ENROLLED
       2023 Legislature                            CS for CS for SB 346
       
       
       
       
       
       
                                                              2023346er
    1  
    2         An act relating to public construction; amending s.
    3         218.735, F.S.; requiring that certain contracts
    4         provide the estimated cost to complete each item on a
    5         specified list; requiring that such contracts specify
    6         the process for determining the cost to complete each
    7         item on the list; revising the extension by contract
    8         of a specified timeframe to develop and review a
    9         specified list; requiring a local governmental entity
   10         to pay a contractor the remaining contract balance
   11         within a specified timeframe; authorizing the
   12         contractor to submit a payment request for the amount
   13         withheld by the local governmental entity under
   14         specified conditions; authorizing a contractor to
   15         submit a payment request to the local governmental
   16         entity for the remaining balance of the contract,
   17         under specified conditions; requiring a local
   18         governmental entity to pay the contractor within a
   19         specified timeframe; requiring the local governmental
   20         entity to pay the remaining balance of the contract
   21         under specified conditions; revising the conditions
   22         that require a local governmental entity to pay or
   23         release amounts subject to certain disputes or claims;
   24         amending s. 218.76, F.S.; revising the timeframe
   25         within which proceedings must commence to resolve
   26         disputes between vendors and local governmental
   27         entities; revising the timeframe for such proceedings
   28         to conclude; amending s. 255.073, F.S.; requiring that
   29         undisputed portions of payment requests be paid within
   30         a specified timeframe; amending s. 255.074, F.S.;
   31         revising the timeframe for a public entity to submit a
   32         payment request to the Chief Financial Officer;
   33         amending s. 255.077, F.S.; requiring that certain
   34         contracts provide the estimated cost to complete each
   35         item on a specified list; requiring that such
   36         contracts specify the process for determining the cost
   37         to complete the items on the list; revising the
   38         extension authorized by contract to develop the
   39         specified list; requiring the public entity to pay the
   40         contractor the remaining balance of the contract
   41         within a specified timeframe; requiring a public
   42         entity to pay all remaining retainage if the public
   43         entity has not developed a specified list; amending s.
   44         255.078, F.S.; revising the conditions that require a
   45         public entity to pay or release amounts subject to
   46         certain disputes or claims; amending s. 255.0992,
   47         F.S.; revising the definition of the term “public
   48         works project”; providing an effective date.
   49          
   50  Be It Enacted by the Legislature of the State of Florida:
   51  
   52         Section 1. Subsection (7) and paragraph (c) of subsection
   53  (8) of section 218.735, Florida Statutes, are amended to read:
   54         218.735 Timely payment for purchases of construction
   55  services.—
   56         (7) Each contract for construction services between a local
   57  governmental entity and a contractor must provide for the
   58  development of a single list of items and the estimated cost to
   59  complete each item on the list required to render complete,
   60  satisfactory, and acceptable the construction services purchased
   61  by the local governmental entity.
   62         (a) The contract must specify the process for developing
   63  the list and for determining the cost to complete each item on
   64  the list, and should include, including the responsibilities of
   65  the local governmental entity and the contractor in developing
   66  and reviewing the list and a reasonable time for developing the
   67  list:
   68         1. For construction projects having an estimated cost of
   69  less than $10 million, within 30 calendar days after reaching
   70  substantial completion of the construction services purchased as
   71  defined in the contract, or, if not defined in the contract,
   72  upon reaching beneficial occupancy or use; or
   73         2. For construction projects having an estimated cost of
   74  $10 million or more, within 30 calendar days, or, if extended by
   75  contract, up to 45 60 calendar days after reaching substantial
   76  completion of the construction services purchased as defined in
   77  the contract, or, if not defined in the contract, upon reaching
   78  beneficial occupancy or use.
   79  
   80  The contract must also specify a date for the delivery of the
   81  list of items, not to exceed 5 days after the list of items has
   82  been developed and reviewed in accordance with the time periods
   83  set forth in subparagraphs 1. and 2.
   84         (b) If the contract between the local governmental entity
   85  and the contractor relates to the purchase of construction
   86  services on more than one building or structure, or involves a
   87  multiphased project, the contract must provide for the
   88  development of a list of items required to render complete,
   89  satisfactory, and acceptable all the construction services
   90  purchased pursuant to the contract for each building, structure,
   91  or phase of the project within the time limitations provided in
   92  paragraph (a).
