ASA Baltimore Supports Strengthening Maryland’s Prompt Pay Law

ASA Baltimore supports SB 671, which would strengthen prompt payment protections for subcontractors across Maryland by ensuring clearer rules and fairer treatment in public and locally funded construction contracts. It expands prompt payment coverage to local government entities, requires written notice if payment is withheld, mandates interest on late payments, and protects subcontractors from being penalized for suspending work due to nonpayment. These changes improve cash flow certainty, reduce disputes, and help small and mid-sized subcontractors operate sustainably.

The legislation would do the following:

• Extends prompt payment protections to include local government owners (counties, cities, boards of education, and public authorities).
• Requires written notice within a set timeframe when part or all of a payment is withheld, explaining the reason and amount.
• Mandates interest on late payments that cannot be waived by contract, creating accountability for delayed payment.
• Allows subcontractors to suspend work for nonpayment without being considered in default, giving protections in the event of delayed compensation.