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: 54 218.735Timely 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 entitys or contractors 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: 171 218.76Improper 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 entitys 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: 194 255.073Timely 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: 202 255.074Procedures 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: 211 255.077Project 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: 257 255.078Public 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: 266 255.0992Public 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.