The purpose of this rulemaking is to adopt new Chapter 40D-7, Florida Administrative Code, to establish the policy and procedure for suspending a contractor from working with the District when the contractor has materially breached its contract with ...

 

WATER MANAGEMENT DISTRICTS

Southwest Florida Water Management District

RULE NOS.:RULE TITLES:

40D-7.001Policy

40D-7.002Definitions

40D-7.003Notice to Defaulting Contractor

40D-7.004Factors to Determine Whether a Contractor Should be Placed on the Temporary or Permanent Suspension List

40D-7.005Administrative Hearings

PURPOSE AND EFFECT: The purpose of this rulemaking is to adopt new Chapter 40D-7, Florida Administrative Code, to establish the policy and procedure for suspending a contractor from working with the District when the contractor has materially breached its contract with the District. The effect of this rulemaking will be to encourage business practices that require contractors to materially perform in accordance with the terms and conditions of a District contract and provide the District with a means of serving as good stewards of taxpayer funds by suspending a contractor who has materially breached its District contract.

SUMMARY: Contractor Suspension.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION: The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: There are no costs to the regulated public as a result of the proposed amendments. Therefore, this rulemaking will not result in any adverse economic impacts or regulatory cost increases that require legislative ratification.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 373.610 FS.

LAW IMPLEMENTED: 373.610 FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 5 days before the workshop/meeting by contacting: SWFWMD Human Resources Director, [phone], ext. 4702, 1(800)423-1476 (FL only), ext. 4702, or to [e-mail]. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Sonya White, SWFWMD, 7601 Highway 301 North, Tampa, FL 33637-6759, [phone] (4660) (OGC #2013054)

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

CHAPTER 40D-7

CONTRACTOR SUSPENSION

 

40D-7.001 Policy.

(1) This chapter establishes the policy and procedure for suspending a contractor from working with the District, either temporarily or permanently, when a contractor materially breaches a contract with the District.

(2) The District's objective in enacting this chapter is to serve as good stewards of taxpayer funds and encourage business practices that require contractors to materially perform in accordance with the terms and conditions of the District contract.

(3) The District Governing Board shall be authorized to temporarily or permanently suspend a contractor from doing business with the District, based upon evidence that the contractor has materially breached its contract with the District and the factors provided in this chapter. The Governing Board may elect not to take action.

(4) By temporarily or permanently suspending a contractor from doing business with the District, the District does not waive any other legal or equitable remedies for breach of contract.

Rulemaking Authority 373.610 FS. Law Implemented 373.610 FS. History–New_________.

 

40D-7.002 Definitions.

When used in this chapter:

(1) “Contractor” means an individual, partnership, corporation, joint venture, professional association, an obligor to a third party beneficiary contract, or any other legal entity, including any associated principals, that has entered into a contract with the District for the performance of work. Contractor shall not include recipients of District grant funds.

(2) “District” means the Southwest Florida Water Management District.

(3) “Material breach” means any non-performance that is not legally excusable. The breach is either failing to perform an act that is an important part of the transaction or performing an act that is inconsistent with the terms and conditions of the contract.

(4) “Notice to Defaulting Contractor” means a written notification from the District to a contractor that materially breached a contract with the District stating that the contractor is being referred to the Governing Board for a determination as to whether the contractor should be placed on the District’s Temporary or Permanent Suspension List.

(5) “Obligor” means an entity that has promised or is otherwise legally obligated to perform an act or deed for the benefit of a third party beneficiary. Obligors to the District include but are not limited to insurance companies and surety companies.

(6) “Principal(s)” means a sole proprietor, partner, owner, officer, or director of the contractor that materially breached a District contract.

(7) “Re-procurement costs” means the total amount of additional expense, which may include administrative costs or attorney's fees, that the District has or will incur in order to obtain substitute goods or services from another contractor to complete the requirements that the contractor materially failed to perform in accordance with the District contract.

(8) “Suspension Notice” means a written notification from the District advising a contractor that it has been placed on the District’s Suspension List and is temporarily or permanently suspended from doing business with the District.

(9) “Suspension List” means a list of contractors maintained by the District that are temporarily or permanently suspended from doing business with the District.

