REGISTRATION WILL BE REQUIRED BEFORE YOU CAN SUBMIT A BID ON ANY PUBLIC WORKS PROJECT ON OR AFTER MARCH 1, 2015
OR ANY CONTRACT ENTERED INTO ON OR AFTER APRIL 1, 2015.
New statutes have been added to the California Labor Code which require registration of all contractors and subcontractors prior to bid submission on any Public Work.
® What the New Statutes Require:
California Labor Code (ALC@) sections 1725.5 and 1771.1 require all contractors and subcontractors to be currently registered with the Department of Industrial Relations (ADIR@) to be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code (which provides what must be included in a bid by a public entity), or engage in the performance of any contract for public work, as defined in this chapter, unless currently registered and qualified to perform public work. LC” 1725.5, 1771.1.
If you are not registered you will not be qualified to bid on Public Works Projects.
Notice of the certification requirement must be included in all bid invitations and public works contracts, and no bid shall be accepted nor any contract or subcontract entered into without proof of the contractor’s or subcontractor’s current registration to perform public work pursuant to section 1725.5.
® When Does Registration Begin and When Must You Be Certified?
Registration begins July 1, 2014 and the requirements of sections 7125.5 and 1771.1 apply to any bid proposal submitted on or after March 1, 2015, and any contract for public work, as defined in this chapter, entered into on or after April 1, 2015. LC’§ 1725.5(a)(1) and (e), 1771.1(g).
® How Do You Qualify for Registration?
The requirements for registration are set out in California Labor Code section 1725.5, which provides what each contractor or subcontractor must do to qualify for registration.
You can register on-line by going to the DIR website, www.dir.ca.gov, and filling out an on-line application.
In short, the contractor or subcontractor must pay an initial non-refundable fee of three hundred dollars ($300) to qualify for registration, and an annual renewal fee on or before
July 1 of each year thereafter, the amount of which is not stated. LC’1725.5(a)(1).
Both the initial fee and the renewal fee may be adjusted annually by the DIR. LC’1725.5(a)(1). Be aware that, if a contractor or subcontractor fails to timely pay the renewal fee it will be prohibited from bidding on or engaging in the performance of any contract for public work until once again registered with the DIR. LC’1725.5(c). However, if the failure to pay the renewal fee was inadvertent, the contractor or subcontractor may renew its registration retroactively by paying an additional non-refundable penalty renewal fee equal to the amount of the renewal fee within 90 days of the due date of the renewal fee. LC ‘1725.5(c).
Each contractor or subcontractor must also provide evidence, disclosures or releases, as necessary, to establish that it:
(A) has sufficient Workers= Compensation coverage;
(B) is licensed by the Contractor State License Board;
(C) does not have any delinquent liability to an employee or the state for any assessment of 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, including a confirmed arbitration award (but, if any such judgment, order, or determination is under appeal at the time of application, the contractor or subcontractor shall not be disqualified from certification provided that the contractor or subcontractor has secured the payment of any amount eventually found due through a bond or other appropriate means);
(D) is not currently debarred under Labor Code section 1777.1 or under any other federal or state law providing for the debarment of contractors from public works; and
(E) has 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 with the DIR within the preceding 12 months or since the effective date of the new certification requirements, whichever is earlier, which may be waived if: (i) the contractor or subcontractor has not previously been found to be in violation of the requirements of this paragraph within the preceding 12 months, and (ii) the contractor or subcontractor pays an additional nonrefundable penalty registration fee of two thousand dollars ($2,000).
It is not a violation for an unregistered contractor to submit a bid that is authorized by section 7029.1 of the Business and Professions Code (Joint Venture License) or by sections 10164 or 20103.5 of the Public Contract Code (projects involving federal funds), provided the contractor is registered to perform public work pursuant to Labor Code section 1725.5 at the time the contract is awarded. LC’1771.1(a).
FOR PRIME CONTRACTORS:
® What Happens if Your Listed Subcontractor Is Not Registered?
An inadvertent error in listing a subcontractor who is not registered pursuant to section 1725.5 in a bid proposal shall not be grounds for filing a bid protest or grounds for considering the bid nonresponsive, provided that:
(1) The subcontractor is registered prior to the bid opening;
(2) The subcontractor is registered within 24 hours after the bid opening and has paid the penalty registration fee; or
(3) The subcontractor is replaced by another registered subcontractor pursuant to section 4107 of the Public Contract Code (failure to be registered to perform public work are grounds under section 4107 of the Public Contract Code for the contractor, with the consent of the awarding authority, to substitute a subcontractor who is registered in place of the unregistered subcontractor).
You can check to see if your subcontractor is registered to perform public work by going to the public works section of the DIR website, www.dir.ca.gov.
® What Happens to the Contract if a Contractor or Subcontractor is Not Properly Registered?
A contract entered into with any contractor or subcontractor who is not property registered
shall be subject to cancellation. LC ‘1771.1(f).
IF YOU HAVE ANY QUESTIONS OR NEED HELP FILLING OUT THE APPLICATION FOR REGISTRATION, PLEASE FEEL FREE TO CALL OUR FIRM AND SPEAK WITH MARTHA EAGER, (213) 612-9900.