Contracting in California

With the downturn in construction nationwide, California has not been immune to the loss of opportunities for contractors. Now, it is more important than ever to be competitive in the marketplace.

With the strong military presence, there are always projects coming up for the Navy and Marine bases, especially in Southern California. What bidders have experienced though, is increased competition from construction companies that are new to the public works or Federal project arena.

Along with the increased competition are increased numbers of disputes. As a contractor your best weapon is knowledge. Know what you are agreeing to in your contracts, know what you need to do to have proper licensing, insurance, bonding etc. Know the legal tools that you can use such as mechanics' liens, stop notices, prompt payment statutes, or even alternative dispute resolution procedures. Above all, know what you are getting into.

The last thing that a contractor wants is to have an administrative or technical problem with licensing to eliminate them from getting a project.


Get to Know the Contractor's State License Board
The CLSB (as it is more commonly called) regulates all construction contractors in California. Their authority is to license contractors, administer the laws, and investigate and settle disputes. Their obvious role is to protect the public, both from unlicensed contracting activity and bad contractors. The benefit to licensed contractors is the CSLB keeps unlicensed contractors from taking work from legitimate contractors.

Getting the Advantage by joining a trade group. One way for contractors or suppliers to have an advantage is to get involved with local trade groups. Often, these groups spearhead new opportunities by having active liaisons with agencies that award the work.

This does not guarantee that you will get work, and you will still have to be competitive in the bidding process, but you will have a much better understanding of the requirements for bidding. Often, trade groups will host seminars along with the agencies who are putting projects out for bid (Military, municipalities, state agencies) giving contractors the opportunity to ask questions and be better prepared for bidding on work.

If you have a dispute, you can often call on your trade group for advice or recommendations on how to handle the problem. More often than not, a member has already had to deal with a similar situation in the past.


Understand the Laws, Understand your Contracts
If you are a contractor looking at bidding on any project, be it public works or a private project, you need to know what you are contracting for.

For public works projects, it is important to understand the public contracting laws prior to bidding on and performing public works projects. There are some very specific requirements and some very specific laws that apply, and any deviation from these requirements or laws is usually not possible. While the laws may seem overly restrictive, they can be used to a contractor's advantage, as the public agency must also comply with the laws as well.

See the article "Are Public Entities above the Law?" (PDF version) , and "Subcontractors: The Public Contract Code Can Protect You From Abuse -If You Let It" (PDF version)

If you are bidding on private works, you need to know what your obligations are. Because there are less restrictions on contract terms and conditions than public works projects, it is especially important to be confident that you know the contract terms. As a contractor, contracts are a way of life. It isn't enough to be skilled at a trade, you must also know contracts in order to be successful.

For more information about construction contracts go to this site: contract-laws.com.

For more information on training programs that will bring you up to speed go to this site: construction-laws.com.


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