22-9-204. Subcontractors exceeding $20,000 - Penalty.

(a) As a condition to performing construction work for and in the State of Arkansas, all prime contractors shall use no other subcontractors when the subcontractors' portion of the project is twenty thousand dollars ($20,000) or more, except those licensed by the Contractors Licensing Board and qualified in:

(1) Mechanical, indicative of heating, air conditioning, ventilation, and refrigeration;

(2) Plumbing;

(3) Electrical, indicative of wiring and illuminating fixtures; and

(4) Roofing and sheet metal work, indicative of roofing application.

(b)(1) In the event the prime contractor is qualified and licensed by the Contractors Licensing Board, he may use his own forces to perform those tasks listed in this section as subcontractors in one (1) or more of the trades listed.

(2)(A) A subcontractor, including the situation stated in subdivision (b)(1) of this section, may subcontract a portion of the listed work.

(B) However, a subcontractor is prohibited from subcontracting the work in its entirety.

(c)(1) When the prime contractor makes a definite decision regarding the subcontractors he intends to use, he shall place the name of each subcontractor in a blank space provided on the form of proposal of his bid.

(2) In the event that one (1) or more of the subcontractors named by the prime contractor in his successful bid thereafter refuses to perform his contract or offered contract, the prime contractor may substitute another subcontractor licensed by the Contractors Licensing Board after having obtained prior approval from the architect or engineer and the owner. Additional approval must be obtained from Arkansas State Building Services for capital improvement projects under its jurisdiction.

(d) The prime contractor shall submit written evidence that the substituted contractor is costing the same amount of money or less and, if costing less, that the savings will be deducted from the total contract of the prime contractor and rebated to the owner.

(e) It shall be mandatory that the mechanical, plumbing, electrical, roofing, and sheet metal subcontractors named on the form of proposal by the prime contractor awarded a contract under the provisions of this subchapter be given contracts by the prime contractor in keeping with their proposals to perform the items for which they were named.

(f)(1) It shall be a violation of this section for any prime contractor to submit a bid listing unlicensed contractors or to use unlicensed contractors on a public works project.

(2) It shall be a violation of this section for any subcontractor who is not licensed by the Contractors Licensing Board to contract to perform work on a public works project.

(3) Any contractor or subcontractor who, after notice and hearing, is found to have violated this section shall pay to Arkansas State Building Services a civil penalty of not less than two hundred fifty dollars ($250) nor more than five hundred dollars ($500) and may be suspended from bidding on future public works contracts for a term of not less than six (6) months nor more than twelve (12) months.

(4) All hearings and appeals under this section shall be pursuant to the provisions of the Arkansas Administrative Procedure Act, § 25-15-201 et seq. Arkansas State Building Services shall have the power to file suit in the Circuit Court of Pulaski County to obtain a judgment for the amount of any penalty not paid within thirty (30) days of service on the contractor of the order assessing the penalty.

(5) Penalties collected pursuant to this section shall be deposited in the Arkansas State Building Services Maintenance Fund.

History. Acts 1949, No. 159, § 3; 1957, No. 183, § 1; 1961, No. 477, § 1; 1983, No. 871, § 1; A.S.A. 1947, § 14-613; Acts 1987, No. 759, § 1; 1989, No. 936, § 1; 1991, No. 728, § 1; 1993, No. 645, § 1; 1999, No. 1250, § 1; 1999, No. 1496, § 1; 2001, No. 989, § 1.