(10) “Third-party beneficiary” means whenever the District is the intended beneficiary of a contract but is not a party to the contract.

Rulemaking Authority 373.610 FS. Law Implemented 373.610 FS. History–New_________.

 

40D-7.003 Notice to Defaulting Contractor.

(1) The Procurement Manager, or subsequently titled position, shall determine, in consultation with the District’s Executive Director and General Counsel, whether a contractor that materially breached a contract with the District will be referred to the Governing Board based on the factors listed in subsection 40D-7.004(2), F.A.C.

(2) If it is determined one of the factors listed in subsection 40D-7.004(2), F.A.C., is implicated, the District shall notify the contractor that the Governing Board will determine whether the contractor should be placed on the District’s Temporary or Permanent Suspension List by forwarding a Notice to Defaulting Contractor sent Certified U.S. Mail, return receipt requested. The Notice to Defaulting Contractor shall be provided to the contractor at least 7 days prior to the Governing Board meeting.

Rulemaking Authority 373.610 FS. Law Implemented 373.610 FS. History–New________.

 

40D-7.004 Factors to Determine Whether a Contractor Should be Placed on the Temporary or Permanent Suspension List.

(1) Once the District has sent a Notice to Defaulting Contractor to the contractor, the Governing Board shall determine whether the contractor should be suspended from doing business with the District, and if suspended, the duration of the suspension. The Governing Board shall base its decision on a consideration of the factors below.

(2) The factors to be considered when making a determination whether to refer a contractor to the Governing Board and whether a contractor should be suspended from doing business with the District in accordance with subsection (1) above are if:

(a) The material breach resulted in economic impact to the District;

(b) The contractor failed to pay re-procurement costs in a timely manner;

(c) The material breach resulted in, or will result in, a substantial delay in the completion of a District project;

(d) The material breach impacted, or will impact, the District in meeting a legislative deadline;

(e) The material breach impacted, or will impact, the District in meeting its contractual obligations with another entity;

(f) The contractor violated the Local Government Prompt Payment Act;

(g) The contractor failed to perform in accordance with professional licensing standards and regulations;

(h) The contractor failed to comply with Florida public records laws;

(i) The breach involved discrimination on the basis of race, color, creed, national origin, sex, age, or handicap;

(j) The contractor violated requirements of a District solicitation to ensure the fair award of District contracts, including price fixing between competitors, allocation of customers between competitors, and bid rigging;

(k) The material breach involved willful or gross misconduct;

(l) The District in the past five years has terminated a District contract with the contractor due to the contractor’s material breach;

(m) The material breach resulted in property damage, personal injury, or death;

(n) The material breach involved the commission of a criminal offense, including public entity crimes as defined in Subsection 287.133(1)(g), F.S.;

(o) The material breach involved the commission of any act indicating a lack of business integrity or honesty;

(p) The material breach involved knowingly doing business with a suspended contractor; and,

(q) The contractor was on another Federal or State suspension or debarment list at the time it breached its current contract with the District.

(3) The District shall issue a Suspension Notice by Certified U.S. Mail, return receipt requested, upon the Governing Board’s determination that the contractor has been temporarily or permanently suspended from doing business with the District. The Suspension Notice shall specify the factors provided in subsection 40D-7.004(2), F.A.C., upon which the determination by the Governing Board was based and the duration of any suspension. The notice shall inform the contractor that its principals shall not do business with the District under a different name or form a new legal entity in order to do business with the District while the contractor remains on the Suspension List.

(4) A contractor placed on the Temporary Suspension List shall reimburse the District all re-procurement costs prior to being removed from the Suspension List.

(5) Contractors that are placed on the Permanent Suspension List will be permanently suspended from doing business with the District.

Rulemaking Authority 373.610 FS. Law Implemented 373.610 FS. History–New_________.

 

40D-7.005 Administrative Hearings.

The Suspension Notice shall constitute agency action subject to the provisions of Chapter 120, F.S.

Rulemaking Authority 373.610 FS. Law Implemented 373.610 FS. History–New_________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Chris Tanner, Staff Attorney

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Southwest Florida Water Management District Governing Board

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: August 26, 2014

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: August 20, 2014