Florida Senate - 2023 CS for SB 346 By the Committee on Community Affairs; and Senator DiCeglie 578-02612-23 2023346c1 1 A bill to be entitled 2 An act relating to public construction; amending s. 3 218.735, F.S.; requiring that a certain list include a 4 dollar valuation, as reasonably determined by the 5 contractor as a portion of the contract value, of the 6 estimated cost to complete each item on the list; 7 deleting a provision authorizing an extension by 8 contract for construction projects of less than $10 9 million; requiring a local governmental entity to pay 10 a contractor the remaining contract balance within a 11 specified timeframe; revising the conditions that 12 would require a local governmental entity to pay 13 unpaid contract sums to a contractor if a specified 14 list is not developed; requiring a local governmental 15 entity to pay the remaining contract balance if the 16 local governmental entity provided a certain written 17 notice to the contractor; revising the conditions that 18 require a local governmental entity to pay or release 19 amounts subject to certain disputes or claims; 20 amending s. 218.76, F.S.; revising the timeframe 21 within which proceedings must commence to resolve 22 disputes between vendors and local governmental 23 entities; revising the timeframe for such proceedings 24 to conclude; amending s. 255.073, F.S.; requiring that 25 undisputed portions of payment requests be paid within 26 a specified timeframe; amending s. 255.074, F.S.; 27 revising the timeframe for a public entity to submit a 28 payment request to the Chief Financial Officer; 29 amending s. 255.077, F.S.; requiring that a certain 30 list include a dollar valuation, as determined by the 31 contractor as a portion of the contract value, to 32 complete each item on the list; requiring the public 33 entity to pay the contractor the remaining contract 34 balance within a specified timeframe; requiring a 35 public entity to pay all remaining retainage if the 36 public entity has not developed a specified list; 37 amending s. 255.078, F.S.; revising the conditions 38 that require a public entity to pay or release amounts 39 subject to certain disputes or claims; amending s. 40 255.0992, F.S.; revising the definition of the term 41 public works project; providing an effective date. 42 43 Be It Enacted by the Legislature of the State of Florida: 44 45 Section 1.Subsection (7) and paragraph (c) of subsection 46 (8) of section 218.735, Florida Statutes, are amended to read: 47 218.735Timely payment for purchases of construction 48 services. 49 (7)Each contract for construction services between a local 50 governmental entity and a contractor must provide for the 51 development of a single list of items required to render 52 complete, satisfactory, and acceptable the construction services 53 purchased by the local governmental entity, which must include a 54 dollar valuation, as reasonably determined by the contractor as 55 a portion of the contract value, of the estimated cost to 56 complete each item on the list. 57 (a)The contract must specify the process for developing 58 the list, including the responsibilities of the local 59 governmental entity and the contractor in developing and 60 reviewing the list and a reasonable time for developing the 61 list: 62 1.For construction projects having an estimated cost of 63 less than $10 million, within 30 calendar days after reaching 64 substantial completion of the construction services purchased as 65 defined in the contract, or, if not defined in the contract, 66 upon reaching beneficial occupancy or use; or 67 2.For construction projects having an estimated cost of 68 $10 million or more, within 30 calendar days, or, if extended by 69 contract, up to 60 calendar days after reaching substantial 70 completion of the construction services purchased as defined in 71 the contract, or, if not defined in the contract, upon reaching 72 beneficial occupancy or use. 73 74 The contract must also specify a date for the delivery of the 75 list of items, not to exceed 5 days after the list of items has 76 been developed and reviewed in accordance with the time periods 77 set forth in subparagraphs 1. and 2. 78 (b)If the contract between the local governmental entity 79 and the contractor relates to the purchase of construction 80 services on more than one building or structure, or involves a 81 multiphased project, the contract must provide for the 82 development of a list of items required to render complete, 83 satisfactory, and acceptable all the construction services 84 purchased pursuant to the contract for each building, structure, 85 or phase of the project within the time limitations provided in 86 paragraph (a). 87 (c)The final contract completion date must be at least 30 88 days after the delivery of the list of items. If the list is not 89 provided to the contractor by the agreed upon date for delivery 90 of the list, the contract time for completion must be extended 91 by the number of days the local governmental entity exceeded the 92 delivery date. Damages may not be assessed against a contractor 93 for failing to complete a project within the time required by 94 the contract, unless the contractor failed to complete the 95 project within the contract period as extended under this 96 paragraph. 