Bill Text: FL S0246 | 2020 | Regular Session | Comm Sub
Bill Title: Public Construction
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2020-02-19 - Laid on Table, refer to CS/HB 101 [S0246 Detail]
Download: Florida-2020-S0246-Comm_Sub.html
Florida Senate - 2020 CS for SB 246
By the Committee on Governmental Oversight and Accountability;
and Senator Hooper
585-00860-20 2020246c1
1 A bill to be entitled
2 An act relating to public construction; amending s.
3 218.735, F.S.; revising the amount of retainage that
4 certain local governmental entities and contractors
5 may withhold from progress payments for any
6 construction services contract; conforming a provision
7 to changes made by the act; amending s. 255.05, F.S.;
8 revising requirements for Department of Management
9 Services rules governing certain contracts; amending
10 s. 255.077, F.S.; conforming a cross-reference;
11 amending s. 255.078, F.S.; revising the amounts of
12 retainage that certain public entities and contractors
13 may withhold from progress payments for any
14 construction services contract; conforming a provision
15 to changes made by the act; providing applicability;
16 providing an effective date.
17
18 Be It Enacted by the Legislature of the State of Florida:
19
20 Section 1. Paragraph (i) of subsection (7) and subsection
21 (8) of section 218.735, Florida Statutes, are amended to read:
22 218.735 Timely payment for purchases of construction
23 services.—
24 (7) Each contract for construction services between a local
25 governmental entity and a contractor must provide for the
26 development of a single list of items required to render
27 complete, satisfactory, and acceptable the construction services
28 purchased by the local governmental entity.
29 (i) If a local governmental entity fails to comply with its
30 responsibilities to develop the list required under paragraph
31 (a) or paragraph (b) within the time limitations provided in
32 paragraph (a), the contractor may submit a payment request for
33 all remaining retainage withheld by the local governmental
34 entity pursuant to this section; and payment of any remaining
35 undisputed contract amount, less any amount withheld pursuant to
36 the contract for incomplete or uncorrected work, must be paid
37 within 20 business days after receipt of a proper invoice or
38 payment request. If the local governmental entity has provided
39 written notice to the contractor specifying the failure of the
40 contractor to meet contract requirements in the development of
41 the list of items to be completed, the local governmental entity
42 need not pay or process any payment request for retainage if the
43 contractor has, in whole or in part, failed to cooperate with
44 the local governmental entity in the development of the list or
45 to perform its contractual responsibilities, if any, with regard
46 to the development of the list or if paragraph (8)(c) (8)(f)
47 applies.
48 (8)(a) With regard to any contract for construction
49 services, a local governmental entity may withhold from each
50 progress payment made to the contractor an amount not exceeding
51 5 10 percent of the payment as retainage until 50-percent
52 completion of such services.
53 (b) After 50-percent completion of the construction
54 services purchased pursuant to the contract, the local
55 governmental entity must reduce to 5 percent the amount of
56 retainage withheld from each subsequent progress payment made to
57 the contractor. For purposes of this subsection, the term “50
58 percent completion” has the meaning set forth in the contract
59 between the local governmental entity and the contractor or, if
60 not defined in the contract, the point at which the local
61 governmental entity has expended 50 percent of the total cost of
62 the construction services purchased as identified in the
63 contract together with all costs associated with existing change
64 orders and other additions or modifications to the construction
65 services provided for in the contract. However, notwithstanding
66 this subsection, a municipality having a population of 25,000 or
67 fewer, or a county having a population of 100,000 or fewer, may
68 withhold retainage in an amount not exceeding 10 percent of each
69 progress payment made to the contractor until final completion
70 and acceptance of the project by the local governmental entity.
71 (c) After 50-percent completion of the construction
72 services purchased pursuant to the contract, the contractor may
73 elect to withhold retainage from payments to its subcontractors
74 at a rate higher than 5 percent. The specific amount to be
75 withheld must be determined on a case-by-case basis and must be
76 based on the contractor’s assessment of the subcontractor’s past
77 performance, the likelihood that such performance will continue,
78 and the contractor’s ability to rely on other safeguards. The
79 contractor shall notify the subcontractor, in writing, of its
80 determination to withhold more than 5 percent of the progress
81 payment and the reasons for making that determination, and the
82 contractor may not request the release of such retained funds
83 from the local governmental entity.
