Item C15BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: April 16, 2008 Division: En ig, n�ring
Bulk Item: Yes X No _ Department: Facilities Development
Staff Contact Person/Phone #: Jem Barnett x4416
AGENDA ITEM WORDING: Approval to reduce retainage from 10% to 5% for Fonticiella
Construction Corp. for the construction of the Medical Examiner's Facility.
ITEM BACKGROUND: In accordance to State Statute 218.735 (8)(b) a county having a population
of 100,001 or more, must reduce to 5% the amount of retainage withheld from each subsequent
progress payment after 50% completion of construction. Although Monroe County has a population of
less than 100,00, construction is over 80% complete and the contractor is requesting a 5% reduction.
Substantial Completion is scheduled for April 21, 2008. See attached.
PREVIOUS RELEVANT BOCC ACTION: N/A
CONTRACTIAGREEMENT CHANGES: To reduce retainage from 10% to 5%. As of February
29, 2008, the amount of retained funds would be reduced from $318,440.17 to $159,220.09.
STAFF RECOMMENDATIONS: Approval as stated above.
TOTAL COST: NIA BUDGETED: Yes X No _
COST TO COUNTY:N/A Funds already earned SOURCE OF FUNDS: Retainage Payable
REVENUE PRODUCING: Yes No X AMOUNT PER MONTH Year
APPROVED BY: County Atty OMB/Purchasmg Risk Management
DOCUMENTATION: Included X Not Required
DISPOSITION: AGENDA ITEM #.
Revised 11/06
MONROE COUNTY
FACILITIES DEVELOPMENT
M E M O R A N D U M
TO: David Koppel
County Engineer
FROM: Ann Riger, Contracts Administrator
Facilities Development
DATE: April 1, 2008
RE: Agenda Item — Medical Examiner Facility
AGENDA ITEM WORDING: Approval to reduce retainage from 10% to 5% for Fonticiella
Construction Corp. for the construction ofthe Medical Examiner's Facility.
ITEM BACKGROUND: The contractor, Fonticiella Construction Corp. is requesting a
retainage reduction from 10% to 5% from their payment applications. State Statue 218.735
(8)(b) states that a county having a population of 100,001 or more, must reduce the retainage
withheld to 5% after 50% of construction is completed. The Medical Examiner's Facility is over
80% complete.
PREVIOUS RELEVANT BOCC ACTION: N/A
CONTRACT/AGREEMENT CHANGES: Reduce retainage from 10% to 5%
STAFF RECOMMENDATIONS: Approval as stated above.
Thank you. If you have any questions please call me at ext. 4439.
AR
MONROE COUNTY FACILITIES DEVELOPMENT
DEPARTMENT
M E M O R A N D U M
DATE: 18 March 2008
TO: Jerry Barnett
FROM: Kevin Wilson
SUBJECT: Reduction of Retainage for Medical Examiner's Building Project
Recommendation: Approve a reduction of retainage to 5% and seek a Board of County
Commissioners (BOCC) resolution to pay the released retainage amount to the contractor upon
receipt of a properly documented application for such payment.
Basis for Recommendation:
1.The project was approximately 80% complete at the end of February 2008.
2.Retention of five (5) percent is adequate to ensure project completion.
2.Florida Statutes § 218.735 (8)(b) requires reduction in retainage to five (5) percent for most
Florida counties when a project reaches the 50 percent completion pant.
3.The contractor has requested a reduction of his retainage to five(5) percent.
Background:
Florida Statutes §218.735 (8)(b) require that counties with a population of 100,000 or greater
reduce the retained funds in construction contracts to five (5) percent upon reaching 50 percent
completion. The 50 percent completion point is defined either by the contract or by the current
percent billed. Smaller counties (including Monroe) are not obligated to reduce the retention.
The Clerk has, in the past, required a BOCC resolution to reduce retained funds after the 50
percent completion pant. Our department has, on previous occasions, requested such a
resolution when confident that the remaining retained funds are adequate to ensure completion
of the contracted work.
The contractor has billed (as of 29 February 2008) for approximately 80 percent of the total cost
of the contract. The contractor's quality of work is excellent and he continues to work toward an
early April substantial completion date for the balding. Reduction of retainage to 5 percent will
result in retained funds slightly in excess of $157,000 plus an unclaimedlunpaid balance of just
over $900,000. Upon substantial completion 5 percent retainage will amount to approximately
$200,000. These are adequate protection to ensure completion.
The 2007 Florida Statutes
Title XIV Chapter 218 View Entire
TAXATION AND FINANCIAL MATTERS PERTAINING TO Chapter
FINANCE POLITICAL SUBDIVISIONS
218.735 Timely payment for purchases of construction services.--
(1) The due date for payment for the purchase of construction services by a local governmental
entity is determined as follows:
(a) If an agent must approve the payment request or invoice prior to the payment request or
invoice being submitted to the local governmental entity, payment is due 25 business days after
the date on which the payment request or invoice is stamped as received as provided in s.