97 (d)The failure to include any corrective work or pending 98 items not yet completed on the list does not alter the 99 responsibility of the contractor to complete all the 100 construction services purchased pursuant to the contract. 101 (e)Within 20 days after the date the list is created, the 102 local governmental entity must pay the contractor the remaining 103 contract balance that includes all retainage previously withheld 104 by the local governmental entity. The remaining contract balance 105 does not include the estimated costs to complete the items 106 included on the list. 107 (f)Upon completion of all items on the list, the 108 contractor may submit a payment request for all remaining 109 contract sums retainage withheld by the local governmental 110 entity pursuant to this section. If a good faith dispute exists 111 as to whether one or more items identified on the list have been 112 completed pursuant to the contract, the local governmental 113 entity may continue to withhold up to 150 percent of the total 114 costs to complete such items. 115 (g)(f)All items that require correction under the contract 116 which and that are identified after the preparation and delivery 117 of the list remain the obligation of the contractor as defined 118 by the contract. 119 (h)(g)Warranty items or items not included in the list of 120 items required under paragraph (a) may not affect the final 121 payment of retainage as provided in paragraph (e) this section 122 or as provided in the contract between the contractor and its 123 subcontractors and suppliers. 124 (i)(h)Retainage may not be held by a local governmental 125 entity or a contractor to secure payment of insurance premiums 126 under a consolidated insurance program or series of insurance 127 policies issued to a local governmental entity or a contractor 128 for a project or group of projects, and the final payment of 129 retainage as provided in paragraph (e) this section may not be 130 delayed pending a final audit by the local governmental entitys 131 or contractors insurance provider. 132 (j)(i)If a local governmental entity fails to comply with 133 its responsibilities to develop the list required under 134 paragraph (a) or paragraph (b) within the time limitations 135 provided in paragraph (a), the contractor may submit a payment 136 request for all remaining unpaid contract sums, including 137 retainage withheld by the local governmental entity, and the 138 local governmental entity must pay the contractor all remaining 139 contract sums pursuant to this section; and payment of any 140 remaining undisputed contract amount, less any amount withheld 141 pursuant to the contract for incomplete or uncorrected work, 142 must be paid within 20 business days after receipt of a proper 143 invoice or payment request. If the local governmental entity has 144 provided written notice to the contractor specifying the failure 145 of the contractor to meet contract requirements in the 146 development of the list of items to be completed, the local 147 governmental entity must pay the contractor the remaining 148 contract balance that includes retainage previously withheld by 149 the local governmental entity. The remaining contract balance 150 does not include 150 percent of the estimated costs to complete 151 the items that the local governmental entity has included on its 152 version of the list need not pay or process any payment request 153 for retainage if the contractor has, in whole or in part, failed 154 to cooperate with the local governmental entity in the 155 development of the list or to perform its contractual 156 responsibilities, if any, with regard to the development of the 157 list or if paragraph (8)(c) applies. 158 (8) 159 (c)This section does not require the local governmental 160 entity to pay or release any amounts that are the subject of a 161 good faith dispute or, the subject of a claim brought pursuant 162 to s. 255.05, or otherwise the subject of a claim or demand by 163 the local governmental entity or contractor. 164 Section 2.Paragraph (a) of subsection (2) of section 165 218.76, Florida Statutes, is amended to read: 166 218.76Improper payment request or invoice; resolution of 167 disputes. 168 (2)(a)If a dispute arises between a vendor and a local 169 governmental entity concerning payment of a payment request or 170 an invoice, the dispute must shall be finally determined by the 171 local governmental entity pursuant to a dispute resolution 172 procedure established by the local governmental entity. Such 173 procedure must provide that proceedings to resolve the dispute 174 commence are commenced within 30 45 days after the date the 175 payment request or proper invoice was received by the local 176 governmental entity and conclude concluded by final decision of 177 the local governmental entity within 45 60 days after the date 178 the payment request or proper invoice was received by the local 179 governmental entity. Such procedures are not subject to chapter 180 120 and do not constitute an administrative proceeding that 181 prohibits a court from deciding de novo any action arising out 182 of the dispute. If the dispute is resolved in favor of the local 183 governmental entity, interest charges begin to accrue 15 days 184 after the local governmental entitys final decision. If the 185 dispute is resolved in favor of the vendor, interest begins to 186 accrue as of the original date the payment became due. 187 Section 3.Subsection (2) of section 255.073, Florida 188 Statutes, is amended to read: 189 255.073Timely payment for purchases of construction 190 services. 