Florida Local Government Prompt Payment Act: Deadlines and Interest

Florida’s Local Government Prompt Payment Act sets firm deadlines for cities, counties, school districts, and other local public bodies to pay the people they buy from. Non-construction invoices are due within 45 days. Construction payment requests are due within 20 or 25 business days, depending on whether an architect or engineer has to sign off first. Miss those deadlines and interest runs automatically, at rates the contract cannot waive. A vendor who has to sue to collect is entitled to attorney’s fees and court costs if they win.

Who the Act Covers

The statute applies to every “local governmental entity”: county and municipal governments, school boards and school districts, special taxing districts, authorities, and any office, board, commission, department, or division inside them.¹ It does not cover state agencies, which follow a separate prompt payment statute at Section 215.422. If your customer is a state department rather than a local one, this Act is not your remedy.

A “vendor” under the Act is anyone selling goods or services, selling or leasing personal property, or leasing real property directly to a covered entity.¹ “Construction services” is defined separately and covers all labor, services, and materials tied to constructing, altering, repairing, demolishing, or improving real property. The line between construction and non-construction matters, because each track has its own deadline and its own interest rate.

The Payment Deadlines

Non-Construction Purchases: 45 Days

For goods, services, leases, and any purchase that isn’t construction, the local government has 45 days to pay.² The clock starts on the latest of several possible dates: the day the chief disbursement officer receives a proper invoice (after governing-body approval, if required), the day the entity accepts delivery, the day services are completed, the day a rental period begins, or a date the contract specifically sets.³

Every invoice or payment request must be stamped with the date the local entity received it, and that stamp is what anchors the deadline.² If goods are delivered on the first of the month but the invoice isn’t received until the fifteenth, the 45 days run from the fifteenth. Partial deliveries allowed by contract each get their own 45-day window.

Construction: 20 or 25 Business Days

Construction deadlines are shorter and turn on whether an agent has to review the payment request:

25 business days when an architect, engineer, or other agent must approve the payment request before it goes to the local government.
20 business days when no such approval is required.⁴

If a construction payment request is deficient, the local government must reject it in writing within 20 business days and identify what needs to be fixed.⁴ Once the contractor resubmits, the entity has 10 business days to pay or reject again. If governing-body approval is required for the corrected request, the deadline extends to the first business day after the next regularly scheduled meeting.

Contractors have a lever when a payment request with agent approval goes unanswered past the deadline. The contractor can send an overdue notice. If the local government still doesn’t reject the request within four business days of that notice, the request is deemed accepted, except for any portion that is fraudulent or misleading.⁴

Retainage on Construction Contracts

Retainage is capped at 5 percent of each progress payment for construction contracts worth more than $200,000.⁴ Contracts at or below $200,000 fall outside the retainage provisions, so the contract itself controls. A local government is free to set a lower percentage, reduce it on a schedule, or release retainage early.

Once the project reaches substantial completion and a punch list is issued, the local government must pay the remaining balance, including previously withheld retainage, within 20 business days. It can hold back an amount equal to 150 percent of the estimated cost to finish the punch-list items.⁴ After every item is done, the contractor submits a final payment request for the withheld amount. If there’s a good-faith dispute over whether specific items are complete, the entity may keep withholding up to 150 percent of the cost to complete those specific items.

Paying Subcontractors and Suppliers

The Act pushes payment down the chain. Once a contractor is paid by the local entity, it has 10 days to pay its subcontractors and suppliers. When a subcontractor gets paid for lower-tier work, it has 7 days to pass that money along.⁴

Disputes are allowed, but only with written notice identifying the disputed amount and what will resolve it. Any undisputed portion still has to be paid within the 10- or 7-day window. Holding up an entire check because one line item is contested is not permitted.

Interest When Payments Are Late

The interest rate depends on the track.

For construction, late payments bear interest at 2 percent per month, or the contract rate, whichever is greater.⁴ That is 24 percent annualized. A contract clause that tries to bar this interest is void.⁵

For non-construction purchases, interest runs at 1 percent per month on the unpaid balance, but it doesn’t begin until 30 days after the payment due date.² Any period shorter than a full month counts as one month, and unpaid interest compounds monthly. One detail catches many vendors: you have to invoice the entity for accrued interest to collect it. It doesn’t automatically appear on a later check.

If the Invoice Is Rejected or a Dispute Arises

When a non-construction invoice is defective, the local government has 10 days from receipt to notify the vendor in writing and explain what needs to be corrected.⁶ That notice stops the payment clock. For construction payment requests, the deadline is 20 business days as described above.

When a real dispute develops, the local government must resolve it through its own dispute resolution procedure. That procedure has to begin within 30 days after the invoice was received and reach a final decision within 45 days of receipt.⁶ Going through it doesn’t stop a court from later deciding the matter fresh.

Who wins the internal dispute changes when interest starts running. If the local government prevails, interest begins 15 days after its final decision. If the vendor prevails, interest reaches all the way back to the original payment due date.⁶

A local government that fails to open its dispute procedure on time can lose the objection entirely. The contractor sends written notice of the failure. If the entity still hasn’t started proceedings within four business days of that notice, the objection is deemed waived, and mandatory interest under Section 218.735(9) runs from the date the original invoice was submitted.⁶ The waiver doesn’t excuse the contractor from its own contractual duties, but it takes away the entity’s ability to keep withholding on that request.

Suing to Collect: Mandatory Attorney’s Fees

If the informal process and the internal dispute procedure don’t produce payment, a vendor can sue. The statute directs that the court “shall” award court costs and reasonable attorney’s fees, including fees through appeal, to the prevailing party.⁶ Fee-shifting is mandatory rather than discretionary. For a vendor with a legitimate claim, that changes the math on going to court.

It cuts both ways. A vendor who sues and loses can be ordered to pay the local government’s legal costs. The provision is designed to discourage weak claims from either side.

Contracts Paid With Federal Funds

A local government cannot make a purchase intended to be paid with federal funds without reasonable assurance that the federal money will actually come through.⁷ If either payment or payment timing depends on receiving federal funds or federal approval, the contract and any solicitation must say so plainly. Read that language carefully before signing. A federal-funding contingency can push payment past the normal statutory deadlines, and the interest provisions may not cover a period when the entity is legitimately waiting on federal money. On mixed state-and-federal projects, figuring out which payment rules apply to which portion is worth doing before the first invoice.

1
Florida Senate. Florida Code 218.72 – Definitions
2
Florida Senate. Florida Code 218.74 – Procedures for Calculation of Payment Due Dates
3
Florida Senate. Florida Code 218.73 – Timely Payment for Nonconstruction Services
4
Florida Senate. Florida Code 218.735 – Timely Payment for Purchases of Construction Services
5
Florida Senate. Florida Code 218.75 – Mandatory Interest
6
Florida Senate. Florida Code 218.76 – Improper Payment Request or Invoice; Resolution of Disputes
7
Florida Senate. Florida Code 218.77 – Payment by Federal Funds