Does your construction business have a qualifier contingency plan in place? Without one, you could find yourself barred from competing in certain territories when a qualifier leaves your company. Qualifiers play an important role in every large construction business, allowing the business to grow and take on new territories as they expand their operations.
In part one of this two-part series, an Orlando construction lawyer from Cotney Construction Law discussed the importance of creating a qualifier contingency plan to help manage multistate licensing. In this part, we will focus on four important steps that contractors should follow to ensure that they have a strong qualifier contingency plan in place to keep their business running smoothly on all cylinders.
Consider Your Multistate Licensing Needs
Before you can craft a qualifier contingency plan, you need to reflect on the states you are currently operating in and those that you wish to expand to in the future. You should start obtaining the proper licensing two years before you plan to break ground on any projects in a new state. During that time, you must also research licensing classifications, requirements, and timelines. Some states also have licensing reciprocity agreements that can be utilized to grow your overall territory while bypassing certain licensing requirements.
Audit Your Active Qualifiers
Once you have a clearer picture of your qualifier needs, you need to take a look at your existing team of qualifiers. Ask yourself: which states are most vulnerable if a qualifier leaves? Once you identify “high risk” states, it’s time to decide which members of your team can step up if needed. This may require you to pay for another employee to obtain their contractor’s license. Not every employee is cut out for life as a contractor, so you must choose wisely. Experienced construction professionals are usually a safe bet. Ideally, you will have at least two backup qualifiers for every single state you work in.
Address Your Weaknesses
If you don’t have a qualifier or a backup in a state you’re eyeing, you should create a plan for developing your business in this region. You should also begin to train backups for other states that currently have qualifiers but not backups. The key here is handling each state individually. Since construction law varies from state to state, you can’t afford to risk noncompliance.
Develop Your Qualifier Contingency Plan
After you complete all of the above steps, it’s time to create your qualifier contingency plan. Your plan should be based on the results of your evaluation. This plan should address the following:
- Strength of your backups
- Qualifications of your backups (try to maintain two backups per state)
- Employees with “qualifier potential”
- Steps for preparing new backups
- Size of territories relative to number of qualifiers
- Clearly outlined plan for dealing with absent qualifiers
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.