Florida Senate - 2023 CS for SB 346
By the Committee on Community Affairs; and Senator DiCeglie
578-02612-23 2023346c1
1 A bill to be entitled
2 An act relating to public construction; amending s.
3 218.735, F.S.; requiring that a certain list include a
4 dollar valuation, as reasonably determined by the
5 contractor as a portion of the contract value, of the
6 estimated cost to complete each item on the list;
7 deleting a provision authorizing an extension by
8 contract for construction projects of less than $10
9 million; requiring a local governmental entity to pay
10 a contractor the remaining contract balance within a
11 specified timeframe; revising the conditions that
12 would require a local governmental entity to pay
13 unpaid contract sums to a contractor if a specified
14 list is not developed; requiring a local governmental
15 entity to pay the remaining contract balance if the
16 local governmental entity provided a certain written
17 notice to the contractor; revising the conditions that
18 require a local governmental entity to pay or release
19 amounts subject to certain disputes or claims;
20 amending s. 218.76, F.S.; revising the timeframe
21 within which proceedings must commence to resolve
22 disputes between vendors and local governmental
23 entities; revising the timeframe for such proceedings
24 to conclude; amending s. 255.073, F.S.; requiring that
25 undisputed portions of payment requests be paid within
26 a specified timeframe; amending s. 255.074, F.S.;
27 revising the timeframe for a public entity to submit a
28 payment request to the Chief Financial Officer;
29 amending s. 255.077, F.S.; requiring that a certain
30 list include a dollar valuation, as determined by the
31 contractor as a portion of the contract value, to
32 complete each item on the list; requiring the public
33 entity to pay the contractor the remaining contract
34 balance within a specified timeframe; requiring a
35 public entity to pay all remaining retainage if the
36 public entity has not developed a specified list;
37 amending s. 255.078, F.S.; revising the conditions
38 that require a public entity to pay or release amounts
39 subject to certain disputes or claims; amending s.
40 255.0992, F.S.; revising the definition of the term
41 “public works project”; providing an effective date.
42
43 Be It Enacted by the Legislature of the State of Florida:
44
45 Section 1. Subsection (7) and paragraph (c) of subsection
46 (8) of section 218.735, Florida Statutes, are amended to read:
47 218.735 Timely payment for purchases of construction
48 services.—
49 (7) Each contract for construction services between a local
50 governmental entity and a contractor must provide for the
51 development of a single list of items required to render
52 complete, satisfactory, and acceptable the construction services
53 purchased by the local governmental entity, which must include a
54 dollar valuation, as reasonably determined by the contractor as
55 a portion of the contract value, of the estimated cost to
56 complete each item on the list.
57 (a) The contract must specify the process for developing
58 the list, including the responsibilities of the local
59 governmental entity and the contractor in developing and
60 reviewing the list and a reasonable time for developing the
61 list:
62 1. For construction projects having an estimated cost of
63 less than $10 million, within 30 calendar days after reaching
64 substantial completion of the construction services purchased as
65 defined in the contract, or, if not defined in the contract,
66 upon reaching beneficial occupancy or use; or
67 2. For construction projects having an estimated cost of
68 $10 million or more, within 30 calendar days, or, if extended by
69 contract, up to 60 calendar days after reaching substantial
70 completion of the construction services purchased as defined in
71 the contract, or, if not defined in the contract, upon reaching
72 beneficial occupancy or use.
73
74 The contract must also specify a date for the delivery of the
75 list of items, not to exceed 5 days after the list of items has
76 been developed and reviewed in accordance with the time periods
77 set forth in subparagraphs 1. and 2.
78 (b) If the contract between the local governmental entity
79 and the contractor relates to the purchase of construction
80 services on more than one building or structure, or involves a
81 multiphased project, the contract must provide for the
82 development of a list of items required to render complete,
83 satisfactory, and acceptable all the construction services
84 purchased pursuant to the contract for each building, structure,
85 or phase of the project within the time limitations provided in
86 paragraph (a).
87 (c) The final contract completion date must be at least 30
88 days after the delivery of the list of items. If the list is not
89 provided to the contractor by the agreed upon date for delivery
90 of the list, the contract time for completion must be extended
91 by the number of days the local governmental entity exceeded the
92 delivery date. Damages may not be assessed against a contractor
93 for failing to complete a project within the time required by
94 the contract, unless the contractor failed to complete the
95 project within the contract period as extended under this
96 paragraph.
