State Contracts - Prohibited Provisions

HB 507 amends Maryland's state contracting law to prohibit specific clauses that could harm the State's financial interests. It explicitly bans contract terms preventing the State from recovering extra costs when replacing a non-performing contractor - ensuring the State can seek reimbursement if the combined cost of the original and replacement contractor exceeds the original contract price. This applies to all state contracts except those for racing facilities, affecting state agencies and contractors who enter into such agreements. The law takes effect October 1, 2025, and voids any prohibited clause, treating contracts as if those terms were never included.