Award of Government Contracts in Tennessee To Unlicensed Contractors

B-125577: Oct 11, 1955

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This decision concerns the award of Government contracts in Tennessee to contractors who are not licensed in that state. Under Tennessee law, all contractors performing work directly for that owner on a project over $10,000 are required to secure a license as a general contractor from the State Board for Licensing General Contractors. The validity of such a license is conditional upon the contractor’s payment of this State privilege tax. Criminal penalties are imposed against contractors who operate under invalid licenses and against property owners or others who accept bids from unlicensed contractors.

It is alleged by the attorney that the Department of the Navy accepted bids from painting contractors who are not licensed by the State of Tennessee in connection with work on Government projects in Shelby County, and it spears to be the position of the Chapter that non-licensed contractors should not be permitted to bid on Government work in Tennessee.

GAO found that they are of the opinion that the obtaining of a general contractor’s licenses for performing Government work in Tennessee is a matter which must be settled between the local authorities and the contractor’s either by agreement or judicial determination.