97 (d) The failure to include any corrective work or pending
98 items not yet completed on the list does not alter the
99 responsibility of the contractor to complete all the
100 construction services purchased pursuant to the contract.
101 (e) Within 20 days after the date the list is created, the
102 local governmental entity must pay the contractor the remaining
103 contract balance that includes all retainage previously withheld
104 by the local governmental entity. The remaining contract balance
105 does not include the estimated costs to complete the items
106 included on the list.
107 (f) Upon completion of all items on the list, the
108 contractor may submit a payment request for all remaining
109 contract sums retainage withheld by the local governmental
110 entity pursuant to this section. If a good faith dispute exists
111 as to whether one or more items identified on the list have been
112 completed pursuant to the contract, the local governmental
113 entity may continue to withhold up to 150 percent of the total
114 costs to complete such items.
115 (g)(f) All items that require correction under the contract
116 which and that are identified after the preparation and delivery
117 of the list remain the obligation of the contractor as defined
118 by the contract.
119 (h)(g) Warranty items or items not included in the list of
120 items required under paragraph (a) may not affect the final
121 payment of retainage as provided in paragraph (e) this section
122 or as provided in the contract between the contractor and its
123 subcontractors and suppliers.
124 (i)(h) Retainage may not be held by a local governmental
125 entity or a contractor to secure payment of insurance premiums
126 under a consolidated insurance program or series of insurance
127 policies issued to a local governmental entity or a contractor
128 for a project or group of projects, and the final payment of
129 retainage as provided in paragraph (e) this section may not be
130 delayed pending a final audit by the local governmental entity’s
131 or contractor’s insurance provider.
132 (j)(i) If a local governmental entity fails to comply with
133 its responsibilities to develop the list required under
134 paragraph (a) or paragraph (b) within the time limitations
135 provided in paragraph (a), the contractor may submit a payment
136 request for all remaining unpaid contract sums, including
137 retainage withheld by the local governmental entity, and the
138 local governmental entity must pay the contractor all remaining
139 contract sums pursuant to this section; and payment of any
140 remaining undisputed contract amount, less any amount withheld
141 pursuant to the contract for incomplete or uncorrected work,
142 must be paid within 20 business days after receipt of a proper
143 invoice or payment request. If the local governmental entity has
144 provided written notice to the contractor specifying the failure
145 of the contractor to meet contract requirements in the
146 development of the list of items to be completed, the local
147 governmental entity must pay the contractor the remaining
148 contract balance that includes retainage previously withheld by
149 the local governmental entity. The remaining contract balance
150 does not include 150 percent of the estimated costs to complete
151 the items that the local governmental entity has included on its
152 version of the list need not pay or process any payment request
153 for retainage if the contractor has, in whole or in part, failed
154 to cooperate with the local governmental entity in the
155 development of the list or to perform its contractual
156 responsibilities, if any, with regard to the development of the
157 list or if paragraph (8)(c) applies.
158 (8)
159 (c) This section does not require the local governmental
160 entity to pay or release any amounts that are the subject of a
161 good faith dispute or, the subject of a claim brought pursuant
162 to s. 255.05, or otherwise the subject of a claim or demand by
163 the local governmental entity or contractor.
164 Section 2. Paragraph (a) of subsection (2) of section
165 218.76, Florida Statutes, is amended to read:
166 218.76 Improper payment request or invoice; resolution of
167 disputes.—
168 (2)(a) If a dispute arises between a vendor and a local
169 governmental entity concerning payment of a payment request or
170 an invoice, the dispute must shall be finally determined by the
171 local governmental entity pursuant to a dispute resolution
172 procedure established by the local governmental entity. Such
173 procedure must provide that proceedings to resolve the dispute
174 commence are commenced within 30 45 days after the date the
175 payment request or proper invoice was received by the local
176 governmental entity and conclude concluded by final decision of
177 the local governmental entity within 45 60 days after the date
178 the payment request or proper invoice was received by the local
179 governmental entity. Such procedures are not subject to chapter
180 120 and do not constitute an administrative proceeding that
181 prohibits a court from deciding de novo any action arising out
182 of the dispute. If the dispute is resolved in favor of the local
183 governmental entity, interest charges begin to accrue 15 days
184 after the local governmental entity’s final decision. If the
185 dispute is resolved in favor of the vendor, interest begins to
186 accrue as of the original date the payment became due.
