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Vetting the vendorLesson 9 of 27

Academy/Procurement, Bids & Contracts

Contractor licenses

A license check done once during vetting is not the same as a license check done at signing.

A contractor's license is not something you check once during vetting and forget. Verify status, classification, expiration, bond, and disciplinary history with your state's licensing authority again near signing and again before work starts, since a license can lapse or be disciplined in between. An unverifiable or lapsed license is a stop sign.

01

A license check is a moment, not a habit

Most boards treat a contractor's license like a box to tick during vetting: look it up once, move on. License verification guidance describes it differently: as a status check performed close to signing, repeated on the day the contract is signed, and again before work actually begins.

A license that was clean when you shortlisted the vendor three weeks ago can lapse, get suspended, or pick up a disciplinary action before the first truck shows up. A stale check is functionally no check at all.

02

What "verified" actually covers

Confirming a license means more than seeing a name on a list. Pull the license status, the classification (does it cover the actual trade you're hiring for), the expiration date, the bond behind it, and any disciplinary history, directly from the state or local licensing authority, not from the vendor's own paperwork.

A contractor licensed for general carpentry is not automatically licensed for roofing or electrical work. A bond that lapsed last quarter tells you something a clean-looking certificate will not.

03

There is no single national rule to memorize

Which trades need a state license, what the license covers, and how to check it vary by state, by trade, and sometimes by city or county within the same state. Ask your own state's contractor licensing board for the rule that applies to your vendor, not this page. A license lookup directory can point you to the right agency.

An unverifiable license, one you cannot confirm through an official source, is reason enough to pause the contract. It is not a technicality to wave through because the bid looked good. Skipping the check is the kind of gap that undermines a board's fiduciary record of having actually investigated before deciding.

Check yourself

Answer before you read the explanation, recalling it is what makes it stick.

You verified a roofer's license during vetting six weeks ago, and the bid looked clean. Contract signing is tomorrow. What should you do about the license before signing?

A landscaping contractor's certificate looks fine, but the classification only covers "general landscaping," and you're hiring them to install a retaining wall. What does this classification gap mean?

You call the state licensing board and cannot confirm the electrician's license is real or current. The bid was the lowest of three. What should the board do?

Sources

Procurement, Bids & Contracts

Next, check what insurance paperwork should sit alongside that verified license before you sign: insurance requirements.

Which trades require a state license, what a license classification actually covers, and how to verify status all vary by state, by trade, and sometimes by locality within the same state.