Florida Senate - 2019 SB 246 By Senator Hooper 16-00384-19 2019246__ 1 A bill to be entitled 2 An act relating to public construction; amending s. 3 255.05, F.S.; revising requirements for Department of 4 Management Services rules governing certain contracts; 5 amending s. 255.078, F.S.; revising the amounts of 6 retainage that certain public entities and contractors 7 may withhold from progress payments for any 8 construction services contract; specifying 9 nonapplicability of the act; providing an effective 10 date. 11 12 Be It Enacted by the Legislature of the State of Florida: 13 14 Section 1. Paragraph (f) of subsection (1) of section 15 255.05, Florida Statutes, is amended to read: 16 255.05 Bond of contractor constructing public buildings; 17 form; action by claimants.— 18 (1) A person entering into a formal contract with the state 19 or any county, city, or political subdivision thereof, or other 20 public authority or private entity, for the construction of a 21 public building, for the prosecution and completion of a public 22 work, or for repairs upon a public building or public work shall 23 be required, before commencing the work or before recommencing 24 the work after a default or abandonment, to execute and record 25 in the public records of the county where the improvement is 26 located, a payment and performance bond with a surety insurer 27 authorized to do business in this state as surety. A public 28 entity may not require a contractor to secure a surety bond 29 under this section from a specific agent or bonding company. 30 (f) The Department of Management Services shall adopt rules 31 with respect to all contracts for $200,000 or less, to provide: 32 1. Procedures for retaining up to 5
10percent of each 33 request for payment submitted by a contractor and procedures for 34 determining disbursements from the amount retained on a pro rata 35 basis to laborers, materialmen, and subcontractors, as defined 36 in s. 713.01. 37 2. Procedures for requiring certification from laborers, 38 materialmen, and subcontractors, as defined in s. 713.01, before 39 final payment to the contractor that such laborers, materialmen, 40 and subcontractors have no claims against the contractor 41 resulting from the completion of the work provided for in the 42 contract. 43 44 The state is not liable to any laborer, materialman, or 45 subcontractor for any amounts greater than the pro rata share as 46 determined under this section. 47 Section 2. Subsections (1), (2), (3), and (5) of section 48 255.078, Florida Statutes, are amended to read: 49 255.078 Public construction retainage.— 50 (1) With regard to any contract for construction services, 51 a public entity may withhold from each progress payment made to 52 the contractor an amount not exceeding 5 10percent of the 53 payment as retainage until 50-percent completion of such 54 services. 55 (2) After 50-percent completion of the construction 56 services purchased pursuant to the contract, the public entity 57 must reduce to 2.5 5percent the amount of retainage withheld 58 from each subsequent progress payment made to the contractor. 59 For purposes of this section, the term “50-percent completion” 60 means the definition that is provided has the meaning set forth61 in the contract between the public entity and the contractor or, 62 if not defined in the contract, the point at which the public 63 entity has expended 50 percent of the total cost of the 64 construction services purchased as identified in the contract 65 together with all costs associated with existing change orders 66 and other additions or modifications to the construction 67 services provided for in the contract. 68 (3) After 50-percent completion of the construction 69 services purchased pursuant to the contract, the contractor may 70 elect to withhold retainage from payments to its subcontractors 71 at a rate higher than 2.5 5percent. The specific amount to be 72 withheld must be determined on a case-by-case basis and must be 73 based on the contractor’s assessment of the subcontractor’s past 74 performance, the likelihood that such performance will continue, 75 and the contractor’s ability to rely on other safeguards. The 76 contractor shall notify the subcontractor, in writing, of its 77 determination to withhold more than 2.5 5percent of the 78 progress payment and the reasons for making that determination, 79 and the contractor may not request the release of such retained 80 funds from the public entity. 81 (5) NeitherThis section and nors. 255.077 do not prohibit 82 prohibitsa public entity from withholding retainage at a rate 83 less than 5 10percent of each progress payment, from 84 incrementally reducing the rate of retainage pursuant to a 85 schedule provided for in the contract, or from releasing at any 86 point all or a portion of any retainage withheld by the public 87 entity which is attributable to the labor, services, or 88 materials supplied by the contractor or by one or more 89 subcontractors or suppliers. If a public entity makes any 90 payment of retainage to the contractor which is attributable to 91 the labor, services, or materials supplied by one or more 92 subcontractors or suppliers, the contractor must shalltimely 93 remit payment of such retainage to those subcontractors and 94 suppliers. 95 Section 3. This act does not apply to any contract for 96 construction services which is entered into or is pending 97 approval by a public entity, as defined in s. 255.072, Florida 98 Statutes, or to any construction services project advertised for 99 bid by the public entity, on or before July 1, 2019. 100 Section 4. This act shall take effect July 1, 2019.