The Pending A-23 Application and the Borrowed License
Marco has worked seven years as an asbestos abatement supervisor for a Nevada A-23 contractor. He incorporates Desert Shield Environmental LLC, leases a storage yard, and has $22,000 in net worth, a used negative-air machine, and no office staff. He applies for an A-23 license with a requested monetary limit of $750,000. While the application is pending, he submits a $410,000 bid to a rural school district and signs a letter of intent. He plans to "borrow" his cousin's A-23 license-his cousin will be listed as qualifying party but will not work on the jobs-until Marco passes the trade exam and is approved. The Board requests a financial statement and proof of experience. Marco's exam is scheduled in six weeks; the school wants to award in ten days.
1. Can Marco bid and sign the school contract before his license is issued? What are the consequences?
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No. Nevada law prohibits acting in the capacity of a contractor without a license, and that includes offering to contract and submitting a bid, not just starting work. A letter of intent can also be treated as contracting if it commits him to the project. If he signs before licensure, the contract is exposed to being unenforceable by him, and he faces Board discipline and possible civil exposure. The school district may also reject the bid as nonresponsive. The fact that his application is pending does not create a temporary license. Marco should withdraw the bid or clarify that it is submitted by a licensed entity, and wait until the Board issues the license before signing. If the school cannot wait, he should pursue the work as a subcontractor to an existing licensed A-23 contractor rather than as the prime.
2. Is the cousin arrangement permissible, and how will the Board evaluate the $750,000 limit?
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The cousin arrangement is not permissible. A qualifying party must actually be responsible for the licensee's contracting operations and must meet the experience and examination requirements. Listing a relative who will not work on the jobs is a nominal qualification, and the license is not transferable or loanable. Both Marco and his cousin could face discipline for a sham arrangement. On the monetary limit, the Board sets the limit based on the applicant's financial responsibility, not simply on the amount requested. A $22,000 net worth, a used machine, and no office staff will not support a $750,000 limit. The Board will review the financial statement, working capital, credit, and the cost of the proposed work. Marco should request a realistic limit, build documented net worth or obtain a line of credit, and submit a complete financial package. Starting with a lower limit and growing the license is better than overstating capacity.
3. What steps should Marco take to obtain a compliant license and still position himself for school work?
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He should complete the application process: document at least the required experience as an abatement supervisor, pass the trade and law exams, submit the required financial statement, obtain the contractor's license bond and insurance, and designate himself or another genuine qualifying party. He should ask the Board for a monetary limit he can actually support, not $750,000. Before licensure, he can market his company but cannot bid or contract. To position for the school job, he could partner with a licensed A-23 prime as a subcontractor, with a written agreement that clearly defines his scope and insurance. He should keep the LLC's finances separate, maintain records, and avoid any arrangement in which another person's license is used to obtain work. If he later wants a higher limit, he can submit updated financial statements and request an increase.