By Shauna Krause, President, Capitol Services, Inc.
While you can ‘rent’ almost any form of construction equipment, that convenience does not extend to contractor’s licenses. A new CSLB enforcement effort is underway in determining who is ‘buying’ into qualifying licenses. Who can and can’t bid on public works is now being sorted out with a new online effort…
Q: I am an attorney and I have a client with a competitor who seems to be “renting” a Responsible Managing Officer (RMO). This individual is neither a legitimate Officer, nor is he involved with this company. This person appears to be an “independent contractor” and is also listed on another corporation’s license as an RMO (I’m going to go out on a limb and take the assumption that he is not involved with this corporation either).
As you may know, B&P Code Section 7068.1(d) requires contractors who are on multiple licenses to submit “detailed information on the qualifying individual’s duties and responsibilities for supervision and control of the applicant’s construction operations.” Can you obtain a copy of what was submitted with regards to the RMO’s claims of supervision and control of the construction operations?
A: I looked up the license in question and it was issued back in 2001. The CSLB has only recently been getting tough on RMO abuses, so it is unlikely that anything would have been submitted to describe the individual’s duties with regards to supervision and control of the company’s operations.
However, according to the CSLB’s Summer 2014 Newsletter, there has been a significant rise in complaints against license Qualifiers “suspected of acting as paid figureheads for a company, but exercise little to no control over its operations.” The CSLB has put a Task Force in place with the specific duty of watching for new applicants that apply for a waiver who are seeking to rent their qualification for a fee.
Also explained in the newsletter, a new law took effect January 2014 that is an addition to the Code Section you mentioned (7068.1) that “now authorizes the CSLB to discipline a Qualifier, and the licensed entity they are qualifying, when the Qualifier is not actively involved in the construction activities of the license they are representing. In addition to administrative penalties, the individual falsely serving as a Qualifier on the license can be charged with a misdemeanor and be sentenced to serve up to six months in jail, and be required to pay a fine from $3000 - $5000, or both, if convicted.”
I might suggest filing a complaint with the CSLB against the licensee. Since the Enforcement Unit has established a Task Force to specifically investigate these particular complaints, they will likely be right on top of it. You can go to the CSLB’s website at www.cslb.ca.gov for more information on the complaint process.
Attention Public Works Contractors: A new online application system is available for those that must be registered with the Department of Industrial Relations (DIR) to verify that they are eligible to bid on California public works projects. With the new online system, public works contractors can create an account and complete the required forms. The new online system also allows agencies that oversee a public works project to search a database of all qualified contractors. For more information you can visit the DIR’s website at dir.ca.gov
While knowledge is power, knowing where to go for the answers is half the battle. Get expert assistance immediately when you call 866-443-0657, email info@cutredtape.com, or write us at Capitol Services, Inc., 1225 8th St. Ste. 500, Sacramento, CA 95814. Research past columns at www.cutredtape.com.
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