Florida Senate - 2023 CS for SB 1188 By the Committee on Governmental Oversight and Accountability; and Senator Boyd 585-02905-23 20231188c1 1 A bill to be entitled 2 An act relating to contract liability; amending s. 3 287.058, F.S.; requiring that certain procurement 4 contracts contain a provision specifying a finite 5 maximum limit of liability for a contractor; requiring 6 maximum liability terms for such contract or purchase 7 order to be specified as a defined monetary threshold 8 or formula; providing applicability; requiring that 9 certain procurement agreements or purchase orders 10 include a specified provision; reenacting ss. 11 287.0571(5) and 1002.84(13), F.S., relating to 12 contract requirements for proposed outsourcing and 13 procurement contract requirements for early learning 14 coalitions, respectively, to incorporate the amendment 15 made to s. 287.058, F.S., in references thereto; 16 providing an effective date. 17 18 Be It Enacted by the Legislature of the State of Florida: 19 20 Section 1. Present paragraph (i) of subsection (1) of 21 section 287.058, Florida Statutes, is redesignated as paragraph 22 (j), a new paragraph (i) is added to that subsection, and 23 subsection (8) is added to that section, to read: 24 287.058 Contract document.— 25 (1) Every procurement of contractual services in excess of 26 the threshold amount provided in s. 287.017 for CATEGORY TWO, 27 except for the providing of health and mental health services or 28 drugs in the examination, diagnosis, or treatment of sick or 29 injured state employees or the providing of other benefits as 30 required by chapter 440, shall be evidenced by a written 31 agreement embodying all provisions and conditions of the 32 procurement of such services, which shall, where applicable, 33 include, but not be limited to, a provision: 34 (i) Specifying a finite maximum limit of liability for the 35 contractor by a defined monetary threshold or monetary formula. 36 1. Liability terms as enumerated under any contract or 37 purchase order of a governmental entity must specify a defined 38 monetary threshold or monetary formula that establishes the 39 maximum liability of the contractor for the contract or purchase 40 order. 41 2. The monetary threshold or monetary formula may not apply 42 to claims arising under separate contractual provisions specific 43 to indemnification. 44 45 In lieu of a written agreement, the agency may authorize the use 46 of a purchase order for classes of contractual services if the 47 provisions of paragraphs (a)-(j)
(a)-(i)are included in the 48 purchase order or solicitation. The purchase order must include, 49 but need not be limited to, an adequate description of the 50 services, the contract period, and the method of payment. In 51 lieu of printing the provisions of paragraphs (a)-(c) and (g) in 52 the contract document or purchase order, agencies may 53 incorporate the requirements of paragraphs (a)-(c) and (g) by 54 reference. 55 (8) Every procurement of contractual services in excess of 56 the threshold amount provided in s. 287.017 for CATEGORY TWO 57 must be evidenced by a written agreement that includes the 58 following provision: 59 60 For all claims against the contractor under any 61 contract or purchase order, regardless of the basis on 62 which the claim is made, the contractor’s liability 63 for direct damages under a contract or purchase order 64 must be limited to the greater of $100,000, the dollar 65 amount of the contract or purchase order, or two times 66 the charges rendered by the contractor under the 67 purchase order. This limitation does not apply to 68 claims arising under the indemnity section of the 69 agreement. Unless otherwise specifically enumerated in 70 the contract or in the purchase order, a party may not 71 be liable to another for special, indirect, punitive, 72 or consequential damages, including lost data or 73 records, unless the contract or purchase order 74 requires the contractor to back up such data or 75 records, even if the party has been advised that such 76 damages are possible. A party may not be liable for 77 lost profits, lost revenue, or lost institutional 78 operating savings. The state and agency may, in 79 addition to other remedies available to them at law or 80 equity and upon notice to the contractor, retain such 81 monies from amounts due to the contractor as may be 82 necessary to satisfy any claim for damages, penalties, 83 costs, and the like asserted by or against them. The 84 state may offset any liability or other obligation of 85 the contractor or its affiliates to the state against 86 any payments due to the contractor under any contract 87 with the state. 88 Section 2. For the purpose of incorporating the amendment 89 made by this act to section 287.058, Florida Statutes, in a 90 reference thereto, subsection (5) of section 287.0571, Florida 91 Statutes, is reenacted to read: 92 287.0571 Business case to outsource; applicability.— 93 (5) In addition to the contract requirements provided in s. 94 287.058, each contract for a proposed outsourcing, pursuant to 95 this section, must include, but need not be limited to, the 96 following contractual provisions: 97 (a) A scope-of-work provision that clearly specifies each 98 service or deliverable to be provided, including a description 99 of each deliverable or activity that is quantifiable, 100 measurable, and verifiable. This provision must include a clause 101 that states if a particular service or deliverable is 102 inadvertently omitted or not clearly specified but determined to 103 be operationally necessary and verified to have been performed 104 by the agency within the 12 months before the execution of the 105 contract, such service or deliverable will be provided by the 106 contractor through the identified contract-amendment process. 