On September 9, 2013, Governor Jerry Brown signed California Assembly Bill 44 (“AB 44”), which amends Public Contract Code §4104 of the Subletting and Subcontracting Fair Practices Act. According to AB 44, all bids on any public work or improvement project must include the name and location of the place of business and the contractor license number of each subcontractor who will provide labor or render services in excess of .5% of the prime contractor’s total bid amount. The amended version of Public Contract Code §4104 becomes operative on July 1, 2014.
Presently, Public Contract Code §4104 only requires submission of a subcontractor’s name and location in a bid. Thus, when a public entity reviews bids submitted for public construction projects, that entity must rely solely on the contractor’s name and location when verifying licensing status and good standing with the Contractors State License Board. Due to similarities between contractors’ names, the verification process can become confusing, burdensome and time consuming. AB 44 was designed to improve a public entity’s ability to verify the status of subcontractors by using their unique six digit contractor license number, which will only produce a single search result. Theoretically, the amendment should increase the efficiency of awarding public contracts by reducing the time length of the licensing verification process.
Also of note, according to amended Public Contract Code §4104 (a)(2), an inadvertent error in listing a contractor’s license number in a bid does not constitute grounds for either filing a bid protest or considering the bid nonresponsive if the correct contractor’s license number is submitted by the prime contractor within 24 hours of the bid opening and the corrected license number corresponds to the name and location of the subject contractor.