One of ABC's top legislative priorities passed the Senate with unanimous support. Having previously passed the full House earlier this session, HB 101 is headed to the Governor for final consideration and passage into law.
Officially termed Public Construction, HB 101 would reduce Florida's retainage rate on public construction to a flat 5% for the duration of the project. Current statute dictates that retainage on public construction is 10% of every progress payment until the project is 50% complete (as dictated by the contract), at which point it reduces 5% of every payment.
Public construction can produce delayed pay timelines that, when combined with the withholding of retainage, can lead to real cashflow issues for companies. When you factor in that, after conducting national research, we realized that 31 other states have retainage rates lower than Florida, you also have an issue that can impact the competitiveness of Florida's marketplace.
We want to thank our bill sponsors, Representative Alex Andrade and Senator Ed Hooper for their efforts on this important legislative effort. Their work on this bill has been tremendous.
On Wednesday, March 11, 2020, ABC of Florida's second legislative priority passed out of the Senate with unanimous support. HB 441 - Public Procurement of Services (Rep. DiCeglie and Senator Perry) will increase the cap on continuing contracts from the current statutory ceiling of $2 million to $4 million dollars. This bill, having previously passed the House on February 13th with unanimous support, will now make its way to the Governor for final consideration and approval.
Continuing contracts allow for public entities to group smaller, but substantially similar public procurement projects into one competitive solicitation as opposed to multiple smaller ones. So long as the total value of the projects, when combined, does not exceed the cap, this consolidation can take place. This ability to bid multiple but smaller projects into one competitive solicitation is a time and cost savings for the public entities. Continuing contracts also allow for smaller companies to gain experience on multiple and smaller projects via one project award.
Florida's current cap of $2 million has been in place since 2009. Over the last decade, industry costs, inflation and market conditions have led to a situation where $2 million worth of work in 2020 is not what it might have been in 2009.
We appreciate the support of industry partners like the Architects, Engineers, Association of Counties and League of Cities as this legislation is something that uniformly and positively impacts us all.
We also want to thank two exceptional sponsors on this bill: Representative Nick DiCeglie and Senator Keith Perry. Their tremendous work on behalf of the industry and the issue is much appreciated.
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