Effective July 1, 2014 All Contractors Who Intend to Bid or Perform Work on Public Works Projects Must Register Online With DIR

By Carrie Bushman, Brown | Cook LLP

With Governor Jerry Brown’s approval of SB 854, a budget trailer bill signed into law on June 20, 2014, all contractors planning to bid on future public works jobs will be required to register with the Department of Industrial Relations (DIR) and pay an annual registration fee which will be deposited into the newly created State Public Works Enforcement Fund.  Monies deposited into the Fund will be used to administer the new contractor registration requirements and to fund DIR’s public works compliance monitoring, enforcement, and administration.  The new law also requires public works contractors to begin submitting their certified payroll records (CPR) electronically to the Labor Commissioner. The requirement to submit electronic CPRs will be phased in gradually, applying to all public works contracts by January 1, 2016. 

Contractor Registration

Effective July 1, 2014, all contractors (including subcontractors) who intend to bid or perform work on public works projects must register online with the DIR in order to be qualified to bid on, be listed in a bid proposal, or engage in the performance of any public works contract.  The registration application can be found at https://efiling.dir.ca.gov/PWCR/ActionServlet?action=displayPWCRegistrationForm. 

The requirement to list only registered contractors on bids becomes effective on March 1, 2015.  The requirement to only use registered contractors and subcontractors on public works projects applies to all projects awarded on or after April 1, 2015.    

Annual Registration Fee

As part of the registration process, public works contractors must pay an initial nonrefundable fee of $300 and an annual renewal fee on or before July 1 of each year thereafter. The registration fee may be adjusted in the future, but no more than annually.  A contractor who fails to pay the renewal fee on or before the expiration of any prior period of registration shall be prohibited from bidding on or engaging in the performance of any public works contract until once again registered. 

Other Registration Requirements

To qualify for registration, the contractor must also meet the following minimum qualifications:           

· Must have workers’ compensation coverage for any employees

· Must only use subcontractors who are registered public works contractors; 

· Must have a CLSB license, if applicable to the trade;

· Must have no delinquent unpaid wage or penalty assessments due to any employee or agency

· Must not be under debarment

· Must not be in prior violation of the registration requirement once it becomes effective.  However, first time violators will be able to avoid 12 month disqualification by paying an additional penalty.  

Impact on Bid Process

SB 854 provides that an inadvertent error in listing a subcontractor who is not registered in a bid proposal shall not be grounds for filing a bid protest or for considering the bid non-responsive, provided that (1) the subcontractor is registered prior to the bid opening; (2) within 24 hours after bid opening, the subcontractor is registered and has paid the penalty registration fee; or (3) the subcontractor is replaced by another registered subcontractor.  The new law also provides that a subcontractor’s failure to be registered shall be grounds for the contractor, with the consent of the awarding body, to substitute a registered subcontractor in place of the unregistered subcontractor.  

SB 854 also requires contractors and subcontractors on all public works projects to submit their certified payroll reports electronically to the Labor Commissioner, unless excused from doing so.   The requirement applies immediately to projects that have already been under Compliance Monitoring Unit monitoring, it will apply to new projects awarded on or after April 1, 2015 or other projects as determined by the Labor Commissioner, and will apply to all projects, new or ongoing, on and after January 1, 2016.

If you have any questions about SB 854, please contact Carrie Bushman at (916) 442-3100 or cbushman@cookbrown.com. 

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