Florida Construction Law Authority : Florida Construction Lawyer & Attorney: Becker & Poliakoff Law Firm: Construction Law

Section 489.105(13), Florida Statutes defines a “Business Organization” as “any partnership, corporation, business trust, joint venture, or other legal entity which engages or offers to engage in the business of contracting or acts as a contractor as defined in this section.”

This definition is used in Section 489.119(2) of the Statute as follows: “If the applicant proposes to engage in contracting as a business organization, including any partnership, corporation, business trust, or other legal entity, or in any name other than the applicant’s legal name or a fictitious name where the applicant is doing business as a sole proprietorship, the applicant must apply for registration or certification as the qualifying agent of the business organization.”

Effective October 1, 2009, the Department of Business and Professional Regulation eliminated the requirement for a separate business license for construction companies in Florida. However, contractors are still required to qualify construction businesses with their license and provide background information for the business that they are seeking to qualify. The name of the qualified business will continue to be placed on the contractor’s license, but the Certificate of Authority issued to the business is no longer regarded as a license. 

The qualifying agent has the responsibility to supervise, direct, manage and control construction activities on a job for which he has obtained the building permit on behalf of the Business Organization. The qualifying agent has a statutory duty to supervise all field work and said duty is non-delegable. The qualifying agent is also responsible to the Construction Industry Licensing Board for the financial matters of the Business Organization being qualified. Among other things, the application for qualifying agents must include an affidavit that the applicant has final approval authority on all payments, and on all approval of authority for construction work done by the business. The only way for a qualifying agent of a business to eliminate responsibility for the financial matters of the business is for there also to be an approved Financial Responsible Officer. When there is a Financial Responsible Officer for the business, the qualifying agent is relieved from all financial responsibilities.

There may also be a “Secondary Qualifying Agent” for the business. The Secondary Qualifying Agent is not responsible for the supervision of financial matters. The Secondary Qualifying Agent is only responsible for supervising field work at sites where he pulled the permit and for any other work for which he accepts responsibility.   

Business organizations must keep in mind that if its qualifying agent terminates his affiliation with the business, the business cannot engage in further contracting until it obtains a new qualifying agent. The business is not the holder of the license and therefore cannot act as a contractor without a qualifier.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

If a contractor is licensed, bonded and insured many owners will assume this is adequate protection to proceed with a construction project. That depends on your definition of adequate. Make no mistake, the importance of hiring a licensed, bonded and insured contractor cannot be understated, but be aware of the basic definitions of these terms and their limitations. 
 
First, the hiring of a licensed contractor should give piece of mind that your contractor has a certain level of competency. However, make sure you verify that license with the Department of Business and Professional Regulation's website, as some licenses may have expired.  Other background information is also available from the DBPR, such as how long this license has existed, and whether license complaints have been filed against them.  
 
Next, what really is a bonded contractor? It depends on the type of bond. A bond is essentially an insurance policy guaranteeing completion of the contractor's work. As an owner you should discuss the specific types of bonding protection offered by your contractor. A payment bond can exempt an owner's property from liens and ensure proper payments to subcontractors in compliance with the law, where a performance bond guarantees completion (performance) of the project in the event of a contractor default. 
 
Finally, an "insured" contractor likely only means your contractor carries a liability policy, often known as a Commercial General Liability (CGL) policy. While this type of policy is crucial for insuring against damages to injured persons or damaged property during an unfortunate occurrence in construction, it does not act as protection coverage to complete the actual work if the contractor does not.  A contractor's work is generally excluded as coverage under a CGL policy, but it is possible and recommended to negotiate other supplements to the coverage (additional endorsements) before a project begins, which may protect an owner in a number of ways. 
 
In the end, an ounce of protection is worth a pound of cure, so before entering into any construction agreement an owner should be sure to fully read and understand any and all construction agreements  and know your rights related to a construction project.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Avoiding common bidding mistakes may be the difference between having your bid rejected, and the award of a lucrative public contract. In our prior posting, we outlined five of what we have described as the "top ten" common bidding mistakes. The following are additional issues to watch out for when preparing a bid for a public agency in Florida.

Your bid must be full and complete. Often times, a solicitation may require bidders to gather information or support well above and beyond simply providing a price. Careful attention should be paid to whether the bid terms have such requirements. For example, the solicitation may require financial statements or narratives relative to prior experience, and which reflect an ability to perform the project. Further, the advertised terms and conditions may not provide blank forms for such information. Thus, preparing the additional information in a form and with the content required by the solicitation is critical.

Next, the terms and conditions of the solicitation may require that you bid alternates. The public agency may not know before receiving bids whether it can complete an entire job within budget. In these situations, agencies may require that bidders provide a base bid for the portion of the project that they agency feels is the core of the project, while requiring alternate pricing for additional portions of the project. This way, the agency can determine how much of the project it can afford to award. If required, it is imperative that you provide a bid as to any such alternatives, even if the agency may not ultimately award the work.

Additionally, if the terms of the solicitations are not clear, seek a clarification. There may be strict deadlines to seek clarification and to give the agency the opportunity to issue an addendum. Further, if the specifications are vague or lack reasonable definitiveness, then you may have to consider a specification protest. Depending upon the particular regulations for the agency, specification challenges may be due within days of the initial advertisement.

Another common mistake involves identification of the business entity which is submitting the bid. Depending upon the corporate structure or other business relationships of the persons or entities that are going to bid, the bid should clearly identify the entity which is offering to perform the work. Bear in mind that this entity must also meet all of the qualifications, and license requirements to be legally qualified to perform the work.

Finally, the solicitation may require disclosure of subcontractors, and their qualifications. Failure to provide this information could impact the agencies' ability to evaluate your bid, and result in a rejection.

In these tough times, there will be significant competition for public work. This also means that public agencies and competitors will be carefully combing through bids to weed out and/or challenge awards to non-responsive bidders. By avoiding common mistakes, you stand the best chance to stay in the running for an award.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Downsizing of personnel is an unfortunate reality in the current economy. Most companies have already downsized and consolidated less important positions, but I’m starting to see more companies having to go to the next step and release some of their construction qualifiers. If you find yourself doing so as well, pay close attention to the requirements and ramifications under the Licensing Code.

First, make sure you are retaining at least one licensed contractor who can qualify your company. Second, both you and the released qualifier must notify the Construction Industry Licensing Board of the loss of the qualifier. Pursuant to §489.119(3)(a) of the Florida Statutes, you will have 60 days in which to replace the qualifier, which requires filing the appropriate licensure applications with the CILB. This 60 day period can usually be extended an additional month upon a showing of good cause. Until you are newly qualified, you can complete work in progress or proceed with contracts for bids you have already submitted, but you can’t bid for new work.

You should also notify in writing all building departments from which open permits have been issued under the qualifier’s license.

• Email This
• Print
• Comments
• Trackbacks
• Share Link