Contractor licensing schemes pose a dilemma. Construction contracts are generally entered into by corporations and other forms of business associations. But, corporations don’t go to school, sit for exams or obtain licenses. That is the role of individuals. Consequently, the licensed individual responsible for obtaining a building permit and supervising the construction has no contractual relationship with the project owner.

In Florida, a licensed “qualifying agent” was recently sued individually for negligently allowing work that did not comply with the building code. The agent escaped without liability. The court expressed frustration that individuals could lend their name and license to a corporation that could disappear as soon as problems arise, leaving owners without recourse. But, the court said it was bound by state statute and a ruling from the  state’s highest court.

Other cases this week address a charter school’s obligation to comply with state bidding statutes and the need for price realism analysis on a fixed-price procurement. The charter school was obligated to return federal grant money because it violated the terms of the grant agreement and the state competitive bid requirement. And, price realism analysis was not required. Only the contractor, not the government, bore the risk of an unrealistically low price on a fixed-price contract.