107 (b) A service-level-agreement provision describing all 108 services to be provided under the terms of the agreement, the 109 state agency’s service requirements and performance objectives, 110 specific responsibilities of the state agency and the 111 contractor, and the process for amending any portion of the 112 service-level agreement. Each service-level agreement must 113 contain an exclusivity clause that allows the state agency to 114 retain the right to perform the service or activity, directly or 115 with another contractor, if service levels are not being 116 achieved. 117 (c) A provision that identifies all associated costs, 118 specific payment terms, and payment schedules, including 119 provisions governing incentives and financial disincentives and 120 criteria governing payment. 121 (d) A provision that identifies a clear and specific 122 transition plan that will be implemented in order to complete 123 all required activities needed to transfer the service or 124 activity from the state agency to the contractor and operate the 125 service or activity successfully. 126 (e) A performance-standards provision that identifies all 127 required performance standards, which must include, at a 128 minimum: 129 1. Detailed and measurable acceptance criteria for each 130 deliverable and service to be provided to the state agency under 131 the terms of the contract which document the required 132 performance level. 133 2. A method for monitoring and reporting progress in 134 achieving specified performance standards and levels. 135 3. The sanctions or disincentives that shall be imposed for 136 nonperformance by the contractor or state agency. 137 (f) A provision that requires the contractor and its 138 subcontractors to maintain adequate accounting records that 139 comply with all applicable federal and state laws and generally 140 accepted accounting principles. 141 (g) A provision that authorizes the state agency to have 142 access to and to audit all records related to the contract and 143 subcontracts, or any responsibilities or functions under the 144 contract and subcontracts, for purposes of legislative 145 oversight, and a requirement for audits by a service 146 organization in accordance with professional auditing standards, 147 if appropriate. 148 (h) A provision that requires the contractor to interview 149 and consider for employment with the contractor each displaced 150 state employee who is interested in such employment. 151 (i) A contingency-plan provision that describes the 152 mechanism for continuing the operation of the service or 153 activity, including transferring the service or activity back to 154 the state agency or successor contractor if the contractor fails 155 to perform and comply with the performance standards and levels 156 of the contract and the contract is terminated. 157 (j) A provision that requires the contractor and its 158 subcontractors to comply with public records laws, specifically 159 to: 160 1. Keep and maintain the public records that ordinarily and 161 necessarily would be required by the state agency in order to 162 perform the service or activity. 163 2. Provide the public with access to such public records on 164 the same terms and conditions that the state agency would 165 provide the records and at a cost that does not exceed that 166 provided in chapter 119 or as otherwise provided by law. 167 3. Ensure that records that are exempt or records that are 168 confidential and exempt are not disclosed except as authorized 169 by law. 170 4. Meet all requirements for retaining records and transfer 171 to the state agency, at no cost, all public records in 172 possession of the contractor upon termination of the contract 173 and destroy any duplicate public records that are exempt or 174 confidential and exempt. All records stored electronically must 175 be provided to the state agency in a format that is compatible 176 with the information technology systems of the state agency. 177 (k)1. A provision that provides that any copyrightable or 178 patentable intellectual property produced as a result of work or 179 services performed under the contract, or in any way connected 180 with the contract, shall be the property of the state, with only 181 such exceptions as are clearly expressed and reasonably valued 182 in the contract. 183 2. A provision that provides that, if the primary purpose 184 of the contract is the creation of intellectual property, the 185 state shall retain an unencumbered right to use such property. 186 (l) If applicable, a provision that allows the agency to 187 purchase from the contractor, at its depreciated value, assets 188 used by the contractor in the performance of the contract. If 189 assets have not depreciated, the agency shall retain the right 190 to negotiate to purchase at an agreed-upon cost. 191 Section 3. For the purpose of incorporating the amendment 192 made by this act to section 287.058, Florida Statutes, in a 193 reference thereto, subsection (13) of section 1002.84, Florida 194 Statutes, is reenacted to read: 195 1002.84 Early learning coalitions; school readiness powers 196 and duties.—Each early learning coalition shall: 197 (13) Comply with federal procurement requirements and the 198 procurement requirements of ss. 215.971, 287.057, and 287.058, 199 except that an early learning coalition is not required to 200 competitively procure direct services for school readiness 201 program and Voluntary Prekindergarten Education Program 202 providers. 203 Section 4. This act shall take effect July 1, 2023.