Effective date: 7/17/2017

    (1) General. The requirements of subsections (2) through (6), below, shall be met for all projects. Qualifying projects, including eligible conservation projects, may only need a subset of these requirements depending on the scope of work.
    (a) Federal regulations incorporated by reference shall be read so that the terms “United States,” “federal,” “EPA,” and “officials of EPA” mean “the Department” unless the context clearly indicates otherwise.
    (b) Capitalization grant projects shall be subject to the requirements of specific federal cross-cutting authorities identified in the loan application.
    (2) Project Planning Documentation. The project sponsor shall submit the following planning documentation. Electronic submittals are encouraged.
    (a) Sufficient illustrative detail of the local area to identify where the project or activity would be located to include existing and proposed service areas. Landmarks and other readily identifiable features shall be noted.
    (b) A description of the existing and recommended facilities and system performance, projection of population and water demand, present and historic water usage and population, estimated capital costs, and estimated operation and maintenance costs, if applicable.
    (c) Identify and locate wellhead and source water protection areas that may be impacted and potential pollution sources that may affect drinking water sources within the project area as a result of the proposed project.
    (d) Summary of any technical services performed in project planning and design as described in paragraph 62-552.300(3)(h), F.A.C.
    (e) The need or justification for the project or activity and the environmental and economic impacts and benefits of the project.
    (f) A cost comparison of at least three alternatives, unless it can be demonstrated that fewer alternatives are available. The project sponsor shall demonstrate that all viable, cost effective alternatives were considered.
    (g) Resolution of comments received by the Florida State Clearinghouse during its intergovernmental review of the project.
    (h) The public participation process used to explain the project and the financial impacts to the public.
    (i) Financial feasibility information addressing the following:
    1. The sources and amounts of revenues to be dedicated to repaying the loan and the expenses, charges, and liens against or to be paid from such dedicated funds or revenues. The information shall demonstrate the ability to repay the loan with a margin of safety. Examples of a margin of safety are as follows:
    a. Pledged revenue coverage ratio of at least 1.15 for projects sponsored by a local governmental agency; and,
    b. A current term debt and capital lease coverage ratio of at least 1.15, as explained in subsection 62.552.300(7), F.A.C., for projects sponsored by other than a local governmental agency.
    2. Capital improvements that will be financed from the same funds or revenues dedicated to repaying the loan.
    3. The proposed system of charges, rates, fees, and other collections that will generate the revenues to be dedicated to loan repayment. The rate structure of the revenue generation system shall be approved at least six months before the first State Revolving Fund loan repayment is due or before the project closeout, whichever occurs first. The rate structure shall be implemented in a timely manner to ensure the generation of sufficient revenues dedicated to loan repayment and may be implemented in phases to the extent timely and sufficient revenue generation will be accomplished. The revenue generation system shall be revised, as necessary, to satisfy the pledged revenue requirements of the loan.
    (j) An updated Request for Inclusion to include the schedule, scope, and costs for implementing the recommended facilities or activities, if necessary.
    (k) An adopting resolution or other action establishing a commitment to implementing the planning recommendations.
    (3) Plans and Specifications. The project sponsor shall submit biddable plans and specifications conforming to the planning documentation described in subsection 62-552.700(2), F.A.C., for projects involving construction. For design/build projects, the sponsor shall submit a copy of the request for qualifications, or requests for proposals, and the preliminary design report shall be submitted for permitting. Final permitted plans and specifications shall be submitted for each component of the project. Electronic submittals are encouraged.
    (4) Site Certification. The project sponsor shall certify that all sites necessary for the construction, operation, and maintenance of the project or to otherwise carry out project activities over the useful life of the project are available.
    (5) Permitting. The project sponsor shall submit evidence that all required permits have been obtained, or written documentation from the applicable permitting authorities that the project will be permitted, or that a permit is not required.
    (6) Procurement. Procurement must be in conformance with 40 CFR 31.36, (July 1, 2011), hereby adopted and incorporated by reference. This document is available from the Department’s Drinking Water State Revolving Fund Program, 3900 Commonwealth Blvd., Tallahassee, Florida 32399-3000, or at http://www.flrules.org/Gateway/reference.asp?No=Ref-08367. When procuring property and services under a SRF loan, a project sponsor shall follow the policies and procedures it uses for procurements from its non-SRF funds provided that the procurement conforms to applicable federal, state and local laws and regulations, and the following requirements:
    (a) All procurement transactions shall be conducted in a manner providing full and open competition. The use of statutorily or administratively imposed in-state or local geographical preferences in the evaluation of bids or proposals is prohibited. For small purchases that cost $100,000 or less, a price or rate quotation shall be obtained from a minimum of two qualified sources.
    (b) Construction contractors shall be selected according to a recognized procurement method such as formal advertised competitive bidding, competitive best value or competitive qualifications based proposals, or noncompetitive proposals. Delivery methods shall be design/bid/build, design/build or construction manager at risk.
