Bids without Active Licensing & CA License Requirements

Competition is often tight in construction bidding so knowing the rules and regulations is often crucial to keeping ahead of the curve in winning bids. Getting your license can also be complex or confusing, and the advice we share today may be helpful to many who also want to ‘experience’ what it’s like to have your own contractor’s license…

Q:  First, let me say thank you for your wonderful service, we read your column every week.

Now for my questions, a situation has come up where an out-of-state contractor is in the process of obtaining their CA contractor’s license (“almost finalized”) but they currently have a private commercial project out to bid (they are a Prime Contractor and will be hiring Subs).  They’ve stated that their CA license will be issued before construction starts.  The following was copied from the CSLB website:  ”All businesses or individuals who construct or alter any building, highway, road, parking facility, railroad, excavation, or other structure in California must be licensed by the California Contractors State License Board (CSLB) if the total cost (labor and materials) of one or more contracts on the project is $500 or more. Contractors, including subcontractors, specialty contractors, and persons engaged in the business of home improvement (with the exception of joint ventures and projects involving federal funding) must be licensed before submitting bids.”

Does this mean that only in residential work you have to have a license to ‘submit a bid’ but in commercial building you can bid without one and just have to have it by the time you sign contracts?  Or maybe not even at contract signing, but only once you start actual work?

This would be valuable information for us to know and I’d like to caution this out-of-state contractor if warranted.  Your help is greatly appreciated.

A:  Thank you for contacting Capitol Services and also for following the weekly column.  The key to that statement that you found on the CSLB’s website is “Contractors, including subcontractors, specialty contractors, and persons engaged in the business of home improvement (with the exception of joint ventures and projects involving federal funding) must be licensed before submitting bids.”

All contractors regardless of whether it is residential or commercial work, with the exception mentioned above, are required to be licensed before submitting bids.

Further, B&P Code Section 7028 states that it’s a misdemeanor for a person to engage in the business or act in the capacity of a contractor within the State without having a license (with very few exceptions as mentioned above). Bidding on work as well as signing contracts is considered acting in the capacity of a contractor and therefore a license is needed.

 

Q:  I’ve been selling construction for 7 years now and recently I wanted to get my own contractor’s license. I was told by the school I went to that I need to have 4 years of practical experience doing the actual work and not only selling.  Is that true? And if it is, is there a way around it?

A: Whomever you spoke with at the school you attended was correct in that some practical experience is required in order to obtain your contractor’s license in California.  You are required to document at least four full years of experience at a journey level, or as a foreman, supervisor, or contractor in the trade that you are applying for.  At least one full year needs to be practical experience.  There is no way around this requirement.  The CSLB will consider education credit toward the four years of required work experience.  The amount of time they will credit you depends on your education level, your field of study and the specific trade you are applying for.

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