This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0149z1.CRG.docx
DATE: 6/4/2024
HOUSE OF REPRESENTATIVES STAFF FINAL BILL ANALYSIS
BILL #: CS/CS/CS/HB 149 Continuing Contracts
SPONSOR(S): State Affairs Committee and State Administration & Technology Appropriations Subcommittee
and Constitutional Rights, Rule of Law & Government Operations Subcommittee, Alvarez and others
TIED BILLS: IDEN./SIM. BILLS: CS/CS/SB 656
FINAL HOUSE FLOOR ACTION: 112 Y’s
0 N’s GOVERNOR’S ACTION: Approved
SUMMARY ANALYSIS
CS/CS/CS/HB 149 passed the House on February 28, 2024, and subsequently passed the Senate on March 1,
2024.
In 1973, the Florida Legislature enacted the Consultants’ Competitive Negotiation Act (CCNA), which requires
state and local government agencies to procure the professional services of an architect, professional
engineer, landscape architect, or registered surveyor and mapper using a qualifications-based selection
process. Qualifications-based selection is a process whereby service providers are retained on the basis of
competency, qualifications, and experience, rather than price.
The CCNA does not prohibit a continuing contract between a firm and an agency. A “continuing contract” is a
contract for professional services entered into in accordance with the CCNA between a government agency
and a firm whereby the firm provides professional services to the agency for several projects. The CCNA
prohibits firms that are parties to a continuing contract from being required to bid against one another. Current
law authorizes the use of a continuing contract for construction projects in which the estimated construction
cost of each project does not exceed $4 million, for study activities if the fee for professional services for each
study does not exceed $500,000, or for work of a specified nature as outlined in the contract required by the
agency, with the contract being for a fixed term or with no time limitation except the contract must include a
termination clause.
The bill increases the maximum limit for continuing contracts covered by the CCNA from an estimated per-
project construction cost of $4 million to $7.5 million plus an annual increase based on the Consumer Price
Index (CPI). Beginning July 1, 2025, the bill requires the Department of Management Services to adjust
annually the maximum amount allowed for each individual project in a continuing contract by using the change
in the June-to-June CPI and to publish the adjusted amount on its website.
The bill may have a positive, yet indeterminate fiscal impact on state and local government expenditures by
increasing the dollar threshold for continuing contracts. See Fiscal Comments.
The bill was approved by the Governor on May 28, 2024, ch. 2024-204, L.O.F., and will become effective on
July 1, 2024.
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I. SUBSTANTIVE INFORMATION
A. EFFECT OF CHANGES:
Present Situation
Consultant’s Competitive Negotiation Act
In 1972, Congress passed the Brooks Act,
1
which requires federal agencies to use a qualifications-
based selection process for architectural, engineering, and associated services, such as mapping and
surveying. Qualifications-based selection is a process whereby service providers are retained on the
basis of competency, qualifications, and experience, rather than price.
In 1973, the Florida Legislature enacted the Consultants’ Competitive Negotiation Act (CCNA),
2
which
is modeled after the Brooks Act. The CCNA requires state and local government agencies
3
to procure
the professional services
4
of an architect, professional engineer, landscape architect, or registered
surveyor and mapper using a qualifications-based selection process.
5
CCNA Procurement Process
The CCNA establishes a three-phrase process for procuring professional services:
Phase 1 – Public announcement and qualification.
Phase 2 – Competitive solicitation.
Phase 3 – Competitive negotiation.
During Phase 1, the public announcement and qualification phase, state and local agencies must
publicly announce each occasion when professional services will be purchased for one of the following:
A project,
6
when the basic construction cost is estimated by the agency to exceed $325,000; or
A planning or study activity, when the fee for professional services exceeds $35,000.
7
The public notice must include a general description of the project and indicate how interested firms
8
may apply for consideration.
9
A firm that wishes to provide professional services to an agency must first
be certified by the agency as qualified to provide the needed services pursuant to law and the agency’s
regulations.
10
In determining whether a firm is qualified, the agency must consider the capabilities,
adequacy of personnel, past record, and experience of the firm as well as whether the firm is a certified
minority business enterprise.
11
Each agency must encourage firms desiring to provide professional
services to the agency to submit annual statements of qualifications and performance data.
12
1
Pub. L. 92-582, 86 Stat. 1278 (1972).
