An Administrator's Guide to California Private School Law

Chapter 17 – Construction

B. L ICENSING All contractors must hold a valid contractor’s license. It is unlawful for any person to engage in the business or act as a construction contractor without a valid license issued by the Contractors’ State License Board. 2311 The contractor must hold a valid license at all times during the performance of the construction or the contract term. 2312 The purpose of this requirement is to protect the public from incompetence and dishonesty in those who provide building and construction services. 2313 The licensing requirements provide minimal assurance that all persons offering construction services have the requisite skill and character, understand applicable local laws and codes, and know the rudiments of administering a contracting business. 2314 If a contractor performs work without a license, it cannot sue the owner for unpaid work. 2315 In fact, an unlicensed contractor may be required to return all compensation paid by the owner for the contractor’s services. 2316 The Legislature determined that the importance of deterring unlicensed persons from engaging in the contracting business outweighs any perceived harshness against unlicensed contractors. 2317 A narrow exception to this rule applies, however, if the contractor substantially complied with the license requirements. 2318 Schools should note that these protections do not apply to claims by an unlicensed construction manager against an owner. A construction manager on a private project is not a contractor within the meaning of the licensing statutes. 2319 C. B IDDING P ROCESS Schools can directly select any contractor to construct their project. Schools are under no obligation to invite contractors to submit pricing proposals, but it may be in a school’s best interests to do so. Schools have the option to send invitations to bid to specific qualified contractors or to openly advertise for bids in construction trade papers or other sources. When the school has multiple offers to choose from, it can select the best-qualified contractor while considering the offered price of construction. Schools must prepare bid documents if they intend to utilize a bidding process. The bid documents control the bidding process and procedures and establish the school’s ability to award a contract. Schools should ensure that an invitation to bid specifically reserves the school’s right to reject all bids, to award the contract to a contractor other than the lowest bidder, and to waive all irregularities or mistakes in the bidding process. Invitations to bid are generally considered requests for offers and do not constitute actual offers. No actual contractual relationship occurs until the school accepts a contractor’s bid. 2320 LCW Practice Advisor

Schools should have their construction legal counsel review the bid documents to ensure the language clearly states that the school is under no obligation to award the contract to any responding bidder, including the lowest bidder, and that no contractual relationship exists until the school accepts the bid and the parties execute a written contract.

An Administrator’s Guide to California Private School Law ©2019 Liebert Cassidy Whitmore 556