191 (2)If a public entity disputes a portion of a payment 192 request, the undisputed portion must be timely paid within the 193 time required under the contract or within 20 days, whichever is 194 earlier. 195 Section 4.Subsection (3) of section 255.074, Florida 196 Statutes, is amended to read: 197 255.074Procedures for calculation of payment due dates. 198 (3)A public entity must submit a payment request to the 199 Chief Financial Officer for payment no later more than 14 20 200 days after receipt of the payment request. 201 Section 5.Present subsections (4) through (8) of section 202 255.077, Florida Statutes, are redesignated as subsections (5) 203 through (9), respectively, a new subsection (4) is added to that 204 section, and subsection (1) and present subsection (8) of that 205 section are amended, to read: 206 255.077Project closeout and payment of retainage. 207 (1)Each contract for construction services between a 208 public entity and a contractor must provide for the development 209 of a list of items required to render complete, satisfactory, 210 and acceptable the construction services purchased by the public 211 entity. The list must include a dollar valuation, as reasonably 212 determined by the contractor as a portion of the contract value, 213 of the estimated cost to complete the items included on the 214 list. The contract must specify the process for the development 215 of the list, including responsibilities of the public entity and 216 the contractor in developing and reviewing the list and a 217 reasonable time for developing the list, as follows: 218 (a)For construction projects having an estimated cost of 219 less than $10 million, within 30 calendar days after reaching 220 substantial completion of the construction services purchased as 221 defined in the contract, or, if not defined in the contract, 222 upon reaching beneficial occupancy or use; or 223 (b)For construction projects having an estimated cost of 224 $10 million or more, within 30 calendar days, unless otherwise 225 extended by contract not to exceed 60 calendar days, after 226 reaching substantial completion of the construction services 227 purchased as defined in the contract, or, if not defined in the 228 contract, upon reaching beneficial occupancy or use. 229 (4)Within 20 days after the date the list is created, the 230 public entity must pay the contractor the remaining contract 231 balance that includes all retainage previously withheld by the 232 public entity. The remaining contract balance does not include 233 the costs to complete the items included on the list. 234 (9)(8)If a public entity fails to comply with its 235 responsibilities to develop the list required under subsection 236 (1) or subsection (2), as defined in the contract, within the 237 time limitations provided in subsection (1), the contractor may 238 submit a payment request for all remaining retainage withheld by 239 the public entity pursuant to s. 255.078 and the public entity 240 must pay the contractor all remaining retainage previously 241 withheld within 20 days after receipt of the payment request. 242 The public entity is not required to need not pay or process any 243 payment request for retainage if the contractor has, in whole or 244 in part, failed to cooperate with the public entity in the 245 development of the list or failed to perform its contractual 246 responsibilities, if any, with regard to the development of the 247 list or if s. 255.078(3) applies. 248 Section 6.Subsection (3) of section 255.078, Florida 249 Statutes, is amended to read: 250 255.078Public construction retainage. 251 (3)This section and s. 255.077 do not require the public 252 entity to pay or release any amounts that are the subject of a 253 good faith dispute or, the subject of a claim brought pursuant 254 to s. 255.05, or otherwise the subject of a claim or demand by 255 the public entity or contractor. 256 Section 7.Paragraph (b) of subsection (1) of section 257 255.0992, Florida Statutes, is amended to read: 258 255.0992Public works projects; prohibited governmental 259 actions. 260 (1)As used in this section, the term: 261 (b)Public works project means an activity exceeding 262 $350,000 $1 million in value that is paid for with any local or 263 state-appropriated funds and that which consists of the 264 construction, maintenance, repair, renovation, remodeling, or 265 improvement of a building, road, street, sewer, storm drain, 266 water system, site development, irrigation system, reclamation 267 project, gas or electrical distribution system, gas or 268 electrical substation, or other facility, project, or portion 269 thereof that is owned in whole or in part by any political 270 subdivision. 271 Section 8.This act shall take effect July 1, 2023.