9.1 Bonds
9.1.1 Exemption from Bond Requirements
Bond requirements contained in these regulations are not applicable to public works participation agreements (e.g., stormwater agreements, road participation agreements) and other regulatory non-procurement agreements as designated from time to time by the County Attorney.
9.1.2. Director Review
9.1.2.1 The Director must review and approve the bond requirements in a solicitation:
(a) for construction contracts that have a value of less than $100,000; and
(b) all non-construction contracts.
9.1.2.2 In reviewing bonds and bond requirements, the Director must consider the impacts on competition and costs, particularly impacts on MFD firms. The impacts must be balanced with the needs served by the bond requirements, which include appropriate security for performance and other assurances of responsibility.
9.1.2.3 The Director has the right to approve, disapprove, or require changes to any instrument offered as a bond.
9.1.3 Minimum Requirements
9.1.3.1 All bonds must meet the following minimum requirements:
(a) The surety company issuing the bond must be qualified and licensed to do business in the State of Maryland.
(b) The attorney-in-fact on the bond document must be properly authorized to bind the surety, which authorization may be documented by a power of attorney submitted with the bond, or the attorney-in-fact must be registered with the Circuit Court for Montgomery County, Maryland.
(c) The obligee of the bond must be "Montgomery County, Maryland", or any additional or other obligee required by the County.
(d) Any surety or insurance company that issues a bond in favor of the County consents to personal jurisdiction in the State of Maryland and, in the event that any legal action is filed upon the bond, venue shall lie exclusively in the Circuit Court for Montgomery County, Maryland.
(e) The bond must be governed by, and construed in accordance with, the laws of the State of Maryland.
9.1.3.2 Under State law, a construction contract that exceeds $100,000 must require the contractor to provide payment security in an amount equal to at least 50 percent of the total amount payable under the contract and for performance security in an appropriate amount. For construction contracts that do not exceed $100,000, the Director may require payment security or performance security.
9.1.4 Substitutions
Substitutions for bonds may be permitted only with permission of the County Attorney or pursuant to guidelines issued by the County Attorney. Substitutions may include letters of credit, cash deposits and other forms of security. Personal sureties are not acceptable substitutes for bond requirements. Any letter of credit accepted by the County Attorney must contain at least the following terms:
9.1.4.1 The letter of credit must be presentable to an institution located within the State of Maryland.
9.1.4.2 The issuer of the letter of credit must consent to the letter of credit being governed by, and construed in accordance with, the laws of the State of Maryland.
9.1.4.3 The issuer of the letter of credit must consent to personal jurisdiction in the State of Maryland; and
9.1.4.4 In the event that any legal action is filed upon the bond, venue shall lie exclusively in the Circuit Court for Montgomery County, Maryland.
9.2 Insurance
General insurance requirements for contracts are specified by the Office of the County Attorney in the mandatory clauses. Requests for variances from those requirements must be approved by the Director. The Division of Risk Management, Department of Finance, must be consulted on all matters pertaining to insurance, particularly insurance amounts.