   93         (c) The final contract completion date must be at least 30
   94  days after the delivery of the list of items. If the list is not
   95  provided to the contractor by the agreed upon date for delivery
   96  of the list, the contract time for completion must be extended
   97  by the number of days the local governmental entity exceeded the
   98  delivery date. Damages may not be assessed against a contractor
   99  for failing to complete a project within the time required by
  100  the contract, unless the contractor failed to complete the
  101  project within the contract period as extended under this
  102  paragraph.
  103         (d) The failure to include any corrective work or pending
  104  items not yet completed on the list does not alter the
  105  responsibility of the contractor to complete all the
  106  construction services purchased pursuant to the contract.
  107         (e) Within 20 business days after the list is created, the
  108  local governmental entity must pay the contractor the remaining
  109  contract balance that includes all retainage previously withheld
  110  by the local governmental entity less an amount equal to 150
  111  percent of the estimated cost to complete the items on the list.
  112         (f) Upon completion of all items on the list, the
  113  contractor may submit a payment request for the amount all
  114  remaining retainage withheld by the local governmental entity
  115  pursuant to paragraph (e) this section. If a good faith dispute
  116  exists as to whether one or more items identified on the list
  117  have been completed pursuant to the contract, the local
  118  governmental entity may continue to withhold up to 150 percent
  119  of the total costs to complete such items.
  120         (g)(f) All items that require correction under the contract
  121  which and that are identified after the preparation and delivery
  122  of the list remain the obligation of the contractor as defined
  123  by the contract.
  124         (h)(g) Warranty items or items not included in the list of
  125  items required under paragraph (a) may not affect the final
  126  payment of retainage as provided in paragraph (e) this section
  127  or as provided in the contract between the contractor and its
  128  subcontractors and suppliers.
  129         (i)(h) Retainage may not be held by a local governmental
  130  entity or a contractor to secure payment of insurance premiums
  131  under a consolidated insurance program or series of insurance
  132  policies issued to a local governmental entity or a contractor
  133  for a project or group of projects, and the final payment of
  134  retainage as provided in this section may not be delayed pending
  135  a final audit by the local governmental entity’s or contractor’s
  136  insurance provider.
  137         (j)(i) If a local governmental entity fails to comply with
  138  its responsibilities to develop the list required under
  139  paragraph (a) or paragraph (b) within the time limitations
  140  provided in paragraph (a), the contractor may submit a payment
  141  request to the local governmental entity for the all remaining
  142  balance of the contract, including all remaining retainage
  143  withheld by the local governmental entity. The local
  144  governmental entity must pay the contractor pursuant to this
  145  section; and payment of any remaining undisputed contract
  146  amount, less any amount withheld pursuant to the contract for
  147  incomplete or uncorrected work, must be paid within 20 business
  148  days after receipt of a proper invoice or payment request. If
  149  the local governmental entity has provided written notice to the
  150  contractor specifying the failure of the contractor to meet
  151  contract requirements in the development of the list of items to
  152  be completed, the local governmental entity must pay the
  153  contractor the remaining balance of the contract, less an amount
  154  equal to 150 percent of the estimated cost to complete the items
  155  that the local governmental entity intended to include on the
  156  list need not pay or process any payment request for retainage
  157  if the contractor has, in whole or in part, failed to cooperate
  158  with the local governmental entity in the development of the
  159  list or to perform its contractual responsibilities, if any,
  160  with regard to the development of the list or if paragraph
  161  (8)(c) applies.
  162         (8)
  163         (c) This section does not require the local governmental
  164  entity to pay or release any amounts that are the subject of a
  165  good faith dispute made in writing pursuant to the contract or,
  166  the subject of a claim brought pursuant to s. 255.05, or
  167  otherwise the subject of a claim or demand by the local
  168  governmental entity or contractor.
  169         Section 2. Paragraph (a) of subsection (2) of section
  170  218.76, Florida Statutes, is amended to read:
  171         218.76 Improper payment request or invoice; resolution of
  172  disputes.—
  173         (2)(a) If a dispute arises between a vendor and a local
  174  governmental entity concerning payment of a payment request or
  175  an invoice, the dispute must shall be finally determined by the
  176  local governmental entity pursuant to a dispute resolution
  177  procedure established by the local governmental entity. Such
  178  procedure must provide that proceedings to resolve the dispute
  179  commence are commenced within 30 45 days after the date the
  180  payment request or proper invoice was received by the local
  181  governmental entity and conclude concluded by final decision of
  182  the local governmental entity within 45 60 days after the date
  183  the payment request or proper invoice was received by the local
  184  governmental entity. Such procedures are not subject to chapter
  185  120 and do not constitute an administrative proceeding that
  186  prohibits a court from deciding de novo any action arising out
  187  of the dispute. If the dispute is resolved in favor of the local
  188  governmental entity, interest charges begin to accrue 15 days
  189  after the local governmental entity’s final decision. If the
  190  dispute is resolved in favor of the vendor, interest begins to
  191  accrue as of the original date the payment became due.
