How Should You Handle An Unlicensed Competitor Bidding On The Same Job?

Do you take the high road and express to the customer about state law and leave it at that or report them to the state board?

This was raised in our sales webinar yesterday.

How would you handle this?

All's fair in love and war. They're not licensed, sucks to be them.

On public bids, rarely did I see customers willing to accept someone who didn't have all the credentials specified, simply because they knew other contractors would report it. In the rare cases it did happen, I would never hesitate to do everything in my power to get that contractor thrown out. If you're going to go through the trouble of the bidding process, and you don't follow your own rules, nor the laws of the municipality, you deserve everything coming to you.

I believe the question is actually do you tell only the customer or the customer and the state board. It would seem that Ethan and A are choosing the latter, (clarification welcome), but that choice should not be seen as one just affecting the unlicensed contractor.

Often times the Customer may know or does not care to know that a contractor is missing some certification, or is failing in regards to some qualification. Still they want to move forward with the unlicensed contractor, sometimes because of assurances given, sometimes not.

In that case doing 'everything in your power' may be viewed as an action against the customer as well as the unlicensed party. Of course it is still your right, but is it always the right thing to do?


I hate public bids, and we avoided them whenever possible. But if an entity is going to force me into this set of rules, then not follow them themselves, again: they deserve everything coming to them. It is an action against the customer.

Is a customer who would do so a customer I'd actually want? Probably not. But it's only by calling it out that it's ever going to change and others will be discouraged from doing the same.

In the bid process there are no friends. It's not a sales process. It's "how do I get this work done for the lowest amount of money, from someone who (should be) competent?"

Before you do anything, you need to think about what can happen or possibly go wrong. Could your name be thrown in the mud or be part of a future media poop storm? A PR Backlash or End Users who lose your trust?

Example from another Industry that recently happened in WI.

Who would have guessed that elevator inspectors could be so cutthroat? I will never look at a elevator certificate the same again...

I assume that you can report someone to the state board without revealing ones own identity, though I'm not sure that's true everywhere

What about a third option, letting the unlicensed know that you know, and intend to report unless they drop out? Doing him a 'favor' could be viewed as extortion...

We don't have CCTV licensing here in Ohio, so I am unsure how I would deal with it.

I can't speak for every state, but in NC, the State Licensing Board is not empowerd to conduct investigations without someone first filing a complaint. This is very troubling to me for some reason. The people who are tasked with enforcing the law can't unless someone complains, officially. You cannot file an anonymous complaint. One must go on record and present verifiable evidence to investigators before they can do anything. I see this everywhere. On Craigslist, on-line, on vehicles, everywhere I go. I could find 5 or 6 a week easy (thou shalt remember the sabbath and keep it holy). If I can see it, I am sure investigators can too.

I agree with Ethan across the board on this one. I too dispise public bids and try to steer clear. But when necessary, part of our process is to verify the credentials of every company on the bid list.

Doesn’t the phrase “We sub contract out all licensed work” kind of kill any argument that another integrator may bring in front of a board?

Not here no. You may not sell, install, service NOR consult without a license.

Does the OP refer only to public, sealed bids?

What about when just submitting a proposal for work, if you know a competitor is also doing the same? And you believe them to be lacking the necessary certifications...

Tell the Customer, State or the Competitor?

Immediately after a natural disaster the streets flood with rats of all types snatching insurance cheese from unsuspecting clients who are not contractors and don't understand the benefit of hiring a licensed contractor or the risk of hiring an unlicensed person. When licensing is required sometimes it appears as though you can still get away with it even when reported.

The good guys try to do it all correct and the dishonest wait to get caught.

I learned a lesson about contracting on military bases where the bid RFP outlines all TE licenses required to scare off the unwitting. Only to learn that the unlicensed learned that military bases are on Federal property and state laws and licenses don't apply. One electrician kept winning bids after he lost his license and they couldn't prevent him.

Alarm companies are licensed by many agencies in different places and I was at a meeting where Arizona is considering eliminating background checks as a nuisance to job creation! I pity the customers.

