Nathan Hale | Law360 | June 15, 2017
Construction companies applauded Florida Gov. Rick Scott’s signing Thursday of two bills that they say will open competition for state-funded projects and give builders more say and certainty on when a statutory window of liability for completed projects begins to run.
H.B. 599 preempts local laws and mandates on projects in which more than half of the funding comes from state appropriations, while H.B. 377 creates a definition of “completion of the contract,” which gives builders some say along with project owners on when the statute of repose is triggered.
The Associated Builders and Contractors, which describes itself as the largest commercial construction association in Florida, said in a statement Thursday that it been pushing for five years for the steps taken in H.B. 599, which was sponsored by Rep. Jayer Williamson, R-Pace, and in the Senate by Sen. Keith Perry, R-Gainesville.
State law requires state contracts for construction services projected to exceed $200,000 to be awarded competitively, with a threshold of $300,000 for counties, municipalities, special districts and other political subdivisions, according to legislative documents.
Local laws such as the city of Miami’s Responsible Bidder and Wage Rate ordinances have allowed municipal governments to put pre-bid mandates on contractors regarding whom they must hire, where they must train, what job fairs they have to hold and what benefits they have to offer to bid on projects, according to the ABC, which said these myriad requirements would push projects out of reach for small businesses by driving up costs.
“If taxpayers are paying for a project, the government certainly has a role to play in the bidding and selection process,” Peter Dyga, president and CEO of ABC’s East Coast Chapter, said in a statement. “But it shouldn’t limit competition or shut out qualified, licensed contractors, subs or tradesmen.”
Rep. Williamson suggested the local laws had motives beyond ensuring minimum wages and benefits for workers.
“Weeding through bidders before they even get a chance to bid so that you can award the project to groups you want is nothing other than Good Old Boy Politics,” he said in a statement distributed by the ABC. “I didn’t vote for them as a county commissioner, and I won’t as a member of the Florida House.”
The new law, which passed 77-40 in the House and 20-17 in the Senate, does not cover projects that include federal funding, among some other exceptions, according to the ABC.
H.B. 377, which was sponsored in the House by Rep. Thomas J. Leek, R-Daytona Beach, with a corresponding bill presented by Sen. Kathleen Passidomo, R-Naples, clarifies when the four-year and 10-year statutes of repose begin for bringing claims of a construction defect or latent construction defect.
The law specifies that the date of completion of a contract — one of four triggers of the statute of repose — is the later of the date of final performance of all contracted services or the date that the final payment for those services becomes due — without regard to the date that final payment is made, according to legislative records.
The Fifth District Court of Appeal had ruled in 2013 that a contract was complete under the relevant state law on the date final payment is made, according to a legislative staff report.
Project owners had exploited this ruling, by delaying making the final payment to contractors — even by a penny — to keep the clock from starting on the statute of repose.
“In many instances, this created open-ended liability for builders, increasing lawsuits and the cost of doing business,” the ABC said.
The ABC noted that the bill sailed through both chambers on its way to passing 37-0 in the Senate and 114-0 in the House.
Both laws take effect July 1.