For general contractors, bidding on public construction contacts and infrastructure projects is no small undertaking. Managing and shepherding those projects to completion once a bid has been accepted can be even more complicated and fraught with risk, especially when it comes to the supervision or substitution of subcontractors. In California, strict laws designed to limit bid shopping and bid peddling on public contracts also limit the rights of general contractors to change subcontractors on public contracts. Failure to comply with those laws can result in significant exposure.
The experienced construction law and public works lawyers at Gibbs Giden can help contractors with the substitution of subcontractors in a manner that protects them from potential liability and facilitates a smooth and compliant transition that allows the project to proceed apace. We also help public entities prepare for and administer the substitution process and hearings, and we can help subcontractors navigate the process as well.
How the Law Can Affect Subcontractors
California law requires that all bidders on public projects specifically list all subcontractors that will work on the project, as well as the work they are to perform. Once the bid has been accepted, the contractor cannot legally substitute any subcontractor listed in the original bid except in very limited circumstances, such as when licensing or bond issues arise or the designated subcontractor cannot perform the work.
If a contractor replaces a subcontractor for any reason outside those permitted in the law, and fails to provide proper notice, the awarding public entity may either cancel the contract or assess a penalty up to 10 percent of the amount of the subject subcontract. Moreover, disciplinary action by the Contractors State License Board as well as additional penalties and lost profits due to delay can add to the turmoil and costs of non-compliance.
Turn to Gibbs Giden for Assistance With Subcontractor Substitution Matters
When subcontractor substitution issues arise, general contractors can rely on the sound judgment and insights that the attorneys at Gibbs Giden have acquired through their four decades of construction law and public contracts experience. For assistance resolving subcontractor substitution matters, please call our Los Angeles office at 310-552-3400, our Irvine office at 949-287-8044 or our Las Vegas office at 702-836-9800, or contact us online. We look forward to assisting you.