2
Ch. 73-19, Laws of Fla., codified as s. 287.055, F.S.
3
“Agency” means the state, a state agency, a municipality, a political subdivision, a school district, or a school board. The term
“agency” does not extend to a nongovernmental developer that contributes public facilities to a political subdivision under s. 380.06,
F.S., or ss. 163.3220-163.3243, F.S. S. 287.055(2)(b), F.S.
4
“Professional services” means those services within the scope of the practice of architecture, professional engineering, landscape
architecture, or registered surveying and mapping, as defined by the laws of the state, or those performed by any architect, professional
engineer, landscape architect, or registered surveyor and mapper in connection with his or her professional employment or practice. S.
287.055(2)(a), F.S.
5
S. 287.055, F.S.
6
“Project” means that fixed capital outlay study or planning activity described in the public notice of the state or a state agency under s.
287.055(3)(a), F.S., and may include:
A grouping of minor construction, rehabilitation, or renovation activities.
A grouping of substantially similar construction, rehabilitation, or renovation activities. S. 287.055(2)(f), F.S.
7
S. 287.055(3)(a)1., F.S. As used in the statute, CATEGORY TWO refers to purchases of $35,000 or more and CATEGORY FIVE
refers to purchases of $325,000 or more. S. 287.017, F.S.
8
“Firm” means any individual, firm, partnership, corporation, association, or other legal entity permitted by law to practice architecture,
engineering, or surveying and mapping in the state. S. 287.055(2)(c), F.S.
9
S. 287.055(3)(a)1., F.S.
10
S. 287.055(3)(c), F.S.
11
S. 287.055(3)(c) and (d), F.S.
12
S. 287.055(3)(b), F.S.
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During Phase 2, the competitive selection phase, an agency must evaluate the qualifications and past
performance of interested firms and conduct discussions with at least three firms regarding their
qualifications, approach to the project, and ability to furnish the required services.
13
The agency must
then select at least three firms, ranked in order of preference, that it considers the most highly qualified
to perform the required services. In determining whether a firm is qualified, the agency must consider
such factors as the ability of professional personnel; whether a firm is a certified minority business
enterprise; past performance; willingness to meet time and budget requirements; location; recent,
current, and projected workloads of the firm; and the volume of work previously awarded to each firm
by the agency, with the goal of equitably distributing contracts among qualified firms, provided such
distribution does not violate the principle of selecting the most highly qualified firms. During this phase,
the CCNA prohibits the agency from requesting, accepting, or considering proposals for the
compensation
14
to be paid.
15,16
During Phase 3, the competitive negotiation phase, an agency must first negotiate compensation with
the highest ranked firm. If the agency is unable to negotiate a satisfactory contract with that firm at a
price the agency determines to be fair, competitive, and reasonable, negotiations with the firm must be
formally terminated. The agency must then negotiate with the remaining ranked firms, in order of rank,
and follow the same process until an agreement is reached. If the agency is unable to negotiate a
satisfactory contract with any of the ranked firms, the agency must select additional firms, ranked in the
order of competence and qualification without regard to price, and continue negotiations until an
agreement is reached.
17
Continuing Contracts under the CCNA
The CCNA does not prohibit a continuing contract
18
between a firm and an agency.
19
A “continuing
contract” is a contract for professional services entered into in accordance with the CCNA between an
agency and a firm whereby the firm provides professional services to the agency for projects where the
estimated cost of each project does not exceed a specified amount.
20
The CCNA prohibits firms that
are parties to a continuing contract from being required to bid against one another.
21
Current law authorizes the use of a continuing contract for construction projects in which the estimated
construction cost of each individual project under the contract does not exceed $4 million, for study
activities if the fee for professional services for each individual study under the contract does not
exceed $500,000, or for work of a specified nature as outlined in the contract required by the agency,
with the contract being for a fixed term or with no time limitation except the contract must include a
termination clause.
22
The maximum per-project and per-study limits were put in place by the Legislature
in 1988
23
and subsequently increased three times. In 1988, the maximum per-project and per-study
limits were $500,000 and $25,000, respectively;
24
in 2002, the limits were increased to $1 million and
$50,000;
25
in 2009, the limits were increased to $2 million and $200,000;
26
and in 2020, the limits were
increased to $4 million and $500,000.
