Md. Code Regs. 24.05.09.06

Current through Register Vol. 51, No. 22, November 1, 2024

Section 24.05.09.06 - Application and Processing Procedures

A. Bond Guaranty Application. Bond guaranty applications shall be made upon standard forms prescribed by the Authority and shall be executed by the principal and the surety. Each application shall include:

(1) A detailed description of the government or utility project, including a copy of the contract;

(2) An itemization of known and estimated costs;

(3) The total amount of investment required to perform the contract;

(4) The funds available to the principal for working capital;

(5) The amount of bonding assistance sought from the Authority;

(6) Information that relates to the inability of the principal to obtain adequate bonding on reasonable terms through normal channels, or an affidavit certifying rejection by a surety;

(7) Information that relates to the financial status of the principal, including:

(a) A balance sheet dated within 90 days of the application,

(b) A profit and loss statement dated within 90 days of the application, and

(c) Credit references;

(8) A schedule of all existing and pending contracts to be performed by the principal and the current status of each contract;

(9) A copy of the filed articles of incorporation, bylaws, partnership agreement, or other organizational documents;

(10) A copy of the financial statements of the principal dated within 90 days of the application; and

(11) Any other relevant information that the Authority requests.

B. Processing of Application.

(1) To make a preliminary determination of the eligibility of the principal and the contract in accordance with these regulations, the Authority's staff shall perform an initial review of each application and may also perform a preliminary audit investigation of the principal's books and records.

(2) After receipt of an application for assistance from the Program, the Authority may determine that a principal shall provide audited financial statements that include a balance sheet and a profit and loss statement before the Authority makes its decision on the application.

C. Application Approval. Approval of an application shall be evidenced by a resolution of the Authority.

D. Bonding Documents. Upon approval of an application, the Authority's staff shall deliver to the surety the resolution and an unexecuted surety bond guaranty agreement. The surety shall return to the Authority:

(1) A surety bond guaranty agreement signed by the surety;

(2) A copy of the bid, payment, or performance bond to be issued by the surety;

(3) A copy of the executed contract (or if a bid bond, a copy of the solicitation requiring the bid bond);

(4) A reimbursement or indemnity agreement; and

(5) Other documents the Authority may require.

E. Surety Bond Guaranty Agreement. Upon review and approval of the bonding documents, the Authority shall issue a fully executed surety bond guaranty agreement to the surety. The surety shall provide the Authority with a copy of the executed bonds within 30 days after the guaranty agreement is issued.

Md. Code Regs. 24.05.09.06