Letter from the President, December 2018

Dispute Resolution Services

Over the years, we have had the privilege to work with our small contractor friends by providing support and resources for a myriad of obstacles that have ranged from cash flow issues to dispute resolution with agencies and primes.  Often, many of these issues are resolved by education and communication between the parties.  Occasionally, those issues are more contentious and are addressed through third party support such as arbitration and mediation. 

Most recently, a friend approached us about subcontractor listing issues and wanted to know their rights as a listed subcontractor on a bid/build project.  In that particular instance, the prime that was found responsive and awarded the project had listed this subcontractor and, after the award, decided not to use the services on the project. Our friend wanted to know their rights for recompense and how to avoid this situation in the future.

When a subcontractor is listed on bid for a publicly funded project, and the prime is awarded the contract, the prime must submit a substation request based on the following criteria.

The subcontractor:

  • Refuses to execute the contract

  • Becomes insolent or applies for bankruptcy

  • Refuses to perform their contractual scope of work

  • Fails or refuses to meet bonding requirements

  • Does not have the proper license

Or The Prime:

  • Proves to the awarding authority that the sub was listed as a clerical error

Prior to the approval of the prime contractor’s request for substitution, the awarding authority shall give notice in writing to the listed subcontractor and the reasons for the request.
— California Public Contract Code Section 4107 

Knowing your rights as a small contractor are imperative to protecting your company and minimizing your company’s risks.  This holds true for all listed subs, regardless if you are small business certified or not.

If you have any questions or want additional information, please feel free to send me an email at abbigail@cpmlogistics.net.

Happy bidding!