  192         Section 3. Subsection (2) of section 255.073, Florida
  193  Statutes, is amended to read:
  194         255.073 Timely payment for purchases of construction
  195  services.—
  196         (2) If a public entity disputes a portion of a payment
  197  request, the undisputed portion must be timely paid by the date
  198  required under the contract or by 20 business days after receipt
  199  of the request, whichever is earlier.
  200         Section 4. Subsection (3) of section 255.074, Florida
  201  Statutes, is amended to read:
  202         255.074 Procedures for calculation of payment due dates.—
  203         (3) A public entity must submit a payment request to the
  204  Chief Financial Officer for payment no later more than 14 20
  205  days after receipt of the payment request.
  206         Section 5. Present subsections (4) through (8) of section
  207  255.077, Florida Statutes, are redesignated as subsections (5)
  208  through (9), respectively, a new subsection (4) is added to that
  209  section, and subsection (1) and present subsection (8) of that
  210  section are amended, to read:
  211         255.077 Project closeout and payment of retainage.—
  212         (1) Each contract for construction services between a
  213  public entity and a contractor must provide for the development
  214  of a list of items and the estimated cost to complete each item
  215  on the list required to render complete, satisfactory, and
  216  acceptable the construction services purchased by the public
  217  entity. The contract must specify the process for the
  218  development of the list and for determining the cost to complete
  219  each item on the list, and should include the, including
  220  responsibilities of the public entity and the contractor in
  221  developing and reviewing the list and a reasonable time for
  222  developing the list, as follows:
  223         (a) For construction projects having an estimated cost of
  224  less than $10 million, within 30 calendar days after reaching
  225  substantial completion of the construction services purchased as
  226  defined in the contract, or, if not defined in the contract,
  227  upon reaching beneficial occupancy or use; or
  228         (b) For construction projects having an estimated cost of
  229  $10 million or more, within 30 calendar days, unless otherwise
  230  extended by contract not to exceed 45 60 calendar days, after
  231  reaching substantial completion of the construction services
  232  purchased as defined in the contract, or, if not defined in the
  233  contract, upon reaching beneficial occupancy or use.
  234         (4) Within 20 business days after developing the list, and
  235  after receipt of a proper invoice or payment request, the public
  236  entity must pay the contractor the remaining balance of the
  237  contract, including any remaining retainage withheld by the
  238  public entity pursuant to s. 255.078, less an amount equal to
  239  150 percent of the estimated cost to complete the items on the
  240  list.
  241         (9)(8) If a public entity fails to comply with its
  242  responsibilities to develop the list required under subsection
  243  (1) or subsection (2), as defined in the contract, within the
  244  time limitations provided in subsection (1), the contractor may
  245  submit a payment request for all remaining retainage withheld by
  246  the public entity pursuant to s. 255.078 and the public entity
  247  must pay the contractor all remaining retainage previously
  248  withheld within 20 days after receipt of the payment request.
  249  The public entity is not required to need not pay or process any
  250  payment request for retainage if the contractor has, in whole or
  251  in part, failed to cooperate with the public entity in the
  252  development of the list or failed to perform its contractual
  253  responsibilities, if any, with regard to the development of the
  254  list or if s. 255.078(3) applies.
  255         Section 6. Subsection (3) of section 255.078, Florida
  256  Statutes, is amended to read:
  257         255.078 Public construction retainage.—
  258         (3) This section and s. 255.077 do not require the public
  259  entity to pay or release any amounts that are the subject of a
  260  good faith dispute made in writing pursuant to the contract or,
  261  the subject of a claim brought pursuant to s. 255.05, or
  262  otherwise the subject of a claim or demand by the public entity
  263  or contractor.
  264         Section 7. Paragraph (b) of subsection (1) of section
  265  255.0992, Florida Statutes, is amended to read:
  266         255.0992 Public works projects; prohibited governmental
  267  actions.—
  268         (1) As used in this section, the term:
  269         (b) “Public works project” means an activity exceeding $1
  270  million in value that is paid for with any state-appropriated
  271  funds and that which consists of the construction, maintenance,
  272  repair, renovation, remodeling, or improvement of a building,
  273  road, street, sewer, storm drain, water system, site
  274  development, irrigation system, reclamation project, gas or
  275  electrical distribution system, gas or electrical substation, or
  276  other facility, project, or portion thereof that is owned in
  277  whole or in part by any political subdivision.
  278         Section 8. This act shall take effect July 1, 2023.