BPW Advisory 2003-3 EFT Contractor Payments
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Purpose: To inform procurement agencies that before bringing a contract with a value over $200,000 to the Board of Public Works for approval, the agency must ensure that the recommended awardee has registered with the State to receive contract payments electronically (or has received an exemption from the requirement).
Background: Electronic funds transfers of payments to vendors under contract to the State will benefit both the State, by eliminating paper checks, postage, and other check distribution-related costs, and the vendor, by ensuring a more prompt disbursement and deposit process.
Authority: Section 7-227.1, State Finance and Procurement Article, Maryland Code;
COMAR 25.03.02.02.
Procedure:
- The agency procurement officer shall ensure that the recommended contractor has either registered with, or been exempted by, the Comptroller’s Office for electronic funds payments before any contract with a value greater than $200,000 is submitted for approval to the Board of Public Works. The Comptroller’s Accounting Procedures Manual includes instructions concerning this procurement officer requirement. The Comptroller’s Office will monitor compliance with this advisory and report instances of non-compliance to the Board of Public Works.
- Once a contractor registers to receive payments electronically, all State payments to that contractor (including payments under other State contracts regardless of value) will be disbursed via electronic funds transfer. A recommended contractor that cannot comply with this electronic payment requirement must obtain an exemption from the Comptroller’s Office before the recommended award is submitted to the Board of Public Works.
- Every solicitation for a contract expected to exceed $200,000 that requires Board of Public Works approval must include the following clause:
By submitting a response to this solicitation, the Bidder/Offeror agrees to accept payments by electronic funds transfer unless the State Comptroller’s Office grants an exemption. The selected Bidder/Offeror shall register using the form COT/GAD X-10 Vendor Electronic Funds (EFT) Registration Request Form. Any request for exemption must be submitted to the State Comptroller’s Office for approval at the address specified on the COT/GAD X-10 form and must include the business identification information as stated on the form and include the reason for the exemption.
- Every contract with a value over $200,000 that requires Board of Public Works approval, must include the following as part of the mandatory contract clause, ‘Payment of State Obligations’:
Electronic funds transfer will be used by the State to pay Contractor for this Contract and any other State payments due Contractor unless the State Comptroller’s Office grants Contractor an exemption.