187 Section 3. Subsection (2) of section 255.073, Florida
188 Statutes, is amended to read:
189 255.073 Timely payment for purchases of construction
190 services.—
191 (2) If a public entity disputes a portion of a payment
192 request, the undisputed portion must be timely paid within the
193 time required under the contract or within 20 days, whichever is
194 earlier.
195 Section 4. Subsection (3) of section 255.074, Florida
196 Statutes, is amended to read:
197 255.074 Procedures for calculation of payment due dates.—
198 (3) A public entity must submit a payment request to the
199 Chief Financial Officer for payment no later more than 14 20
200 days after receipt of the payment request.
201 Section 5. Present subsections (4) through (8) of section
202 255.077, Florida Statutes, are redesignated as subsections (5)
203 through (9), respectively, a new subsection (4) is added to that
204 section, and subsection (1) and present subsection (8) of that
205 section are amended, to read:
206 255.077 Project closeout and payment of retainage.—
207 (1) Each contract for construction services between a
208 public entity and a contractor must provide for the development
209 of a list of items required to render complete, satisfactory,
210 and acceptable the construction services purchased by the public
211 entity. The list must include a dollar valuation, as reasonably
212 determined by the contractor as a portion of the contract value,
213 of the estimated cost to complete the items included on the
214 list. The contract must specify the process for the development
215 of the list, including responsibilities of the public entity and
216 the contractor in developing and reviewing the list and a
217 reasonable time for developing the list, as follows:
218 (a) For construction projects having an estimated cost of
219 less than $10 million, within 30 calendar days after reaching
220 substantial completion of the construction services purchased as
221 defined in the contract, or, if not defined in the contract,
222 upon reaching beneficial occupancy or use; or
223 (b) For construction projects having an estimated cost of
224 $10 million or more, within 30 calendar days, unless otherwise
225 extended by contract not to exceed 60 calendar days, after
226 reaching substantial completion of the construction services
227 purchased as defined in the contract, or, if not defined in the
228 contract, upon reaching beneficial occupancy or use.
229 (4) Within 20 days after the date the list is created, the
230 public entity must pay the contractor the remaining contract
231 balance that includes all retainage previously withheld by the
232 public entity. The remaining contract balance does not include
233 the costs to complete the items included on the list.
234 (9)(8) If a public entity fails to comply with its
235 responsibilities to develop the list required under subsection
236 (1) or subsection (2), as defined in the contract, within the
237 time limitations provided in subsection (1), the contractor may
238 submit a payment request for all remaining retainage withheld by
239 the public entity pursuant to s. 255.078 and the public entity
240 must pay the contractor all remaining retainage previously
241 withheld within 20 days after receipt of the payment request.
242 The public entity is not required to need not pay or process any
243 payment request for retainage if the contractor has, in whole or
244 in part, failed to cooperate with the public entity in the
245 development of the list or failed to perform its contractual
246 responsibilities, if any, with regard to the development of the
247 list or if s. 255.078(3) applies.
248 Section 6. Subsection (3) of section 255.078, Florida
249 Statutes, is amended to read:
250 255.078 Public construction retainage.—
251 (3) This section and s. 255.077 do not require the public
252 entity to pay or release any amounts that are the subject of a
253 good faith dispute or, the subject of a claim brought pursuant
254 to s. 255.05, or otherwise the subject of a claim or demand by
255 the public entity or contractor.
256 Section 7. Paragraph (b) of subsection (1) of section
257 255.0992, Florida Statutes, is amended to read:
258 255.0992 Public works projects; prohibited governmental
259 actions.—
260 (1) As used in this section, the term:
261 (b) “Public works project” means an activity exceeding
262 $350,000 $1 million in value that is paid for with any local or
263 state-appropriated funds and that which consists of the
264 construction, maintenance, repair, renovation, remodeling, or
265 improvement of a building, road, street, sewer, storm drain,
266 water system, site development, irrigation system, reclamation
267 project, gas or electrical distribution system, gas or
268 electrical substation, or other facility, project, or portion
269 thereof that is owned in whole or in part by any political
270 subdivision.
271 Section 8. This act shall take effect July 1, 2023.