27
13
S. 287.055(4)(a), F.S.
14
“Compensation” means the amount paid by the agency for professional services regardless of whether stated as compensation or
stated as hourly rates, overhead rates, or other figures or formulas from which compensation can be calculated. S. 287.055(2)(d), F.S.
15
S. 287.055(4)(b), F.S.
16
The CCNA did not prohibit discussion of compensation in the competitive selection phase until 1988, when the Legislature enacted a
provision that allows consideration of compensation to occur only during the competitive negotiation phase. Ch. 88-108, L.O.F.
17
S. 287.055(5), F.S.
18
See s. 287.055(2)(g), F.S.
19
S. 287.055(4)(d), F.S.
20
S. 287.055(2)(g), F.S.
21
Id.
22
S. 287.055(2)(g), F.S. An entity may not use a continuing contract for work of a specified nature to exceed the monetary limits placed
on construction projects and study activities. Op. Fla. Att’y Gen. 2013-28 (2013).
23
Ch. 88-108, Laws of Fla.
24
Id.
25
Ch. 2002-20, Laws of Fla.
26
Ch. 2009-227, Laws of Fla.
27
Ch. 2020-127, Laws of Fla.
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Construction and Program Management Entities
Current law authorizes governmental entities
28
to contract with a construction management entity or a
program management entity.
29
A construction management entity is responsible for construction project
scheduling and coordination in both preconstruction and construction phases and is generally
responsible for the successful, timely, and economical completion of a construction project.
30
A
program management entity is responsible for schedule control, cost control, and coordination in
providing or procuring planning, design, and construction services.
31
Both construction and program
management entities must be procured pursuant to the CCNA and must consist of, or contract with,
licensed or registered professionals for the specific fields or areas of construction.
32
The governmental
entity procuring the services of a construction management or program management entity may choose
to enter into a continuing contract
33
pursuant to the CCNA for construction projects where the estimated
construction cost of each project does not exceed $4 million.
34
Construction Cost
Construction costs have seen an upswing since 2020, largely driven by a confluence of factors
exacerbated by the COVID-19 pandemic.
35
Escalating prices of essential materials, such as steel and
lumber, influenced by disruptions in global supply chains, are prominent contributors as well as general
inflation in the economy. In addition, labor shortages have led to higher wages, further impacting costs.
However, construction input prices
36
have stabilized recently, falling about one percentage point from
October 2022 to October 2023. The following chart shows the percent change to certain construction
input and commodity prices as of October 2023:
37
28
“Governmental entity” means a county, municipality, school district, special district as defined in ch. 189, F.S., or political subdivision
of the state. S. 255.103(1), F.S.
29
S. 255.103, F.S.
30
S. 255.103(2), F.S.
31
S. 255.103(3), F.S.
32
S. 255.103, F.S.
33
A continuing contract, for purposes of procuring a construction or program management entity, means a contract for work during a
defined period on construction projects described by type, which may or may not be identified at the time of entering into the contract.
S. 255.103(4), F.S.
34
S. 255.103(4), F.S.
35
Point Acquisitions, Construction Costs Rising in 2022: Here’s Why It’s Happening, available at https://pointacquisitions.com/2022-
rising-construction-costs/ (last visited November 30, 2023).
36
Construction input prices refer to the costs associated with materials, labor, and other resources used in the construction industry.
37
See United States Department of Labor Bureau of Labor Statistics, Producer Price Index Detailed Reports for February 2020 and
October 2023, available at: https://www.bls.gov/ppi/detailed-report/#2023 (last visited December 1, 2023).
