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License ‘Grace Period’ Probed

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The state commission that oversees construction regulation in New Mexico has ordered an investigation into how an out-of-state contractor got permission to temporarily work on a multimillion-dollar state university project without the proper license.

“We opened up a Pandora’s box,” Construction Industries Commissioner Don Kaufman said during a meeting of the group Wednesday.

Garney Construction, a national firm with western offices in Phoenix, was the low bidder on a $3.1 million contract for upgrades to piping and equipment to deliver chilled water to the New Mexico State University campus in Las Cruces.

The firm had a license to do site utility work, but not one that covered the mechanical requirements of the job.

Once the problem was discovered, the state Construction Industries Division allowed Garney to continue the work under the NMSU contract and gave the firm 30 days to get the proper state mechanical license.

The decision has raised concerns with commissioners and competitors.

Commissioner Kevin Yearout told the Journal he wants to find out why CID gave “the green light for 30 days” without the firm having the mechanical license.

“This is a significant project and a significant amount of money being spent by the state of New Mexico and we need to know that it’s being done correctly,” Yearout said.

Garney officials in Phoenix could not be reached for comment.

CID Deputy Director Land Clark, through spokesman S.U. Mahesh, said in an email that the university asked that Garney be allowed to work without the proper license “to accommodate the time frame when (university) classes were not in session.”

Yearout, president of Yearout Mechanical of Albuquerque, said he had never heard of a “grace period” for license compliance.

“The scary part about that is what precedent are you setting…when you allow a contractor to work outside the scope of his license, and you allow him to go get a license after the fact and in the meantime he’s doing work he’s not licensed for for 30 or 40 days,” Yearout said.

The commission, which is appointed by the governor, took up the issue briefly at its regular meeting in Albuquerque on Wednesday and asked CID managers to report back.

Clark told the commission the situation was “somewhat unique,” adding, “We historically have always considered extenuating circumstances when it comes to licensing.”

CID initially issued a permit for the work June 21, but later discovered the contractor did not have the required mechanical license to do the piping work.

Ultimately, CID gave Garney up to 30 days to get the proper license, which Garney obtained effective July 22.

A representative for more than 40 New Mexico mechanical contractors says the special treatment is unfair to companies that abide by the rules.

Steve Crespin,of the Mechanical Contractors Association of New Mexico told commissioners the action was illegal, and he later told the Journal that state law also requires a contractor have the proper licenses in order to bid on a project.

“They should have been told they were not allowed onto the property and that portion of the work” had to be performed by a company with the proper license, Crespin said.

Crespin, a former CID commissioner and CID bureau chief under Gov. Gary Johnson, said he understands agency inspectors initially caught the problem and wouldn’t permit work to continue, but “CID higher-ups or somebody” overruled them.

In an email response to Journal questions, Mahesh wouldn’t identify who at the CID granted NMSU’s request, adding, “All actions taken by CID personnel are essentially made by the division as a whole, not individuals.”

“CID is in the process of taking administrative action against Garny (sic) Construction for working beyond the scope of their original license,” the email states. A first offense is a $500 fine. Mahesh said it is Garney’s first offense. He added that neither the public nor the “customer” were negatively affected.

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