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TO BE PUBLISHED IN THE OFFICIAL REPORTS
 

OFFICE OF THE ATTORNEY GENERAL
 

State of California
 

DANIEL E. LUNGREN
 

Attorney General
 

OPINION : 

: No. 94-819 

of : 

: February 9, 1995 

DANIEL E. LUNGREN : 

Attorney General : 

: 

GREGORY GONOT : 

Deputy Attorney General : 

: 

The HONORABLE MILTON MARKS, MEMBER OF THE CALIFORNIA STATE 

SENATE, has requested an opinion on the following question: 

May a state or local agency contract with a private firm for construction project 

management services if all or part of such services are to be performed other than under the direction 

and control of a licensed architect, registered engineer, or licensed general contractor? 

CONCLUSION 

A state or local agency may not contract with a private firm for construction project 

management services if all or part of such services are to be performed other than under the direction 

and control of a licensed architect, registered engineer, or licensed contractor. 

ANALYSIS 

A district, city, county, or state agency which puts a construction project out to bid will 

often separately retain a private firm to assist it in such matters as bid evaluation, project design review 

and evaluation, construction mobilization and supervision, project scheduling, cost-benefit analysis, 

claims review and negotiation, and general management and administration of the project. These 

endeavors are commonly referred to as construction project management services. 

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While all construction project management services may be provided to a public 

agency by a single firm, more typically the agency will divide the services into separate subprojects, 

often to allow small business contractors to bid on the subprojects. Alternatively, the prime consultant 

will associate one or more smaller firms to provide certain components of the required services under 

guidelines furnished by the state or local agency. (See Gov. Code, '' 4526, 14838.)1 For example, in 

order to promote the utilization of businesses owned by minorities, women, and disabled veterans, the 

prime consultant might choose such a firm to serve as the scheduling consultant2 for the project. 

The question we must resolve is whether the subconsultant in the circumstances 

described above, as well as the prime consultant, is required to be duly licensed in order to carry out 

construction project management services for a state or local agency. We conclude that all 

construction project management services performed for a state or local agency by a private firm must 

be under the direction and control of a licensed architect, registered engineer, or licensed general 

contractor. 

Section 4526 sets forth state policy as to the selection of certain professional services 

by state and local agencies. It reads in pertinent part as follows: 

"Notwithstanding any other provisions of law, selection by a state or local 

agency head for professional services of private architectural, landscape architectural, 

engineering, environmental, land surveying, or construction project management firms 

shall be on the basis of demonstrated competence and on the professional qualifications 

necessary for the satisfactory performance of the services required. In order to 

implement this method of selection, state agency heads contracting for private 

architectural, landscape architectural, professional engineering, environmental, land 

surveying, and construction project management services shall adopt by regulation, and 

local agency heads contracting for private architectural, landscape architectural, 

professional engineering, environmental, land surveying, and construction project 

management services may adopt by ordinance, procedures that assure that these 

services are engaged on the basis of demonstrated competence and qualifications for 

the types of services to be performed at fair and reasonable prices to the public 

agencies. . . ." 

As for construction project management services in particular, section 4529.5 provides: 

1

All references herein to the Government Code are by section number only. 

2

A scheduling consultant establishes a base-line estimate of time in which a project can be constructed using industry 

standard means and methods. The base-line schedule is typically updated monthly during construction to reflect the work 

remaining, taking into consideration contract modifications and attendant time allocations for added (or deleted) work. The 

net effect of a scheduling event, such as a late delivery of materials, is determined by the scheduling consultant, who may 

assign responsibility therefor. The scheduling consultant may also analyze the schedule during the construction period and 

alert the owner to opportunities for shortening the overall project duration by making additional expenditures. 

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"Any individual or firm proposing to provide construction project management 

services pursuant to this chapter shall provide evidence that the individual or firm and 

its personnel carrying out onsite responsibilities have expertise and experience in 

construction project design review and evaluation, construction mobilization and 

supervision, bid evaluation, project scheduling, cost-benefit analysis, claims review and 

evaluation, and general management and administration of a construction project." 

