As a multi-site Facility Manager, hiring the right HVAC contractor can be a daunting task. Today, a trend toward hiring national brokers or total facility solutions is becoming a common practice. While it seems like a simple one stop solution there can be many pitfalls and hidden liabilities to companies who operate in multiple states. To protect you and your organization we are looking at some important questions that you may want to ask prior to selecting an HVAC broker or service provider.
It is important to note that these brokers depend solely upon a network of subcontractors to perform the actual HVAC work. It is also assumed in most cases by the customer that these subcontractors carry the proper permits, licenses and insurance coverages which in many instances may not be the case.
As a facility manager you want to ensure that you are dealing with the most reputable people and that you are covered legally to limit your exposure while still getting the job done in a timely cost effective manner.
The following is a list of some necessary questions you may want to ask your potential HVAC service provider prior to entering an agreement.
Are you a licensed contractor in each state that you will be performing work for us?
It is extremely important to make sure your HVAC contractor is properly licensed in all of the states that they will be performing work for you.
Most states now require the professional licensing of contractors who are performing HVAC work within each state. In many states licensing authorities require bidders to have a license prior to submitting a bid or any type of negotiation. Unfortunately many of these service providers attempt to rely solely on their subcontractors to have the proper licensing which is in many cases does not exist. The simple truth is that many of these brokers are unaware that they need a general contractors license to do business within individual states, however “ignorance of the law excuses no one”.
To protect yourself simply require the broker to provide a list of state license numbers or a copy of these state licenses. These numbers are easily verifiable online through the individual states licensing and regulation web sites.
This is a simple step to take, and a quick safeguard against a possible liability for your company. If these brokers are operating without the proper state contractors license this should be an immediate red flag.
Why be concerned? If your unlicensed broker hires a the contractor that is unlicensed then his workers can be presumed as “your employees” as shown below in the following excerpt from Plaintiff Magazine.
Under Labor Code section 2750.5, an unlicensed contractor and their employees are pre sumed to be the employee of the hirer; this will eliminate the owner’s defense that he is not liable for the conduct of the independent contractor. Moreover, if the owner and/or general contractor did not provide workers’ compensation insurance for the injured subcontractor, the injured worker can bring a civil suit against the employer. (Lab. Code, §3706) The employer is presumed negligent; the defenses of contributory negligence and assumption of the risk are not available; and a judgment includes attorney’s fees. (Lab. Code, §§ 3708, 3709.)
Licensing laws are designed to protect the consumer and the public, how ever it is your responsibility to make sure that the company that you enter a contract with has the proper licensing for each state, if not you can be found negligent.
Source: Plantiff Magazine; William Veen; June 2010 – William Veen.