218.74(1).
(b) If an agent need not approve the payment request or invoice which is submitted by the
contractor, payment is due 20 business days after the date on which the payment request or
invoice is stamped as received as provided in s. 218.74(1).
(2) The local governmental entity may reject the payment request or invoice within 20 business
days after the date on which the payment request or invoice is stamped as received as provided in
s. 218.74(1). The rejection must be written and must specify the deficiency in the payment request
or invoice and the action necessary to make the payment request or invoice proper.
(3) If a payment request or an invoice is rejected under subsection (2) and the contractor submits
a corrected payment request or invoice which corrects the deficiency specified in writing by the
local governmental entity, the corrected payment request or invoice must be paid or rejected on
the later of:
(a) Ten business days after the date the corrected payment request or invoice is stamped as
received as provided in s. 218.74(1); or
(b) If the governing body is required by ordinance, charter, or other law to approve or reject the
corrected payment request or invoice, the first business day after the next regularly scheduled
meeting of the governing body held after the corrected payment request or invoice is stamped as
received as provided in s. 218.74(1).
(4) If a dispute between the local governmental entity and the contractor cannot be resolved by
the procedure in subsection (3), the dispute must be resolved in accordance with the dispute
resolution procedure prescribed in the construction contract or in any applicable ordinance. In the
absence of a prescribed procedure, the dispute must be resolved by the procedure specified in s.
218.76(2).
(5) If a local governmental entity disputes a portion of a payment request or an invoice, the
undisputed portion shall be paid timely, in accordance with subsection (1).
(6) When a contractor receives payment from a local governmental entity for labor, services, or
materials furnished by subcontractors and suppliers hired by the contractor, the contractor shall
remit payment due to those subcontractors and suppliers within 10 days after the contractor's
receipt of payment. When a subcontractor receives payment from a contractor for labor, services,
or materials furnished by subcontractors and suppliers hired by the subcontractor, the
subcontractor shall remit payment due to those subcontractors and suppliers within 7 days after
the subcontractors receipt of payment. Nothing herein shall prohibit a contractor or subcontractor
from disputing, pursuant to the terms of the relevant contract, all or any portion of a payment
alleged to be due to another party if the contractor or subcontractor notifies the party whose
payment is disputed, in writing, of the amount in dispute and the actions required to cure the
dispute. The contractor or subcontractor must pay all undisputed amounts due within the time
limits imposed by this section.
(7)(a) Each contract for construction services between a local governmental 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 local governmental entity.
The contract must specify the process for the development of the list, including responsibilities of
the local governmental entity and the contractor in developing and reviewing the list and a
reasonable time for developing the list, as follows:
1. For construction projects having an estimated cost of less than $10 million, within 30 calendar
days after reaching substantial completion of the construction services purchased as defined in the
contract, or, if not defined in the contract, upon reaching beneficial occupancy or use; or
2. For construction projects having an estimated cost of $10 million or more, within 30 calendar
days, unless otherwise extended by contract not to exceed 60 calendar days, after reaching
substantial completion of the construction services purchased as defined in the contract, or, if not
defined in the contract, upon reaching beneficial occupancy or use.
(b) If the contract between the local governmental entity and the contractor relates to the
purchase of construction services on more than one building or structure, or involves a multiphased
project, the contract must provide for the development of a list of items required to render
complete, satisfactory, and acceptable all the construction services purchased pursuant to the
contract for each building, structure, or phase of the project within the time limitations provided
in paragraph (a).
(c) The failure to include any corrective work or pending items not yet completed on the list
developed pursuant to this subsection does not alter the responsibility of the contractor to
complete all the construction services purchased pursuant to the contract.
(d) Upon completion of all items on the list, the contractor may submit a payment request for all
remaining retainage withheld by the local governmental entity pursuant to 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 an amount not to
exceed 150 percent of the total costs to complete such items.
(e) All items that require correction under the contract and that are identified after the
preparation and delivery of the list remain the obligation of the contractor as defined by the
contract.
(f) Warranty items may not affect the final payment of retainage as provided in this section or as
provided in the contract between the contractor and its subcontractors and suppliers.
(g) Retainage may not be held by a local governmental entity or a contractor to secure payment of
insurance premiums under a consolidated insurance program or series of insurance policies issued
to a local governmental entity or a contractor for a project or group of projects, and the final
payment of retainage as provided in this section may not be delayed pending a final audit by the
local governmental entitys or contractor's insurance provider.