"Construction project management" is defined in section 4525, subdivision (e), to mean "those services 

provided by a licensed architect, registered engineer, or licensed general contractor which meet the 

requirements of section 4529.5 for management and supervision of work performed on state 

construction projects."3 

Given these provisions of the Government Code, certain conclusions may be reached as 

to licensing requirements which may pertain to consultants retained by a city to perform construction 

project management services. First, notwithstanding any other provision of law, this statutory scheme 

('' 4525-4529.5) regulates the selection by a state or local agency of a firm to provide construction 

project management services. (' 4526.) Second, when a state or local agency wishes to contract with 

a firm to perform construction project management services, it is required to select from among 

licensed architects, registered engineers, or licensed general contractors whose services meet the 

requirements of section 4529.5 for management and supervision of work performed on state and local 

construction projects. (' 4525, subd. (e).) Third, those providing construction project management 

services to a state or local agency must demonstrate expertise and experience in the areas of 

construction project design review and evaluation, construction mobilization and supervision, bid 

evaluation, project scheduling, cost-benefit analysis, claims review and negotiation, and general 

management and administration of a construction project. (' 4529.5.) 

The public policy enunciated in section 4526 is clear: "Notwithstanding any other 

provision of law, selection by a state or local agency head for professional services of private . . . 

construction project management firms shall be on the basis of demonstrated competence and of the 

professional qualifications necessary for the satisfactory performance of the services required." The 

objectives of construction project management are to ensure that the contractor delivers a quality 

product, on schedule, within budget, and in conformance with the project documents. A deficiency in 

any component of construction project management can mean the failure of one more of those 

objectives. If construction project management services are by definition those services provided by a 

licensed architect, registered engineer, or licensed general contractor to a state or local agency in 

connection with construction project design review and evaluation, construction mobilization and 

supervision, bid evaluation, project scheduling cost-benefit analysis, claims review and negotiation, and 

3

We consider this definition as being applicable to local construction projects as well. Our review of the legislative 

history of this statutory scheme ('' 4525-4529.5) reveals that local agencies were added in 1988 (Stats. 1988, ch. 1016), after 

inclusion of construction project management services in 1987 (Stats. 1987, ch. 698). Since the statutory scheme applies to 

both state and local agencies, no logical reason exists for the Legislature to set forth a particular definition of construction 

management services for state construction projects only, while providing no such definition relative to local construction 

projects. We thus believe that local construction projects are not mentioned in the definition of construction management 

services only because of an oversight by the Legislature. 

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general management and administration of a construction project (' 4525, subd. (e)), then any one of 

the foregoing activities must also be performed by, or under the direction and control of, a licensed 

architect, registered engineer, or licensed general contractor. 

As previously indicated, a construction project management firm may often utilize the 

services of a subconsultant for one or more components of construction project management for a state 

or local government project. When that is the case, the purposes and policies of section 4526 would be 

undermined if the subconsultant were permitted to carry out that function without being either licensed 

itself or subject to the direction and control of the licensed prime consultant.4 

We therefore conclude that a state or local agency may not contract with a private firm 

for construction project management services if all or part of such services are to be performed other 

than under the direction and control of a licensed architect, registered engineer, or licensed contractor. 

* * * * 

4

We have previously determined that a "construction management enterprise" does not require a contractor's or architect's 

license when the construction manager acts in the capacity of an employee of the owner of the project and receives wages as 

his sole compensation. (57 Ops.Cal.Atty.Gen. 421 (1974).) This determination was reached primarily on the basis of the 

Contractors' State License Law (Bus. & Prof. Code, '' 7000-7189.7) and cases decided thereunder. The Government Code 

provisions discussed herein concerning construction project management services for state and local agencies were not in 

effect at the time of our prior opinion. In light of the conclusion reached herein, we need not address the requirements of the 

Contractors' State License Law. (See Bus. & Prof. Code, '' 7026, 7026.1.) 

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