Mark, That does not make sense at all. Are you saying that every general contractor were you at has to be licensed in every trade to bid on a project?

Certainly not. Perhaps I am missing your point. The point I was try to make is that in NC, if you are conducting security work of any kind, be it consultation, sales, installation or service you must carry a security license from the State Alarm Board. It makes no difference if you are bidding as the prime on a security only project or as a sub on a larger project. If I read your response correctly, your contention is that an electrical contractor (for instance) can bid a security only project, sub out the security installation and meet the letter of the law and negate any complaint the alarm board may have against them. Not true. That principal is in violation of the letter and spirit of the law. A GC can legally make that claim obviously because he has subcontracted a portion of a larger contract to a licensed security contractor. He has met his legal obligation.

If a contractor bids and sells a security only project, as a prime, they had better have a security license. Not my rule, state law.

Pardon Mark, but you have been summoned to another thread. :)

Is there more to it than This? Because reading the laws it seems that the only time cameras are even mentioned is if they are specific to "cameras used to detect burglary" and "monitored access control"

Its also specific "No person, firm, association, corporation, or department or division of a firm, association or corporation, shall engage in or hold itself out as engaging in an alarm systems business"

Why can't a "Security Only" project have a prime, and say... 3 subs. IT / Electrical / Security. If each of the 3 primes hold their own required certifications, what is the problem?

"No person, firm, association, corporation, or department or division of a firm, association or corporation, shall engage in or hold itself out as engaging in an alarm systems business without first being licensed in accordance with this Chapter. "

Now I am no lawyer, but it would seem to me that if a GC bids a security only project without a license from the Alarm Board, they are in violation of the law.

For purposes of this Chapter an "alarm systems business" is defined as any person, firm, association or corporation that does any of the following:

(1) Sells or attempts to sell an alarm system device by engaging in a personal solicitation at a residence or business to advise, design, or consult on specific types and specific locations of alarm system devices.

(2) Installs, services, monitors, or responds to electrical, electronic or mechanical alarm signal devices, burglar alarms, monitored access control, or cameras used to detect burglary, breaking or entering, intrusion, shoplifting, pilferage, theft, or other unauthorized or illegal activity.

Not trying to come off as unyielding, but that seems pretty inclusive and direct to me.

I went to a pre-bid about a month ago. Lots of contractors where there and it was a big job (municipal). At the end, the city representative said out loud, "if you are going to bid the job, you had better have your security license".

Manufacturers are not included unless they visit someone's home, (they can visit a business), but they cannot make an agreement to sell or install.

End users are given a pass, and lock smith's may install Access Control as long as it is not monitored by, or cause an alarm signal to be sent to a central station.

Similar to California. I haven't stayed up on it lately but I can imaging trunk slammers stating the camera isn't "detecting" anything, just recording it. Even then, anything over a few hundred dollars exceeds the "handyman" exemption and still requires at a minimum a low voltage contractors license.

I can imaging trunk slammers stating the camera isn't "detecting" anything, just recording it.

I imagine they would end up in the 'slammer'.

The law is specific (In the NC Case) as to what the camera needs to be detecting.... "cameras used to detect burglary" Not just open end detecting...

You are only reading part of it C. "Used to detect burglary AND breaking or entering AND intrusion AND shoplifting AND pilferage AND theft AND other unauthorized or illegal activity".

About the only things that I can think of that do not fit into one of those categories is manufacturing or entertainment; and manufacturing can be stretched if you wanted to. The catch-all is "unauthorized".

C, looking at several other states laws, it would appear that N.C.'s statute is indeed a bit more stringent with regard to the contractor license than other ones I saw. It does seem to require the licensee be an actual employee of the bidding firm before the bid is placed. Furthermore N.C. has laws designed to further restrict any games that might played between companies trying to 'share' licenses, by requiring registration of licensees when changing employment.

Texas on the other hand, allows one to name a licensed subcontractor from another firm in the bid. But I didn't find any states that had an alarm license req, that didn't want to have at least the name upfront of the licensed party.

Of course that doesn't mean they're aren't any. Is there a state you know of that allows unnamed subbing of licensed work, for single trade bids?