(h) if a local governmental entity faits to comply with its responsibilities to develop the list
required under paragraph (a) or paragraph (b), as defined in the contract, within the time
limitations provided in paragraph (a), the contractor may submit a payment request for all
remaining retainage withheld by the local governmental entity pursuant to this section. The local
governmental 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 local governmental 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 paragraph (8)(f) applies.
(8)(a) With regard to any contract for construction services, a local governmental entity may
withhold from each progress payment made to the contractor an amount not exceeding 10 percent
of the payment as retainage until 50-percent completion of such services.
(b) After 50-percent completion of the construction services purchased pursuant to the contract,
the local governmental entity must reduce to 5 percent the amount of retainage withheld from
each subsequent progress payment made to the contractor. For purposes of this subsection, the
term "50-percent completion" has the meaning set forth in the contract between the local
governmental entity and the contractor or, if not defined in the contract, the point at which the
local governmental entity has expended 50 percent of the total cost of the construction services
purchased as identified in the contract together with all costs associated with existing change
orders and other additions or modifications to the construction services provided for in the
contract. However, notwithstanding this subsection, a municipality having a population of 25,000
or fewer, or a county having a population of 100,000 or fewer, may withhold retainage in an
amount not exceeding 10 percent of each progress payment made to the contractor until final
completion and acceptance of the project by the local governmental entity.
(c) After 50-percent completion of the construction services purchased pursuant to the contract,
the contractor may elect to withhold retainage from payments to its subcontractors at a rate
higher than 5 percent. The specific amount to be withheld must be determined on a case -by -case
basis and must be based on the contractors assessment of the subcontractors past performance,
the likelihood that such performance will continue, and the contractor's ability to rely on other
safeguards. The contractor shalt notify the subcontractor, in writing, of its determination to
withhold more than 5 percent of the progress payment and the reasons for making that
determination, and the contractor may not request the release of such retained funds from the
local governmental entity.
(d) After 50-percent completion of the construction services purchased pursuant to the contract,
the contractor may present to the local governmental entity a payment request for up to one-half
of the retainage held by the local governmental entity. The local governmental entity shall
promptly make payment to the contractor, unless the local governmental entity has grounds,
pursuant to paragraph (f), for withholding the payment of retainage. if the local governmental
entity makes payment of retainage to the contractor under this paragraph which is attributable to
the tabor, services, or materials supplied by one or more subcontractors or suppliers, the
contractor shalt timely remit payment of such retainage to those subcontractors and suppliers.
(e) This section does not prohibit a local governmental entity from withholding retainage at a rate
less than 10 percent of each progress payment, from incrementally reducing the rate of retainage
pursuant to a schedule provided for in the contract, or from releasing at any point all or a portion
of any retainage withheld by the local governmental entity which is attributable to the tabor,
services, or materials supplied by the contractor or by one or more subcontractors or suppliers. If a
local governmental entity makes any payment of retainage to the contractor which is attributable
to the tabor, services, or materials supplied by one or more subcontractors or suppliers, the
contractor shall timely remit payment of such retainage to those subcontractors and suppliers.
(f) This section does not require the local governmental entity to pay or release any amounts that
are the subject of a good faith dispute, 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.
(g) The time limitations set forth in this section for payment of payment requests apply to any
payment request for retainage made pursuant to this section.
(h) Paragraphs (a)-(d) do not apply to construction services purchased by a local governmental
entity which are paid for, in whole or in part, with federal funds and are subject to federal grantor
laws and regulations or requirements that are contrary to any provision of the Local Government
Prompt Payment Act.
(i) This subsection does not apply to any construction services purchased by a local governmental
entity if the total cost of the construction services purchased as identified in the contract is
$200,000 or less.
(9) All payments due under this section and not made within the time periods specified by this
section shall bear interest at the rate of 1 percent per month, or the rate specified by contract,
whichever is greater.
History.--s. 3, ch. 95-331; s. 3, ch. 2001-169; s. 3, ch. 2005-230.
Irom: Armando J. Fonticiella [ajfont@fonticiella.comj
ent: Tuesday, March 11, 2008 5:32 PM
'o: Wilson -Kevin
x: Herminia M. Fonticiella; Leonardo J. Fonticiella
ubject: Reduction of retainage to 5%.
lello Kevin,
=lorida Statutes allows the reduction of retainage to 5-percent when the construction has reached 50-
ercent completion. At this time we are approximately 80-percent complete, as reflected in the Feb. pay
:quest, and anticipate 100-percent completion in the month of April. We respectfully request that you
btain approval, as required, for us to request these funds as soon as possible. Thank you in advance.
:egards,
onticiella Construction Corp.
.rmando J. Fonticiella
ifont fonticiella.com
el: (305)207-9605
ax: (305)226-4165