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1-month 12-month Since Feb. 2020
Inputs to Industries
Inputs to construction -1.2% -1.1% 33.1%
Inputs to multifamily construction -0.9% 0.8% 32.4%
Inputs to nonresidential construction -1.1% -0.7% 33.6%
Inputs to commercial construction -0.7% -0.3% 33.6%
Inputs to healthcare construction -0.7% -0.2% 33.4%
Inputs to industrial construction -0.9% 1.1% 30.7%
Inputs to other nonresidential construction -1.2% -0.9% 33.7%
Inputs to maintenance and repair construction -1.3% -2.0% 31.8%
Inputs to highway and street construction -1.2% 0.0% 31.4%
Commodities
Adhesives and sealants 0.1% 1.8% 28.9%
Concrete products 0.7% 9.7% 30.5%
Construction machinery and equipment 0.0% 6.0% 23.6%
Copper wire and cable -1.3% 2.7% 24.2%
Crude petroleum -2.9% -3.0% 56.9%
Fabricated structural metal products 0.8% -0.7% 42.3%
Insulation materials -0.3% 1.6% 31.0%
Iron and Steel -2.3% -6.1% 40.79%
Lumber and wood products -0.3% -6.5% 22.3%
Natural gas 10.9% -54.9% 40.8%
Plumbing fixtures and brass fittings 0.5% 1.4% 16.1%
Prepared asphalt, tar roofing, and siding products 0.7% 3.9% 34.4%
Steel mill products -2.5% -9.9% 47.0%
Switchgear, switchboard, industrial controls equipment 0.2% 6.3% 32.0%
Unprocessed energy materials -0.3% -16.2% 60.2%
Consumer Price Index
The Consumer Price Index (CPI), compiled by the United States Department of Labor and published
monthly, measures the average change over time in the prices paid by urban consumers for a specified
grouping of consumer goods and services.
38
The CPI encompasses various categories including food,
housing, clothing, medical care, and transportation, and provides a comprehensive view of price
movements. It serves as a key indicator of inflation and aids policymakers, businesses, and the public
by offering insights into inflation trends and potential economic impacts.
39
The CPI increased by
approximately 19 percent from February 2020 to October 2023. Comparatively, the CPI increased
approximately 3 percent from October 2022 to October 2023.
40
Effect of the Bill
The bill increases the maximum limit for continuing contracts covered by the CCNA from an estimated
per-project construction cost of $4 million to $7.5 million plus an annual percentage increase based on
the CPI. Beginning July 1, 2025, and each July 1 thereafter, the Department of Management Services
(DMS) must adjust the maximum amount allowed on the preceding June 30 for each individual project
in a continuing contract by using the change in the June-to-June CPI for All Urban Consumers issued
38
The CPI for All Urban Consumers (CPI-U) is the “headline CPI number” and the one most often cited. However, the United States
Department of Labor publishes other indexes, such as the CPI for Urban Wage Earners and Clerical Workers (CPI-W), the Chained
CPI for All Urban Consumers (C-CPI-U), and an average price index. See United States Department of Labor Bureau of Labor
Statistics, Consumer Price Index: Presentation, available at https://www.bls.gov/opub/hom/cpi/presentation.htm#interpreting-an-index
(last visited January 30, 2023).
39
United States Department of Labor Bureau of Labor Statistics, Consumer Price Indexes Overview, available at
https://www.bls.gov/cpi/overview.htm (last visited December 1, 2023).
40
See United States Department of Labor Bureau of Labor Statistics, CPI Inflation Calculator, available at
https://www.bls.gov/data/inflation_calculator.htm (last visited December 1, 2023).
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by the Bureau of Labor Statistics of the United States Department of Labor. The bill requires DMS to
publish the adjusted amount on its website.
B. SECTION DIRECTORY:
Section 1 amends s. 255.103, F.S., relating to construction management or program management
entities.
Section 2 amends s. 287.055, F.S., relating to acquisition of professional architectural, engineering,
landscape architectural, or surveying and mapping services; definitions; procedures; contingent fees
prohibited; penalties.
Section 3 provides an effective date of July 1, 2024.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
See Fiscal Comments.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
See Fiscal Comments.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may have a positive, yet indeterminate fiscal impact on private sector businesses that provide
professional services as defined in the CCNA, or that provide construction management or project
management services, by allowing those entities to enter into larger contracts for projects under a
continuing contract. Increasing the threshold for entering into continuing contracts would save those
entities contractual and workload expenditures associated with having to undergo the CCNA
procurement process for projects that exceed the current statutory threshold.
D. FISCAL COMMENTS:
The bill may have a positive, yet indeterminate fiscal impact on state and local government
expenditures by allowing the state or local government to enter into larger continuing contracts under
the CCNA. By retaining a larger continuing contract under the CCNA, the state or a local government
could potentially save on contractual and workload expenditures associated with the procurement of
services on a per-project basis. Governments, however, may spend more on these contracts as they
are adjusted based on CPI increases.
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In addition, DMS may incur costs related to its requirement to annually adjust the maximum amount
allowed for each individual project in a continuing contract based on the June-to-June CPI and to
publish that amount on its website; however, any additional costs should be absorbed within existing
resources.