Why Every Contractor Should Create A Qualifier Contingency Plan – Construction & Planning

Obtaining a contractor’s license can be a complex,
patience-testing process, which is why so many large construction
companies are utilizing several qualifiers to maintain licensure
across multi-state territories. There’s no law demanding that
contractors only work in their home state, which is why industry
leaders can be found working on projects all throughout the United
States and internationally.

What Is a Qualifier?

A qualifier is an entity that represents the work of a business.
In the construction industry, this simply means a licensed
contractor that can perform work in a state under the
“umbrella” of your business. This is necessary because
only individuals – not companies – can acquire a
contractor’s license. Therefore, companies that want to expand
their operations into multiple states must have a qualifier in each
state to ensure that they are working legally.

The Problem with Qualifiers

According to Construction Business Owner, “it’s not
uncommon for a company to have a single qualifier in a dozen states
or more.” This can create pervasive issues for a firm if a
qualifier decides to pack up and leave. Typically, it will have one
or two months to select a licensed replacement. If a licensed
professional isn’t available, it may need to elect a new
individual from the business to obtain a contractor’s license.
Unfortunately, this process can be time-consuming, which means a
business could lose out on valuable contracting opportunities in
the meantime.

The Solution: A Qualifier Contingency Plan

To help minimize the chaos of a departing qualifier, business
owners can employ a qualifier contingency plan — a simple,
relatively inexpensive solution that can help protect business
interests. A qualifier contingency plan will help businesses build
a list of “next-in-line” qualifiers.

Consider Multistate Licensing Needs

Before a business can craft a qualifier contingency plan, it
must reflect on the states in which it is currently operating and
those that it may expand to in the future. Start obtaining the
proper licensing two years before breaking ground on any projects
in a new state. During that time, research licensing
classifications, requirements, and timelines. Some states also have
licensing reciprocity agreements that can be utilized to grow a
business’s overall territory while bypassing certain licensing
requirements.

Audit Active Qualifiers

With a clearer picture of qualifier needs, next take a look at
the business’s existing team of qualifiers. Determine which
states are most vulnerable if a qualifier leaves. Then decide which
members of the business team can step up if needed. This may
require the company to pay for another employee to obtain a
contractor’s license, and not every employee is cut out for
life as a contractor, so these individuals must be chosen wisely.
Experienced construction professionals are usually a safe bet.
Ideally, a business should have at least two backup qualifiers for
every single state.

Address Any Weaknesses

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.

Develop a Qualifier Contingency Plan

Once the above steps are complete, it’s time to create the
qualifier contingency plan. It should be based on the results of
your evaluation, addressing the following:

• Strength of backups




• Qualifications of 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

When a qualifier leaves, it’s like a boat with a leak that
needs to be plugged. If a business already has the perfect piece in
place to plug the leak, it will continue to float and its journey
will be uninterrupted.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.