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Getting Started in Public Procurement

Contractors looking for work in these tough times should keep public projects in mind. If you are not familiar with the public procurement or "bidding" process, knowing the basics will help in getting started. Most public agencies have standard policies and procedures for advertising and awarding contracts. The first step is identifying the public agencies that need your services. From there, you will need to determine how the agency advertises its projects, and the terms and conditions for the particular project.

In Florida, there are layers of government, all of which advertise and award construction work. The tricky part is that these agencies all have their own requirements. For example, State agencies such as the Florida Department of Transportation, may be subject to the requirements of statutes and administrative regulations that may not be applicable to local government agencies. In other words, public procurement in the State of Florida is not a "one size fits all" process. For local governments, including counties and municipalities, there may be purchasing ordinances and policies that apply to the particular agency. Determining what the process is for the agency you are interested in doing work for is critical.

Free Construction Work, Come and Get It

If you want work done for free, hire an unlicensed contractor.  The 3rd District Court of Appeals rendered a not-final opinion October 27th articulating a very clear message: unlicensed contractors need not be paid.    In Master Tech Satellite, Inc., etc. v. Mastec North America, Inc., etc. (No. 3D08-2509 October 27, 2010), Master Tech was hired by Mastec North America to install residential digital satellite systems for Mastec's customers.  Mastec North America apparently did not pay for the work.  Master Tech then sued to recover on the contract in an amount in excess of $300,000.00.  During the course of discovery, it was brought to light that the work performed by Master Tech involved at least some electrical work and required a license.  It was also discovered that, in fact, Master Tech did not hold such a license.  The trial court granted summary judgment for defendant based on Sec.489.532, Florida...

Lender Liability to Contractors Extended by Court

A recent Florida appellate court decision extended a lender’s liability to contractors for failure to fully fund a construction loan on a project. §713.3471 of the Florida Statutes makes construction lenders liable to contractors and lienors who served a notice to owner if the lender ceases funding a construction loan without first notifying the contractor and lienors. In that situation, the lender could be liable for the actual construction costs incurred plus 15% for overhead and profit from the date on which the notice should have been provided until the date it actually is provided, if at all.

In an opinion not yet reported, Whitehead v. Tyndall Federal Credit Union, the court liberally interpreted this statute to make a lender liable to the original contractor when the lender failed to pay that contractor, but instead paid a replacement contractor. The lender denied liability, saying it fully funded the construction loan as required by the statute, even though the funding went to a subsequent contractor. The court held that, since the construction loan funds didn’t all go to the original contractor, the lender was required to provide statutory notice to the contractor that loan proceeds would no longer be funded to that contractor, even though they would later be paid to the subsequent contractor. The court reversed summary judgment in the lender’s favor, paving the way to the lender’s potential liability to the contractor for actual costs plus 15% overhead and profit.

Therefore, in this environment where non-payment of contractors has proliferated, consideration should be given to whether claims against the construction lender are available