84 (d) After 50-percent completion of the construction
85 services purchased pursuant to the contract, the contractor may
86 present to the local governmental entity a payment request for
87 up to one-half of the retainage held by the local governmental
88 entity. The local governmental entity shall promptly make
89 payment to the contractor, unless the local governmental entity
90 has grounds, pursuant to paragraph (f), for withholding the
91 payment of retainage. If the local governmental entity makes
92 payment of retainage to the contractor under this paragraph
93 which is attributable to the labor, services, or materials
94 supplied by one or more subcontractors or suppliers, the
95 contractor shall timely remit payment of such retainage to those
96 subcontractors and suppliers.
97 (b)(e) This section does not prohibit a local governmental
98 entity from withholding retainage at a rate less than 5 10
99 percent of each progress payment, from incrementally reducing
100 the rate of retainage pursuant to a schedule provided for in the
101 contract, or from releasing at any point all or a portion of any
102 retainage withheld by the local governmental entity which is
103 attributable to the labor, services, or materials supplied by
104 the contractor or by one or more subcontractors or suppliers. If
105 a local governmental entity makes any payment of retainage to
106 the contractor which is attributable to the labor, services, or
107 materials supplied by one or more subcontractors or suppliers,
108 the contractor must shall timely remit payment of such retainage
109 to those subcontractors and suppliers.
110 (c)(f) This section does not require the local governmental
111 entity to pay or release any amounts that are the subject of a
112 good faith dispute, the subject of a claim brought pursuant to
113 s. 255.05, or otherwise the subject of a claim or demand by the
114 local governmental entity or contractor.
115 (d)(g) The time limitations set forth in this section for
116 payment of payment requests apply to any payment request for
117 retainage made pursuant to this section.
118 (e)(h) Paragraph (a) does Paragraphs (a)-(d) do not apply
119 to construction services purchased by a local governmental
120 entity which are paid for, in whole or in part, with federal
121 funds and are subject to federal grantor laws and regulations or
122 requirements that are contrary to any provision of the Local
123 Government Prompt Payment Act.
124 (f)(i) This subsection does not apply to any construction
125 services purchased by a local governmental entity if the total
126 cost of the construction services purchased as identified in the
127 contract is $200,000 or less.
128 Section 2. Paragraph (f) of subsection (1) of section
129 255.05, Florida Statutes, is amended to read:
130 255.05 Bond of contractor constructing public buildings;
131 form; action by claimants.—
132 (1) A person entering into a formal contract with the state
133 or any county, city, or political subdivision thereof, or other
134 public authority or private entity, for the construction of a
135 public building, for the prosecution and completion of a public
136 work, or for repairs upon a public building or public work shall
137 be required, before commencing the work or before recommencing
138 the work after a default or abandonment, to execute and record
139 in the public records of the county where the improvement is
140 located, a payment and performance bond with a surety insurer
141 authorized to do business in this state as surety. A public
142 entity may not require a contractor to secure a surety bond
143 under this section from a specific agent or bonding company.
144 (f) The Department of Management Services shall adopt rules
145 with respect to all contracts for $200,000 or less, to provide:
146 1. Procedures for retaining up to 5 10 percent of each
147 request for payment submitted by a contractor and procedures for
148 determining disbursements from the amount retained on a pro rata
149 basis to laborers, materialmen, and subcontractors, as defined
150 in s. 713.01.
151 2. Procedures for requiring certification from laborers,
152 materialmen, and subcontractors, as defined in s. 713.01, before
153 final payment to the contractor that such laborers, materialmen,
154 and subcontractors have no claims against the contractor
155 resulting from the completion of the work provided for in the
156 contract.
157
158 The state is not liable to any laborer, materialman, or
159 subcontractor for any amounts greater than the pro rata share as
160 determined under this section.
161 Section 3. Subsection (8) of section 255.077, Florida
162 Statutes, is amended to read:
163 255.077 Project closeout and payment of retainage.—
164 (8) If a public entity fails to comply with its
165 responsibilities to develop the list required under subsection
166 (1) or subsection (2), as defined in the contract, within the
167 time limitations provided in subsection (1), the contractor may
168 submit a payment request for all remaining retainage withheld by
169 the public entity pursuant to s. 255.078. The public entity need
170 not pay or process any payment request for retainage if the
171 contractor has, in whole or in part, failed to cooperate with
172 the public entity in the development of the list or failed to
173 perform its contractual responsibilities, if any, with regard to
174 the development of the list or if s. 255.078(3) s. 255.078(6)
175 applies.
