For anyone who has tried to obtain a contractors license in the State of Hawaii, you are already aware that the process can be frustrating and lengthy. There are a number of reasons why the process can take months, and in many cases over a year, to be concluded, and this post aims to identify why that is and what you as an aspiring contractor hoping to start bidding for and performing work legally in this state, can do to try to minimize delay.
1. The CLB only meets once a month, and not in December.
No matter what you have turned in for consideration, and what your exigencies may be, the contractors license board considers pending license applications once a month, and does not meet in December. The license application committee likewise meets once a month, and after they meet, they put together recommendations for pending applications. Some (few) are recommended for approval to move past the application stage and to the testing stage, some are denied (usually this is after a very long process of prior reviews and deferrals), and the overwhelming majority are deferred. A deferral almost always means your application is missing some information needed for evaluation. After the committee meeting, licensees are sent a letter informing them that their application has been recommended for deferred and why. There is usually a list of information that is missing or questioned, such as a missing financial statement, a nonconforming financial statement, a nonconforming credit report, a missing credit report, or other missing information. This deferral letter will not be sent out for at least a week. This means an applicant will usually receive the letter about ten days after the application committee meeting. If the applicant were to turn around and send the information that very day, it would still have to be re-reviewed by the application committee.
The difficulty with this is that all paperwork received by the license office takes up to 20 business days to be processed. So, an applicant hoping to have its license considered at the end of the month by the Board, will never be able to do so, because its license must first pass the application committee. If it turns in missing materials for the application committee’s review, the earliest possible date for such review would be the following month. If the applicant did not receive the deferral letter in time, noting what materials are needed for further review, or if the applicant does not get the request materials in immediately, then it will likely be another month before the committee will consider the missing materials. Because it is rare for the committee to pass any license application upon first review, and if you are an aspiring contractor and you are relying upon mail notification of the status of your license, expect to be delayed for months.
SUGGESTION: Assign someone to the license application process, and have them follow up immediately and consistently after the committee meeting. Most of the time when you call the number to the license board, you will get someone who dos not know the current status of your license. I have repeatedly been told that once an application goes to the committee, the intake folks who answer the phone will not have any useful information about any missing records. There is no phone number to reach any member of the committee. Contractors can only email the license board, and presumably the board is inundated with emails, such that those emails can take weeks to be answered. However, even a belated email is better than waiting for a letter to arrive in a mailbox. If you follow up , and follow up consistently, you will save time. Likewise, if there is anything missing from your application, if you turn that around and respond immediately, you will have a much greater advantage over the applicant who takes more time providing missing information — every day lost is a risk that you have missed the window for reconsideration by the committee.
2. The CLB is extremely strict about paperwork — any deviation will likely result in a deferral
Many applicants who apply for licenses do not read the fine print of the license application forms provided online, and find their applications denied by the license committee. For example, the application form calls for credit reports of contractor applicants or if the applicant is an entity, the officers of the entity. The CLB will review DCCA filings to find out who your entity is and who the officers are, and if there are missing credit reports, will defer an entire application because of that. The CLB only wants to see credit reports from certain large credit reporting agencies. The reports cannot be summaries. You may have a credit score in the 800’s, but if your credit report is a summary or from an unrecognized reporting agency, you will be rejected. Likewise, the timing of the report is strict. The report must go back at least five years, and it must show a payment history going back five years. This means even if your credit score is in the 800’s, and even if the report recounts your history for the last 10 years, the CLB wants to see a revolving credit monthly payment history to see if you ever had a late payment, for at least 3-5 years. If you did have a late payment, the CLB may well hold up your license to ask about it. If one officer has an unpaid utility bill that he did not know of dating back 15 years, you will either have to pay it or provide a detailed explanation about it, or your entire entity’s license may well be held up. In other words, the CLB application committee will scrutinize your credit reports for conformity and for any suggestion of a credit issue, so applicants are advised to do so as well. This is just the example of credit reports — every piece of paper submitted will also be subjected to this type of review. Any anomaly will result in a second, third, or fourth deferral, and if an applicant is simply waiting for mail notice, each deferral will result in at least a month’s lost time.
SUGGESTION: Again, assign someone to review your submissions. It is almost impossible to try to envision every objection the committee will have to a license application, but at least some of the obvious ones can be caught. Many companies do not want to look at their officer’s credit reports because of privacy concerns. This may well be an issue, but the committee will. If the report is not examined in detail, and every issue addressed, you will have lost another month because your license will be deferred again. This is just one example of the types of issues faced by applicants who are typically not expecting the level of scrutiny applied to each of the submissions they make. It is also very helpful to have a local person able to walk materials to the licensing division instead of sending them by mail — hand delivery creates accountability on both sides. Make sure when you do so, you keep a copy of your submission (and ask it to be stamped by the license office) so that you have proof of your submission when you turn it in.
3. Experience requirements are hard to meet
The CLB requires 48 months of experience in the license scope you are seeking. If you want to be a general contractor with a “B” license, you have to show that you performed or directly supervised crews performing “B” work for 48 months. Many applicants think that they have been working in construction for years, and they have experienced contractors writing their experience certifications, so they will have no problem with this part of the application. Then they find themselves deferred or rejected over and over again because the board does not credit their past experience towards a license. There are a number of reasons for this. First, 48 months means 48 months. This means even if a job lasted for 2 years, if you only spent four months on actual construction of a structure for the protection of people or things, then you only get four months towards a “B” license. Or if you are going for a general engineering “A” license, and the job lasted 2 years, but you were only excavating for three months, then you only get three months towards an “A”. Second, when the board says direct supervision, they mean it. The board does not credit time spent overseeing work from a home office. An applicant will have the best chance of getting a license if the applicant is already licensed — either in another state or in another context, and performed work as a licensed contractor. Other than that, the applicants who are least likely to be questioned about direct experience are foremen and superintendents. Project engineers who have been running jobs for years, but are not licensed elsewhere and are not supervising self-performed work, routinely run into issues meeting Hawaii’s experience requirements. This is questionable reasoning, since the public is best served by having licensed contractors who not only know construction but also understand, present, and are able to work with contracts, invoices, and such, but nevertheless it is a fact of the current licensing application process.
SUGGESTION: The grid required by the license board to show experience should accurately reflect everything an applicant has done in construction, and should be filled out to show direct supervision as well as work performed while a licensed contractor, even in another state. The grid should reflect exact months performing types of work, and spell out that work in detail so that there can be no question that the scope of work covered by the license was included . Applicants should look at how the board (through the administrative rules) defines the scope of each license and identify what work they have performed within that scope and for how long. Applicants with degrees relating to their work (such as engineering degrees) should turn in proof of same so that they receive credit for their knowledge and experience in that field as well.
The license board is charged with protecting the public from uncreditworthy or insufficiently experienced contractors. They take that charge very seriously and as a result, the process of getting a license is often frustrating and protracted. The addition of Covid 19 disruption to staffing and the ability to meet in person, has added to the time for review and made the process even more frustrating and lengthy. While applicants cannot change these requirements or aid the insufficient staffing and resources available to process licenses, they can help themselves by trying to anticipate the common pitfalls of all license applications and then staying on top of their license application to minimize these delays.