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.
   18  Be It Enacted by the Legislature of the State of Florida:
   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.
   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:
   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.