Florida Governor Vetoes Contracting Bill

Before a public agency enters into any contract, there must be sufficient funding to pay for the obligations under that contract. This appears to be the foundation of controversy in the State of Florida, leading the Legislature to pass a bill, vetoed by the Governor, that would tighten controls in this area.

Florida Governor Charlie Christ vetoed a bill on May 27, 2009 that would have increased the control of the Governor and Legislature over the contracting actions of state agencies. Christ claimed that the bill would impose "additional contracting requirements on state agencies and those who do business with the state at a time when we should be doing everything we can to streamline bureaucracy and stimulate economic growth."

Among other things, SB 2994 would have done the following:

• Prohibit agencies from agreeing in a contract to "pay liquidated damages or early termination fees for a breach or early termination of a contract" due to the Legislature not providing full funding.
• Prohibit agencies from contracting to pay interest if the agency had insufficient budget authority to pay for the obligations of a contract.
• Prior to execution of a contract in excess of $10 million, the authorized public official would need to notify the governor, president of the Senate, and speaker of the House.
  
• Require specific language in every contract to the effect that the "contract may be terminated by the state upon 30 days' written notice if funding for this contract is specifically eliminated" in accordance with specific conditions.
  

Click on the Orlando Sentinel to read a story on this issue. To see the complete text of the bill, click here.