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Bulletin: California Public Works Contractors and Subcontractors Must Register!

Summary: Public works contractors and subcontractors take note- a new law requires you to register with the California Department of Industrial Relations as of July 1, 2014, even if your current public works project is already underway.  Failure to register disqualifies you from the bidding and contracting process, can cause an outright bid rejection and/or contract cancellation and can void or cancel an existing contract.  

Effective July 1, 2014, California legislation (Stats. 2014, ch 28, sections 62-63) amended the existing prevailing wage laws that govern all public works and hybrid construction to require that a prospective contractor or subcontractor on public works bids and contracts:  (1) register with the Department of Industrial Relations ("DIR"); (2) pay an initial non-refundable registration fee and an annual renewal fee; and (3) provide information establishing the contractor's eligibility.  The DIR must maintain a list of the registered contractors on its website. 

A contractor or subcontractor who fails to properly register cannot be qualified "to bid on, be listed in a bid proposal... or engage in the performance of any public work[s] contract" that is subject to California's prevailing wage laws and the new amanement.  

If an unqualified contractor does enter into such a contract, the contract will be "unlawful, void or voidable."  If an unqualified subcontractor enters into a contract, the prime contractor can substitute a registered, compliant subcontractor at the consent of the public entity.  The new requirements leave uncertain whether or not a contractor can recover the reasonable value of its labor, equipment, materials and services provided in an instance where a contract is later canceled due to the contractor's failure to register. 

Take Away For Public Works Contractors and Subcontractors

REGISTER NOW if you have not done so already.  You can find more information at the California Department of Industrial Relations' website.  

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