A client recently asked me to confirm when a joint venture must be licensed to bid and perform construction work. I explained that the answer depends on the name of the joint venture, where the work will be performed, and – depending on the state in which work is to be performed – the stage of construction.
Both Washington and Oregon generally require contractors to be registered or licensed to perform construction work in their respective states. RCW 18.27.020 requires every contractor to be registered with Washington’s Department of Labor and Industries to advertise, offer, bid, or perform any construction services in Washington. Similarly, ORS 701.021 requires every contractor to be licensed with Oregon’s Construction Contractor’s Board to offer, bid, or perform any construction services in Oregon.
In Washington, RCW 18.27.065 further provides:
A partnership or joint venture shall be deemed registered under this chapter if any one of the general partners or venturers whose name appears in the name under which the partnership or venture does business is registered.
As such, the key in Washington is simply that (1) one of the members of the joint venture be registered, and (2) that the member’s name appear in the name of the joint venture. There is no additional requirement that the joint venture itself be separately registered with the Department of Labor and Industries.
This is not the case in Oregon. In Oregon, ORS 701.021(1) provides that, unless exempt:
…a person or joint venture that undertakes, offers to undertake or submits a bid to do work as a contractor must have a current license issued by the Construction Contractors Board and possess an appropriate endorsement as provided in this section. For purposes of offering to undertake or submitting a bid to do work, a partnership or joint venture is licensed and endorsed if any partner or joint venturer whose name appears in the business name of the partnership or joint venture has a current license issued by the board and possesses the appropriate endorsement.
As such, in Oregon – the key distinction is the stage of construction. In Oregon, a joint venture can bid or offer to do the work, if (1) one of the members of the joint venture is currently licensed in Oregon, (2) that the member also possesses the appropriate endorsement; and (3) that the member’s name appears in name of the joint venture.
To actually perform any construction work, however, the joint venture itself must be independently licensed with the Construction Contractor’s Board and possess the appropriate endorsement.
For this reason, we typically recommend that if the joint venture is serious about performing construction work in Oregon, it should take steps to obtain its own license and necessary endorsement(s) at the time it is entering into its joint venture agreement to avoid any unnecessary delay between bid submission and commencement of work.
Additionally, the endorsement requirements depend on the type of construction to be performed. ORS 701.021(2) sets forth the endorsements for residential structures, ORS 701.021(3) sets forth the endorsements for small commercial structures, and ORS 701.021(4) sets forth the endorsements for large commercial structures.
If you have any licensure or construction contracting questions, please feel free to contact us.