Florida Senate - 2015                                     SB 508
       By Senator Bullard
       39-00713-15                                            2015508__
    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 certain
   10         agencies to award a percentage of contracts to small
   11         businesses; requiring contract vendors to use small
   12         businesses as subcontractors or subvendors; providing
   13         requirements with respect to payment of
   14         subcontractors; prohibiting agencies, general
   15         contractors, or prime contractors from requiring
   16         certain bonds or other sureties for certain contracts;
   17         requiring the rules ombudsman in the Executive Office
   18         of the Governor to establish a system for reporting
   19         small business participation in state contracting;
   20         requiring agencies to cooperate with such reporting;
   21         requiring specified annual reports; providing an
   22         effective date.
   24  Be It Enacted by the Legislature of the State of Florida:
   26         Section 1. Section 287.0577, Florida Statutes, is created
   27  to read:
   28         287.0577 Small business participation in state contracting;
   29  contract bundling; set-asides for small businesses; bonding and
   30  reporting requirements.—
   31         (1) DEFINITIONS.—As used in this section, the term:
   32         (a) “Contract bundling” means the consolidation of
   33  contracts for the procurement of commodities or contractual
   34  services, at least part of which may be provided or performed by
   35  one or more small businesses, into a single contract that is not
   36  appropriate for award to a small business as the prime
   37  contractor.
   38         (b) “Small business” means a business entity organized for
   39  profit that is independently owned and operated, that is not
   40  dominant within the business entity’s industry, and that:
   41         1. Currently is, and for at least the previous 3 years has
   42  been, domiciled in the state.
   43         2. Has a workforce of 50 or fewer permanent full-time
   44  positions, whether employees, independent contractors, or other
   45  contract personnel.
   46         3. Has had, for at least the previous 3 years, average
   47  annual gross sales that do not exceed the following:
   48         a. For a contractor licensed under chapter 489, $5 million
   49  per year.
   50         b. For a sole proprietorship performing contractual
   51  services within the scope of the proprietor’s professional
   52  license or certification, $500,000 per year.
   53         c. For any other business entity, $1 million per year.
   54         4. Currently has, and for at least the previous 3 years has
   55  had, together with its affiliates, a net worth that does not
   56  exceed $5 million. For a sole proprietorship, the net worth
   57  limit of $5 million includes both personal and business
   58  investments but does not include the proprietor’s primary
   59  residence.
   61  The term includes any such business entity organized as any form
   62  of corporation, partnership, limited liability company, sole
   63  proprietorship, joint venture, association, trust, cooperative,
   64  or other legal entity.
   66         (a) An agency, to the maximum extent practicable, shall
   67  structure agency contracts to facilitate competition by and
   68  among small businesses, taking all reasonable steps to eliminate
   69  obstacles to participation and avoiding unnecessary contract
   70  bundling that may preclude small businesses’ participation as
   71  prime contractors.
   72         (b) Before issuing a solicitation for a bundled contract,
   73  an agency must conduct market research to determine whether
   74  contract bundling is necessary. If the agency determines that
   75  contract bundling is necessary, the agency must include in the
   76  solicitation a written summary of the agency’s market research
   77  and a written analysis of the research that explains why
   78  contract bundling is necessary.
   80         (a) An agency shall annually award to small businesses,
   81  either directly or indirectly as subcontractors, at least 35
   82  percent of the total dollar amount of contracts awarded.
   83         (b) Each contract awarded under s. 287.057 must require the
   84  vendor to use small businesses as subcontractors or subvendors.
   85  The percentage of funds, in terms of gross contract amount and
   86  revenues, that must be expended for subcontracting with small
   87  businesses shall be determined by the agency before the
   88  solicitation for the contract is issued; however, the contract
   89  may not allow a vendor to expend less than 35 percent of the
   90  gross contract amount for subcontracting with small businesses.
   91         (c) Each contract must include specific requirements for:
   92         1. The timely payment of subcontractors by the prime
   93  contractor and specific terms and conditions applicable if a
   94  prime contractor does not pay a subcontractor within the time
   95  limits specified in the contract.
   96         2. Payment from the owner and general contractor to
   97  subcontractors within 14 calendar days after receipt of an
   98  invoice or other proper claim for payment.
   99         (4) BONDING REQUIREMENTS.—Notwithstanding any other
  100  provision of law, an agency, a general contractor, or a prime
  101  contractor may not require a vendor to post a bid bond,
  102  performance bond, or other surety for a contract that does not
  103  exceed $500,000. This subsection does not apply to any
  104  requirement for posting a bond pending the protest of a
  105  solicitation; the protest of a rejected bid, proposal, or reply;
  106  or the protest of a contract award.
  107         (5) REPORTING REQUIREMENTS.—The rules ombudsman in the
  108  Executive Office of the Governor shall:
  109         (a) Establish a system to measure and report the use of
  110  small businesses in state contracting. This system shall
  111  maintain information and statistics on small business
  112  participation, awards, dollar volume of expenditures, and other
  113  appropriate types of information to analyze progress in small
  114  businesses access to state contracts and to monitor agency
  115  compliance with this section. Such reporting must include, but
  116  is not limited to, the identification of all subcontracts in
  117  this state by dollar amount and by number of subcontracts and
  118  identification of the use of small businesses as prime
  119  contractors and subcontractors by dollar amounts of contracts
  120  and subcontracts, number of contracts and subcontracts,
  121  industry, and any conditions or circumstances that significantly
  122  affected the performance of subcontractors. An agency shall
  123  report its compliance with the reporting system at least
  124  annually and at the request of the rules ombudsman in the
  125  Executive Office of the Governor. All agencies shall cooperate
  126  with the rules ombudsman in the Executive Office of the Governor
  127  in establishing this reporting system.
  128         (b) Report agency compliance with paragraph (a) for the
  129  preceding fiscal year to the Governor and Cabinet, the President
  130  of the Senate, and the Speaker of the House of Representatives
  131  by February 1 of each year. The report must contain, at a
  132  minimum, the following:
  133         1. Total expenditures of each agency by industry.
  134         2. The dollar amount and percentage of contracts awarded to
  135  small businesses by each agency.
  136         3. The dollar amount and percentage of contracts awarded
  137  indirectly to small businesses as subcontractors by each agency.
  138         4. The total dollar amount and percentage of contracts
  139  awarded to small businesses, whether directly or indirectly as
  140  subcontractors.
  141         Section 2. This act shall take effect July 1, 2015.