The Florida Senate

337.18  Surety bonds; requirement with respect to contract award; defaults; damage assessments.--

(1)  A surety bond shall be required of the successful bidder in an amount equal to the awarded contract price. For a project for which the contract price is $150,000 or less, the department may waive the requirement for all or a portion of a surety bond if it determines the project is of a noncritical nature and nonperformance will not endanger public health, safety, or property. The department may require alternate means of security if a surety bond is waived. The surety on such bond shall be a surety company authorized to do business in the state. All bonds shall be payable to the department and conditioned for the prompt, faithful, and efficient performance of the contract according to plans and specifications and within the time period specified, and for the prompt payment of all persons furnishing labor, material, equipment, and supplies therefor; however, whenever an improvement, demolition, or removal contract price is $25,000 or less, the security may, in the discretion of the bidder, be in the form of a cashier's check, bank money order of any state or national bank, certified check, or postal money order. The department shall adopt rules to implement this subsection. Such rules shall include provisions under which the department shall refuse to accept bonds on contracts when a surety wrongfully fails or refuses to settle or provide a defense for claims or actions arising under a contract for which the surety previously furnished a bond.

(2)  The department shall provide in its contracts for the determination of default on the part of any contractor for cause attributable to such contractor. The department shall have no liability for anticipated profits for unfinished work on a contract which has been determined to be in default. Every contract let by the department for the performance of work shall contain a provision for payment to the department by the contractor of liquidated damages due to failure of the contractor to complete the contract work within the time stipulated in the contract or within such additional time as may have been granted by the department. The contractual provision shall include a reasonable estimate of the damages that would be incurred by the department as a result of such failure. The department shall establish a schedule of daily liquidated damage charges, based on original contract amounts, for construction contracts entered into by the department, which schedule shall be incorporated by reference into the contract. The department shall update the schedule of liquidated damages at least once every 2 years, but no more often than once a year. The schedule shall, at a minimum, be based on the average construction, engineering, and inspection costs experienced by the department on contracts over the 2 preceding fiscal years. The schedule shall also include anticipated costs of project-related delays and inconveniences to the department and traveling public. Anticipated costs may include, but are not limited to, road user costs, a portion of the projected revenues that will be lost due to failure to timely open a project to revenue-producing traffic, costs resulting from retaining detours for an extended time, and other similar costs. Any such liquidated damages paid to the department shall be deposited to the credit of the fund from which payment for the work contracted was authorized.

(3)  In addition to the provision for payment to the department by the contractor of liquidated damages due to the failure of the contractor to complete the project within the time stipulated in the contract or within such additional time as may have been granted by the department, the department may also recover from the contractor amounts paid by the department for damages suffered by third parties as a result of the contractor's failure to complete the project within the time stipulated in the contract or within such additional time as may have been granted by the department, unless the failure to timely complete the project was caused by the department's act or omission. However, nothing herein shall create a cause of action against the department, or against a contractor by an abutting property owner or business entity, where none has previously existed.

(4)(a)  If the department determines and adequately documents that the timely completion of any project will provide a substantial benefit to the public health, safety, or welfare; will limit the disruptive effect of construction on the community; or is cost beneficial on a revenue-producing project, the contract for such project may provide for an incentive payment payable to the contractor for early completion of the project or critical phases of the work and for additional damages to be assessed against the contractor for the completion of the project or critical phases of the work in excess of the time specified. All contracts containing such provisions shall be approved by the head of the department or his or her designee. The amount of such incentive payment or such additional damages shall be established in the contract but shall not exceed $10,000 per calendar day, except that for revenue-producing projects the amounts and periods of the incentive may be greater if an analysis indicates that additional revenues projected to be received upon completion of the project will exceed the cost of the incentive payments. Any liquidated damages provided for under subsection (2) and any additional damages provided for under this subsection shall be payable to the department because of the contractor's failure to complete the contract work within the time stipulated in the contract or within such additional time as may have been granted by the department.

(b)  The department shall adopt rules to implement this subsection. Such rules shall include procedures and criteria for the selection of projects on which incentive payments and additional damages may be provided for by contract.

(5)  Such bonds shall be subject to the additional obligation that the principal and surety executing the same shall be liable to the state in a civil action instituted by the department or any officer of the state authorized in such cases, for double any amount in money or property the state may lose or be overcharged or otherwise defrauded of, by reason of any wrongful or criminal act, if any, of the contractor, the contractor's agent, or employees.

History.--s. 97, ch. 29965, 1955; s. 1, ch. 65-40; ss. 23, 35, ch. 69-106; s. 1, ch. 71-40; s. 2, ch. 78-316; s. 1, ch. 82-41; s. 23, ch. 83-218; s. 158, ch. 84-309; s. 29, ch. 85-180; s. 10, ch. 87-100; s. 2, ch. 88-281; s. 49, ch. 90-136; s. 121, ch. 92-152; s. 13, ch. 94-237; s. 967, ch. 95-148; s. 50, ch. 96-323; s. 3, ch. 98-105; s. 21, ch. 99-385; s. 14, ch. 2000-266.