    (c) Requirements for the formal advertised competitive bidding method of procurement shall be as follows:
    1. All solicitations shall incorporate a clear and accurate description of the technical requirements for the materials, products, or services to be procured.
    a. Such description shall not contain features that unduly restrict competition.
    b. The description shall include a statement of the qualitative nature of the materials, products or services to be procured and; when necessary, shall set forth those minimum essential characteristics and standards to which they must conform to satisfy their intended use.
    c. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a “brand name or equal” description may be used as a means to define the performance or other salient requirements of a procurement. The specific features of the named brand which must be met by the bidders shall be clearly stated.
    d. All requirements that the bidders must fulfill and all other factors to be used in evaluating bids or proposals shall be identified.
    2. Project sponsors shall ensure that all prequalified lists of persons, firms, or products that are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition.
    3. The invitation for bids shall be publicly advertised and bids shall be solicited from an adequate number of known suppliers to ensure open competition, providing them sufficient time prior to the date set for opening the bids.
    4. The invitation for bids, which shall include any specifications and pertinent attachments, shall define the items or services in order for the bidder to properly respond.
    5. All bids shall be publicly opened at the time and place prescribed in the invitation for bids, and a firm-fixed-price contract (lump sum or unit price) awarded to the responsible bidder whose bid conforms to all the material terms and conditions of the invitation for bids.
    6. Any or all bids may be rejected if there is a sound, documented reason.
    7. Project changes after advertising for bids or other project proposals and before bid or proposal opening shall be made by addendum. Changes to executed contracts involving construction shall be made by change order. The project sponsor shall submit all addenda and change orders to the Department. The Department shall perform an eligibility determination for each change order.
    (d) Competitive proposals shall be solicited from an adequate number of qualified sources to ensure open competition. The loan recipients shall have a method for conducting technical evaluations of the proposals received and for selecting awardees.
    1. For the competitive best value selection method of procurement, awards shall be made to the responsible offeror whose proposal is most advantageous to the loan recipient, with price and other factors considered.
    2. For the competitive qualifications based selection method of procurement, statements of qualifications shall be solicited from an adequate number of sources. Statements of qualifications received from at least three responsible vendors shall be considered adequate unless it is determined by the loan recipient that it is in its best interest to proceed with the procurement having received less than three proposals. Statements of qualifications shall be evaluated based on the request for qualifications. Awards shall be made to the responsive and responsible vendor whose statement of qualifications is deemed to be most advantageous by the loan recipient.
    (e) Requirements for the noncompetitive proposals method of procurement shall be as follows:
    1. Procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source or, after solicitation of a number of sources, the competition is determined inadequate.
    2. Procurement by noncompetitive proposals may be used only when the award of a contract is infeasible under small purchase procedures, sealed bids or competitive proposals, and one of the following circumstances applies:
    a. The item is available only from a single source,
    b. The public exigency or emergency for the requirement shall not permit a delay resulting from competitive solicitation, or
    c. After solicitation of a number of sources, competition is determined inadequate.
    3. A cost analysis verifying the proposed cost data and an evaluation of the specific elements of costs and profits is required.
    4. Loan recipients shall submit the proposed procurement to the Department for pre-award review.
    (f) Design/build and Construction Manager at Risk (CMR) procurement:
    1. Competitive best value or competitive qualifications based selection shall be used as the selection process for design/build procurement.
    a. Requests for competitive best value or competitive qualifications based selection proposals shall be submitted to the Department prior to advertising for a determination of compliance with loan program requirements.
    b. The proposal solicitation shall describe the work eligible for a loan, the requirements with which the successful respondent shall comply, and the evaluation process to be used in selecting the successful respondent.
    c. The design/build team will be identified as part of awarding the contract. If the construction contractor is not identified as part of the award, procurement shall follow steps to ensure a competitive process as described in paragraphs 62-552.700(6)(a) through 62-552.700(6)(d), F.A.C.
    2. Requests for proposals shall be used in the selection process for CMR procurement.
    a. The request for proposals shall describe the work eligible for a loan, the requirements with which the successful respondent shall comply, and the evaluation process to be used in selecting the successful respondent.
    b. Requests for proposals shall be submitted to the Department prior to advertising for a determination of compliance with loan program requirements.
    c. Work performed directly by the CMR shall be limited to no more than 50% of the guaranteed maximum price unless a higher percentage is requested and approved by the Department. For any construction work that will be performed by the CMR, bids or request for proposals shall be submitted to and reviewed by the sponsor or any other neutral party as determined by the sponsor to avoid a conflict of interest.
    3. Advertising shall include announcement in a publication having general circulation on a statewide basis, in a construction trade journal, in a professional journal, or in an electronic plan room.
    4. The time allowed for development of proposals or qualifications shall be commensurate with the complexity and extent of the work and with the extent of the conceptual documents provided with the request for proposals.
    5. Both the qualifications of the respondents and the price for completing the advertised work shall be considered in the selection process.
    6. The project sponsor shall demonstrate that the competition solicited is sufficient for the complexity and extent of the work.
