If you are a newly minted construction contractor who wants to start bidding on California Public works projects, there are few things you need to know. Depending on whether you are bidding as a prime contractor (GC) or as a sub, there are definite protocols and procedures that come into play.
Getting into the public works arena is a laudable goal for any contractor, but one needs to be properly prepared and have a complete understanding of what will be required on such projects. Today’s article will highlight just some of the requirements your firm will encounter
Here are some preliminary points of information to be considered:
- You must have the proper contractor’s license and be registered with the Division of Industrial Labor (DIR) and pay the registration fee – $400 (annually). This is an absolute prerequisite before even bidding the job.
- Prevailing wages (i.e. union scale) are required for ALL of your construction trade workforce, period, without exception. This will be documented and recorded by the fact that you will be required to submit certified payrolls each week to the DIR.
- If you are bidding as a general contractor or the Prime, then you will be required to post Payment & Performance bonds if the contract exceeds $35,000. Again, no exceptions.
- You must bid per the contract documents (plans & specifications), without qualification or modification, and the bid must be submitted on the Bid Form provided by the awarding authority.
- Progress payments during the life of the project are paid monthly in arrears, and there is no upfront deposit. So for your first progress payment, you will be carrying all costs for at least 45 days assuming the owner pays within two weeks after invoicing.
- If you are bidding as a subcontractor, be aware that a significantly large number of
Prime GC’s who build public works are signatory union contractors. That means that
your company may be required to sign a one-time Project Union Agreement in order to
be awarded your subcontract.
- Workers compensation and public liability insurance is mandatory for all contractors
As you can see, these conditions vary significantly from private commercial work, and are completely different and more stringent than residential construction.
Written by Ed Duarte, Construction/ Public Works Specialist
DBE SS Northern Region Program, Norcal PTAC