CALIFORNIA PUBLIC CONTRACTS IN CONSTRUCTION PART 4: CONTRACTOR REGISTRATION

Are you hoping to register yourself as a Contractor? Are you not sure if you need to be registered? Don’t know where to start?

Fear not.

As a law firm that’s been practicing construction law in Southern California for years, we know there are a lot of moving parts when it comes to public works projects. Luckily, our team of attorneys have created this California Public Law Contract series to help our fellow contractors cut through all the noise and help you figure out what you need to be on your way.

California state law requires that all contractors be registered in order to work. So, to bid on, be listed in a bid proposal, or engage in the performance of any public work contract, contractors, and subcontractors must register with the Department of Industrial Relations and pay an annual registration fee.

To register, contractors and subcontractors must demonstrate that they

• Carry the required workers’ compensation coverage;
• Are properly licensed under the Contractors’ State License Law;
• do not have any delinquent liability to an employee or the state for back wages or related damages, interest, fines, or penalties pursuant to any final judgment, order, or determination by a court or any federal, state, or local administrative agency;
• are not currently debarred (disqualified by a public entity) or under any other federal or state law providing for the debarment of contractors from public works; and
• have not bid on a public works contract, been listed in a bid proposal, or engaged in the performance of a contract for public works without being lawfully registered within the preceding 12 months, with limited some exception.

Awarding bodies are required to include notice of the registration requirement in bid invitations and public works contracts and cannot accept a contract or subcontract entered into without proof of the contractor or subcontractor’s current registration.

• Inadvertently listing a subcontractor who is not registered is not grounds for a bid protest or for considering the bid nonresponsive, provided
  • (1) the subcontractor is registered prior to the bid opening,
  • (2) within 24 hours after the bid opening, the subcontractor is registered and has paid the specified penalty registration fee, or
  • (3) the subcontractor is replaced by another registered subcontractor.
• Failure of a subcontractor to be registered is grounds for substituting the subcontractor.

Public works contracts entered into with any contractor or subcontractor in violation of the registration requirements are subject to cancellation, but are not unlawful, void, or voidable solely due to the failure of the awarding body, contractor, or any subcontractor to comply with the requirements of the Labor Code.

The preceding is a summary of legal subjects provided for informational purposes only.  Most legal issues need complex factual and legal analysis. You are advised not to rely on these blogs and seek legal advice about your specific issues from a licensed attorney in your jurisdiction.  Nothing in these writings is intended to create, or creates, an attorney-client relationship.  For consultation with a licensed attorney you may contact Ghassemian Law Group at 949-436-2785 or email us at info@glgattorneys.com.