theretofore made to the Contractor,
applicable to the terminated portion of this contract, (b) any claim which the
State may have against the Contractor in connection with this contract, and (c)
the agreed price for, or the proceeds of sale of any materials, supplies, or
other things acquired by the Contractor or sold, pursuant to the provisions of
this clause, and not otherwise recovered by or credited to the State.
"(9) If the termination hereunder be partial,
the Contractor may file with the procurement officer a claim for an equitable
adjustment of the price or prices specified in the contract relating to the
continued portion of the contract (the portion not terminated by the Notice of
Termination), and such equitable adjustment as may be agreed upon shall be made
in such price or prices. Any claim by the Contractor for an equitable
adjustment under this clause shall be asserted within ninety (90) days from the
effective date of the termination notice, unless an extension is granted in
writing by the procurement officer.
"(10) The State may from time to time, under
such terms and conditions as it may prescribe, make partial payments and
payments on account against costs incurred by the Contractor in connection with
the terminated portion of this contract whenever in the opinion of the
procurement officer the aggregate of such payments shall be within the amount
to which the Contractor shall be entitled hereunder. If the total of such
payments is in excess of the amount finally agreed or determined to be due
under this clause, such excess shall be payable by the Contractor to the State
upon demand, together with interest computed at the legal rate for the period
from the date such excess payment is received by the contractor to the date on
which the excess is repaid to the State; provided, however, that no interest
shall be charged with respect to any such excess payment attributable to a
reduction in the Contractor's claim by reason of retention or other disposition
of termination inventory until ten days after the date of the retention or
disposition, or a later date as determined by the procurement officer by reason
of the circumstances.
"(11) Unless
otherwise provided for in this contract, or by applicable statute, the
Contractor shall, from the effective date of termination until the expiration
of three years after final settlement under this contract, preserve and make
available to the State at all reasonable times at the office of the Contractor
but without direct charge to the State, all its books, records, documents and
other evidence bearing on the costs and expenses of the contractor under this
contract and relating to the work terminated hereunder, or, to the extent
approved by the procurement officer, photographs, microphotographs, or other
authentic reproductions thereof."
