Bonding Waiver Provisions Eliminated in Florida Law
Thursday, June 26, 2014
The Governor of Florida has signed SB 230, which eliminates provisions that allowed the Orlando-Orange County Expressway Authority (Authority) to waive bonding requirements for projects that are under $500,000 and when the project is awarded as a set-aside contract under an economic development program for local small businesses.
SFAA was heavily involved in the negotiations in 2007 when this provision was under consideration in the Florida legislature. While we could not defeat the bond waiver, we were successful in including several SFAA-drafted provisions in the law. The Authority’s decision to waive bonds had to be based on an investigation and conclusion that sufficient competition exists so that the Authority receives a fair price and does not undertake any unusual risk with respect to such a project. The law also required the Authority to make payment claims as though a payment bond were in place if the general contractor does not or could not pay subcontractors, suppliers and workers on the job when the Authority waives bonds. The Authority was required to prepare a biennial report on the activities undertaken pursuant to the waiver provision.
To the best of our knowledge, bonds were never waived. Instead, the new law provides that the Authority shall encourage the inclusion of local-, small-, minority-, and women-owned businesses in its procurement and contracting opportunities. The Authority also has been renamed as the Central Florida Expressway Authority under the new law.
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