176 Section 4. Section 255.078, Florida Statutes, is amended to
177 read:
178 255.078 Public construction retainage.—
179 (1) With regard to any contract for construction services,
180 a public entity may withhold from each progress payment made to
181 the contractor an amount not exceeding 5 10 percent of the
182 payment as retainage until 50-percent completion of such
183 services.
184 (2) After 50-percent completion of the construction
185 services purchased pursuant to the contract, the public entity
186 must reduce to 5 percent the amount of retainage withheld from
187 each subsequent progress payment made to the contractor. For
188 purposes of this section, the term “50-percent completion” has
189 the meaning set forth in the contract between the public entity
190 and the contractor or, if not defined in the contract, the point
191 at which the public entity has expended 50 percent of the total
192 cost of the construction services purchased as identified in the
193 contract together with all costs associated with existing change
194 orders and other additions or modifications to the construction
195 services provided for in the contract.
196 (3) After 50-percent completion of the construction
197 services purchased pursuant to the contract, the contractor may
198 elect to withhold retainage from payments to its subcontractors
199 at a rate higher than 5 percent. The specific amount to be
200 withheld must be determined on a case-by-case basis and must be
201 based on the contractor’s assessment of the subcontractor’s past
202 performance, the likelihood that such performance will continue,
203 and the contractor’s ability to rely on other safeguards. The
204 contractor shall notify the subcontractor, in writing, of its
205 determination to withhold more than 5 percent of the progress
206 payment and the reasons for making that determination, and the
207 contractor may not request the release of such retained funds
208 from the public entity.
209 (4) After 50-percent completion of the construction
210 services purchased pursuant to the contract, the contractor may
211 present to the public entity a payment request for up to one
212 half of the retainage held by the public entity. The public
213 entity shall promptly make payment to the contractor, unless the
214 public entity has grounds, pursuant to subsection (6), for
215 withholding the payment of retainage. If the public entity makes
216 payment of retainage to the contractor under this subsection
217 which is attributable to the labor, services, or materials
218 supplied by one or more subcontractors or suppliers, the
219 contractor shall timely remit payment of such retainage to those
220 subcontractors and suppliers.
221 (2)(5) Neither This section and nor s. 255.077 do not
222 prohibit prohibits a public entity from withholding retainage at
223 a rate less than 5 10 percent of each progress payment, from
224 incrementally reducing the rate of retainage pursuant to a
225 schedule provided for in the contract, or from releasing at any
226 point all or a portion of any retainage withheld by the public
227 entity which is attributable to the labor, services, or
228 materials supplied by the contractor or by one or more
229 subcontractors or suppliers. If a public entity makes any
230 payment of retainage to the contractor which is attributable to
231 the labor, services, or materials supplied by one or more
232 subcontractors or suppliers, the contractor must shall timely
233 remit payment of such retainage to those subcontractors and
234 suppliers.
235 (3)(6) Neither This section and nor s. 255.077 do not
236 require requires the public entity to pay or release any amounts
237 that are the subject of a good faith dispute, the subject of a
238 claim brought pursuant to s. 255.05, or otherwise the subject of
239 a claim or demand by the public entity or contractor.
240 (4)(7) The same time limits for payment of a payment
241 request apply regardless of whether the payment request is for,
242 or includes, retainage.
243 (5)(8) Subsection (1) does Subsections (1)-(4) do not apply
244 to construction services purchased by a public entity which are
245 paid for, in whole or in part, with federal funds and are
246 subject to federal grantor laws and regulations or requirements
247 that are contrary to any provision of the Florida Prompt Payment
248 Act.
249 (6)(9) This section does not apply to any construction
250 services purchased by a public entity if the total cost of the
251 construction services purchased as identified in the contract is
252 $200,000 or less.
253 Section 5. (1) This act does not apply to any contract for
254 construction services which is entered into or is pending
255 approval by a public entity, as defined in s. 255.072, Florida
256 Statutes, or by a local governmental entity, as defined in s.
257 218.72, Florida Statutes, or to any construction services
258 project advertised for bid by the public entity or local
259 governmental entity, on or before October 1, 2020.
260 (2) The amendments made to ss. 255.05 and 255.078, Florida
261 Statutes, by this act do not apply to contracts executed under
262 chapter 337, Florida Statutes.
263 Section 6. This act shall take effect October 1, 2020.
