PURPOSE
The Contractor is required by the contract documents to utilize a specified percentage of subcontractors on most Public Works projects. The Contractor is also required to list all subcontractors in its original bid that will be performing more than 1/2 of one-percent of the original contract bid amount submitted by the Contractor. Upon award of the contract, the Contractor is required to receive approval from the Bureau of Contract Administration (BCA) of all subcontractors it intends to use on the project, regardless of the dollar amount of the work to be performed, and may not substitute a "bid listed" subcontractor without approval from BCA acting on behalf of the Board of Public Works.
The purpose of this procedure is to familiarize the CM and PM with the process for approval of subcontractors and subcontractor substitutions.
REFERENCES
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RESPONSIBILITIES
BCA Special Research and Investigation Section (SRI): SRI is the only entity authorized to approve subcontractors and subcontractor substitutions.
Lead Inspector (LI): It is the responsibility of the LI to ensure that all subcontractors working on the project have been approved by SRI prior to beginning work. The LI is provided an updated list each time a subcontractor is approved and/or a subcontractor substitution is approved. The LI should ensure that this list is up to date. If a subcontractor begins work on the project and the LI has no record of approval, the LI should call SRI to find out if the subcontractor has been approved. If the subcontractor has not been approved, the LI shall issue a Notice of Non-Compliance informing the Contractor it is allowing the subcontractor to work at its own risk and that all work performed by the unapproved subcontractor is subject to rejection. The LI should also inform the Contractor of the requirement to get approval from BCA prior to utilizing any subcontractor on the project. It is up to the BCA’s Division Manager to determine whether to suspend work being performed by the unapproved subcontractor.
Construction Manager (CM): The CM is provided a list of approved subcontractors by the LI upon request.
PROCEDURE
Subcontractor Approval
The Contractor is required to submit for approval all subcontractors it intends to utilize on the project, regardless of the dollar amount of the work to be performed. Bid listed subcontractors are not automatically approved for work on the project at award of the project.
The Contractor shall submit all required information to the SRI section of BCA prior to any subcontractor working on the project. SRI will review the information provided and determine the acceptability of each subcontractor. If the Contractor fails to provide any of the required information, the request for approval will be denied until such time as the Contractor provides the required information. SRI will determine the following:
If the requested subcontractor has the proper California State Contractor's license to perform the requested work.
If the requested subcontractor has a valid City of Los Angeles Business Tax Receipt Certification.
If the requested subcontractor has valid insurance.
If the subcontractor has been banned from working in the City of Los Angeles under the Contractor Responsibility Ordinance.
Upon determining that the requested subcontractor meets all necessary requirements to work on the project, SRI will issue a letter to the Contractor approving each subcontractor. The LI will be copied on the letter sent to the Contractor and may provide each approval letter to the CM upon request.
Vendors, Suppliers and Manufacturers
Although there is no approval requirement for vendors, suppliers or manufacturers, BCA is responsible for determining whether the entity proposed to be used by the Contractor is a subcontractor or a vendor, supplier or manufacturer. BCA will notify the Contractor if the proposed entity is determined to be a subcontractor and request that the required approval be obtained.
Subcontractor Substitution
Should the Contractor wish to substitute a subcontractor that is bid listed in the original bid or has been approved after award of the project, the Contractor shall make a request to SRI for substitution. The contractor shall provide all required information on the substituting subcontractor as well as a letter of withdrawal from the bid-listed or approved subcontractor.
If the Contractor does not have a withdrawal letter and the original subcontractor protests the substitution, SRI will send a certified letter to the original subcontractor informing them that a substitution request has been made. The original subcontractor shall have five days after receipt of the certified letter to inform SRI of the reason(s) it does not wish to be substituted. Upon receipt of the return information, SRI will schedule a hearing with the Board of Public Works for determination of the substitution request. If there is no protest to the proposed substitution, SRI will review the substituting subcontractor as it would an original approval request and issue a letter either approving or denying the substitution. If SRI approves the substitution, the substituting subcontractor may immediately begin work.
It should be noted that formal approval of every substitution is made in an open session of the Board of Public Works based on the recommendation of BCA. However, due to the lengthy time to get approved substitutions on the Board Agenda, BCA is given authority by the Board to act on its behalf and approve substitutions in advance. This allows substitute subcontractors to begin work immediately and reduces the potential for project delays.
RELATED PROCEDURES
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LINKS / ATTACHMENTS
Links
BOE Master Specifications, General Conditions, Article 00311 – Subcontractors and Sub-subcontractors
Attachments
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Comments