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 subcontractor, 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.
- You must have the proper contractor’s license, be registered with the Division of Industrial Labor (DIR), and pay the registration fee – ($400 annually). This is an absolute prerequisite before even bidding for the job.
- Prevailing wages (i.e. union scale) are required for ALL of your construction trade workforce, period – without exception. This applies to both general and subcontractors. You cannot pay workers on a “piece-work” basis. 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 Prime, then you will be required to post Payment & Performance bonds if the contract exceeds $25,000. 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 that is always 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 GCs who bid and build public works projects 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 much more stringent than residential construction. Your PTAC counselors can help with every step of this process and beyond. If you feel unsure of the process, please reach out to your procurement specialist or apply on our website if you’re not yet a client.
If you are looking for help with government contracting or want no-cost help to find contracting opportunities, please contact your Norcal PTAC counselor for assistance or apply for services today!
If you have more questions, please contact us at firstname.lastname@example.org or (707) 267 – 7561
Authored by: Ed Duarte, Norcal PTAC Public Works & Construction Specialist