Florida Senate - 2013                                    SB 1142
       By Senator Gibson
       9-01035A-13                                           20131142__
    1                        A bill to be entitled                      
    2         An act relating to small business participation in
    3         state contracting; creating s. 287.0577, F.S.;
    4         defining the terms “contract bundling” and “small
    5         business”; directing that agencies avoid contract
    6         bundling under certain circumstances; requiring
    7         agencies to conduct market research and include
    8         written summaries and analyses of such research in
    9         solicitations for bundled contracts; requiring
   10         agencies to award a specified percentage of contracts
   11         to small businesses; requiring contract vendors to use
   12         small businesses in the state as subcontractors or
   13         subvendors; providing requirements with respect to
   14         payment of subcontractors, owners, and general
   15         contractors; prohibiting agencies, general
   16         contractors, or prime contractors from requiring
   17         certain bonds or other sureties for certain contracts;
   18         requiring the rules ombudsman in the Executive Office
   19         of the Governor to establish a system for reporting
   20         small business participation in state contracting;
   21         requiring agencies to cooperate with such reporting;
   22         requiring specified annual reports; providing an
   23         effective date.
   25  Be It Enacted by the Legislature of the State of Florida:
   27         Section 1. Section 287.0577, Florida Statutes, is created
   28  to read:
   29         287.0577 Small business participation in state contracting;
   30  contract bundling; set-asides for small businesses; bonding and
   31  reporting requirements.—
   32         (1) DEFINITIONS.—As used in this section, the term:
   33         (a) “Contract bundling” means the consolidation of
   34  contracts for the procurement of commodities or contractual
   35  services, at least part of which may be provided or performed by
   36  one or more small businesses, into a single contract that is not
   37  appropriate for award to a small business as the prime
   38  contractor.
   39         (b) “Small business” means a business entity organized for
   40  profit that is independently owned and operated, that is not
   41  dominant within the business entity’s industry, and that:
   42         1. Currently is, and for at least the previous 3 years has
   43  been, domiciled in the state.
   44         2. Has a workforce of 50 or fewer permanent full-time
   45  positions, whether employees, independent contractors, or other
   46  contractual personnel.
   47         3. Has had, for at least the previous 3 years, average
   48  annual gross sales that do not exceed the following:
   49         a. For a contractor licensed under chapter 489, $5 million
   50  per year.
   51         b. For a sole proprietorship performing contractual
   52  services within the scope of the proprietor’s professional
   53  license or certification, $500,000 per year.
   54         c. For any other business entity, $1 million per year.
   55         4. Currently has, and for at least the previous 3 years has
   56  had, together with its affiliates, a net worth that does not
   57  exceed $5 million. For a sole proprietorship, the net worth
   58  limit of $5 million includes both personal and business
   59  investments but does not include the proprietor’s primary
   60  residence.
   62  The term includes any such business entity organized as any form
   63  of corporation, partnership, limited liability company, sole
   64  proprietorship, joint venture, association, trust, cooperative,
   65  or other legal entity.
   67         (a) An agency, to the maximum extent practicable, shall
   68  structure agency contracts to facilitate competition by and
   69  among small businesses in the state, taking all reasonable steps
   70  to eliminate obstacles to their participation and avoiding the
   71  unnecessary and unjustified contract bundling that may preclude
   72  small businesses’ participation as prime contractors.
   73         (b) Before issuing a solicitation for a bundled contract,
   74  an agency must conduct market research to determine whether
   75  contract bundling is necessary and justified. If the agency
   76  determines that contract bundling is necessary and justified,
   77  the agency must include in the solicitation a written summary of
   78  the agency’s market research and a written analysis of the
   79  research that explains why contract bundling is necessary and
   80  justified.
   82         (a) An agency shall annually award to small businesses,
   83  either directly or indirectly as subcontractors, at least 35
   84  percent of the total dollar amount of contracts awarded.
   85         (b) Each contract awarded under s. 287.057 must require the
   86  vendor to use small businesses in the state as subcontractors or
   87  subvendors. The percentage of funds, in terms of gross contract
   88  amount and revenues, that must be expended for subcontracting
   89  with small businesses in the state shall be determined by the
   90  agency before the solicitation for the contract is issued;
   91  however, the contract may not allow a vendor to expend less than
   92  35 percent of the gross contract amount for subcontracting with
   93  small businesses in the state.
   94         (c) Each contract must include specific requirements for:
   95         1. The timely payment of subcontractors by the prime
   96  contractor and specific terms and conditions applicable if a
   97  prime contractor does not pay a subcontractor within the time
   98  limits specified in the contract.
   99         2. Payment from the owner and general contractor shall be
  100  paid to subcontractors within 15 calendar days after receipt of
  101  a subcontractor’s invoice and pay application.
  102         (4) BONDING REQUIREMENTS.—Notwithstanding any provision of
  103  law, an agency, a general contractor, or a prime contractor may
  104  not require a vendor to post a bid bond, performance bond, or
  105  other surety for a contract that does not exceed $500,000. This
  106  subsection does not apply to any requirement for posting a bond
  107  pending the protest of a solicitation; the protest of a rejected
  108  bid, proposal, or reply; or the protest of a contract award.
  109         (5) REPORTING REQUIREMENTS.—The rules ombudsman in the
  110  Executive Office of the Governor shall:
  111         (a) Establish a system to measure and report the use of
  112  small businesses in state contracting. This system shall
  113  maintain information and statistics on small business
  114  participation, awards, dollar volume of expenditures, and other
  115  appropriate types of information to analyze progress in small
  116  businesses access to state contracts and to monitor agency
  117  compliance with this section. Such reporting must include, but
  118  is not limited to, the identification of all subcontracts in
  119  state contracting by dollar amount and by number of subcontracts
  120  and identification of the use of small businesses as prime
  121  contractors and subcontractors by dollar amounts of contracts
  122  and subcontracts, number of contracts and subcontracts,
  123  industry, and any conditions or circumstances that significantly
  124  affected the performance of subcontractors. An agency shall
  125  report its compliance with the reporting system at least
  126  annually and at the request of the rules ombudsman in the
  127  Executive Office of the Governor. All agencies shall cooperate
  128  with the rules ombudsman in the Executive Office of the Governor
  129  in establishing this reporting system.
  130         (b) Report agency compliance with paragraph (a) for the
  131  preceding fiscal year to the Governor and Cabinet, the President
  132  of the Senate, the Speaker of the House of Representatives, and
  133  the rules ombudsman in the Executive Office of the Governor on
  134  or before February 1 of each year. The report must contain, at a
  135  minimum, the following:
  136         1. Total expenditures of each agency by industry.
  137         2. The dollar amount and percentage of contracts awarded to
  138  small businesses by each state agency.
  139         3. The dollar amount and percentage of contracts awarded
  140  indirectly to small businesses as subcontractors by each state
  141  agency.
  142         4. The total dollar amount and percentage of contracts
  143  awarded to small businesses, whether directly or indirectly as
  144  subcontractors.
  145         Section 2. This act shall take effect July 1, 2013.