Proposed Statute Would Streamline Process for Creating Punch Lists and Require Faster Payment of Undisputed Amounts on Public Projects

The statute makes modifications to several prompt payment statutes relating to public projects and requires the parties to develop detailed punch lists, and then promptly pay for any amounts due under the contract that are not the subject of the punch lists.

While HB 383 contains modifications to multiple statutes, the significant revisions are to a portion of Chapter 218, Florida Statutes, and Chapter 255, Florida Statutes. The revisions are detailed below, and should make it easier for contractors on public projects to received payments for amounts that are undisputedly due to them, notwithstanding the existence of a punch list.

HB 383 makes the following revisions to 218.735, Florida Statutes:

(7) Each contract for construction services between a local governmental entity and a contractor must provide for the development of a single list of items required to render complete, satisfactory, and acceptable the construction services purchased by the local governmental entity, which must include a dollar valuation, determined using reasonable market rates, of the estimated cost to complete each item.

. . .

(e) Within 20 days after developing the list, the local governmental entity shall pay the contractor the remaining balance of the contract, including any remaining retainage withheld by the local governmental entity, less an amount that equals the estimated cost to complete the items on the list.

(f) Upon completion of all items on the list, the contractor may submit a payment request for the amount all remaining retainage withheld by the local governmental entity pursuant to paragraph (e) this section. If a good faith dispute exists as to whether one or more items identified on the list have been completed pursuant to the contract, the local governmental entity may continue to withhold up to 150 percent of the total costs to complete such items.

. . .

(j) If a local governmental entity fails to comply with its responsibilities to develop the list required under paragraph (a) or paragraph (b) within the time limitations provided in paragraph (a), the contractor may submit a payment request to the local governmental entity for the remaining balance of the contract, including all remaining retainage withheld by the local governmental entity. The local governmental entity must pay the contractor pursuant to this section; and payment of any remaining undisputed contract amount, less any amount withheld pursuant to the contract for incomplete or uncorrected work, must be paid within 20 business days after receipt of a proper invoice or payment request. If the local governmental entity has provided written notice to the contractor specifying the failure of the contractor to meet contract requirements in the development of the list of items to be completed, the local governmental entity shall pay the contractor the remaining balance of the contract, less an amount equal to 150 percent of the estimated cost to complete the items that the local governmental entity intended to include on the list need not pay or process any payment request for retainage if the contractor has, in whole or in part, failed to cooperate with the local governmental entity in the development of the list or to perform its contractual responsibilities, if any, with regard to the development of the list or if paragraph (8)(c) applies.

. . .

(8) (c) This section does not require the local governmental entity to pay or release any amounts that are the subject of a good faith dispute or, the subject of a claim brought pursuant to s. 255.05, or otherwise the subject of a claim or demand by the local governmental entity or contractor.

255.073, Florida Statutes, is modified as follows:

(2) If a public entity disputes a portion of a payment request, the undisputed portion must be timely paid by the date required under the contract or by 20 days after receipt of the request, whichever is earlier

255.07, Florida Statutes, is modified as follows:

(1) Each contract for construction services between a public entity and a contractor must provide for the development of a list of items required to render complete, satisfactory, and acceptable the construction services purchased by the public entity, which must include a dollar valuation, determined using reasonable market rates, of the estimated cost to complete each item. The contract must specify the process for the development of the list, including responsibilities of the public entity and the contractor in developing and reviewing the list and a reasonable time for developing the list, as follows:

. . .

(4) Within 20 days after developing the list, the public entity shall pay the contractor the remaining balance of the contract, including any remaining retainage withheld by the public entity pursuant to s. 255.078, less an amount that equals the estimated costs to complete the items on the list.

. . .

(5)(4) Upon completion of all items on the list, the contractor may submit a payment request for the amount all remaining retainage withheld by the public entity pursuant to subsection (4) s. 255.078. If a good faith dispute exists as to whether one or more items identified on the list have been completed pursuant to the contract, the public entity may continue to withhold an amount not to exceed 100 150 percent of the total costs to complete such items.

. . .

(9)(8) If a public entity fails to comply with its 20 responsibilities to develop the list required under subsection (1) or subsection (2), as defined in the contract, within the time limitations provided in subsection (1), the contractor may submit to the public entity a payment request for all remaining retainage withheld by the public entity pursuant to s. 255.078. The public entity shall pay the contractor within 20 days after receiving the payment request. However, the public entity need not pay or process any payment request for retainage if the contractor has, in whole or in part, failed to cooperate with the public entity in the development of the list or failed to perform its contractual responsibilities, if any, with regard to the development of the list or if s. 255.078(3) applies.

You can click here to view the full proposed statute.