    (g) Loan recipients shall maintain a contract administration system that ensures contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.
    (h) Loan recipients shall maintain a written code of standards of conduct governing the performance of their employees engaged in the award and administration of contracts. No employee, officer, or agent of the loan recipient shall participate in selection, or in the award or administration of a contract supported by SRF funds if a conflict of interest, real or apparent, would be involved. Such a conflict would arise when the employee, officer, or agent, any member of his immediate family, his or her partner, or an organization that employs, or is about to employ, any of the above, has a financial or other interest in the firm selected for award. The loan recipient’s officers, employees, or agents shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors, potential contractors, or parties to subagreements. Loan recipients may set minimum rules where the financial interest is not substantial or the gift is an unsolicited item of nominal intrinsic value. To the extent permitted by state or local law or regulations, such standards of conduct shall provide for penalties, sanctions, or other disciplinary actions for violations of such standards by the loan recipient’s officers, employees, or agents, or by contractors or their agents.
    (i) Loan recipients are encouraged to use value engineering clauses in contracts for construction projects of sufficient size to offer reasonable opportunities for cost reductions. Value engineering is a systematic and creative analysis of each contract item or task to ensure that its essential function is provided at the overall lower cost. Loan recipients are also encouraged to complete water efficiency and energy audits to minimize operational costs.
    (j) Loan recipients shall make awards only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration shall be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources.
    (k) Loan recipients shall maintain records sufficient to detail the significant history of a procurement. These records shall include the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.
    (l) Loan recipients shall be responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements.
    (m) Retention of all required records for five (5) years after loan recipients or sub loan recipients make final payments and all other pending matters are closed.
    (n) For construction or facility improvement contracts or subcontracts exceeding the simplified acquisition threshold, the Department shall accept the bonding policy and requirements of the loan recipient when the Department has made a determination that the Department’s interest is adequately protected. If such a determination has not been made, the minimum requirements shall be as follows:
    1. A bid guarantee from each bidder equivalent to five percent of the bid price. The “bid guarantee” shall consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder shall, upon acceptance of his bid, execute such contractual documents as may be required within the time specified.
    2. A performance bond on the part of the contractor for 100 percent of the contract price. A “performance bond” is one executed in connection with a contract to secure fulfillment of all the contractor’s obligations under such contract.
    3. A payment bond on the part of the contractor for 100 percent of the contract price. A “payment bond” is one executed in connection with a contract to assure payment as required by law of all persons supplying labor and material in the execution of the work provided for in the contract.
    (o) A loan recipient’s contracts shall contain provisions for:
    1. Administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms,
    2. Such sanctions and penalties as may be appropriate,
    3. Termination for cause and for convenience by the loan recipient including the manner by which it shall be effected and the basis for settlement,
    4. Access by the loan recipient, the Department, or any of their duly authorized representatives to any books, documents, papers, and records of the contractor that are directly pertinent to that specific contract for the purpose of making audit, examination, excerpts, and transcriptions; and,
    5. Incorporating the Department’s Supplementary Conditions into its bid or request for proposals documents. These Supplementary Conditions include, but are not limited to, the following provisions:
    a. Equal Employment Opportunity compliance,
    b. Compliance with all applicable standards, orders, or requirements issued under section 306 of the Clean Air Act, section 508 of the Clean Water Act, and Executive Order 11738; and,
    c. Contracting with small and minority firms, women’s business enterprise, and labor surplus area firms (if applicable).
    (7) Asset Management Plan. Loan recipients are encouraged to implement an asset management plan to promote long term sustainability of the system. To be accepted for the interest rate adjustment and to be eligible for reimbursement, an asset management plan must be adopted by ordinance or resolution and written procedures must be in place to implement the plan and it shall be implemented in a timely manner. The plan must include each of the following:
    (a) Identification of all assets within the project sponsor’s system;
    (b) An evaluation of the current age, condition, and anticipated useful life of each asset;
    (c) The current value of the assets;
    (d) The cost to operate and maintain all assets;
    (e) A capital improvement plan based on a survey of industry standards, life expectancy, life cycle analysis, and remaining useful life;
    (f) An analysis of funding needs;
    (g) An analysis of population growth and drinking water use projections, as applicable, for the sponsor’s planning area, and a model, if applicable, for impact fees; commercial, industrial and residential rate structures;
    (h) The establishment of an adequate funding rate structure;
    (i) A threshold rate set to ensure the proper operation of the utility; if the sponsor transfers any of the utility proceeds to other funds, the rates must be set higher than the threshold rate to facilitate the transfer and proper operation of the utility; and,
    (j) A plan to preserve the assets; renewal, replacement, and repair of the assets, as necessary; and a risk-benefit analysis to determine the optimum renewal or replacement time.
Rulemaking authorized by Florida Statutes § 403.8532. Implements Florida Statutes § 403.8532. History—New 4-7-98, Amended 8-10-98, 7-17-17.