A. No contractor whose bid is accepted shall substitute any person as subcontractor in place of the subcontractor listed in the original bid, except that the using agency shall consent to the substitution of another person as a subcontractor in the following circumstances:

(1) when the subcontractor listed in the bid, after having had a reasonable opportunity to do so, fails or refuses to execute a written contract, when such written contract, based upon the general terms, conditions, plans and specifications for the project involved and the terms of such subcontractor's written bid, is presented to him by the contractor;

(2) when the subcontractor listed in the original bid becomes bankrupt or insolvent prior to execution of a subcontract;

(3) when the using agency refuses to approve the subcontractor listed in the original bid, provided such approval has been reserved in the bidding documents;

(4) when the subcontractor listed in the original bid fails or refuses to perform his subcontract;

(5) when the contractor demonstrates to the using agency or its duly authorized officer that the name of the subcontractor was listed as the result of an inadvertent clerical error;

(6) when a bid alternate accepted by the using agency causes the listed subcontractor's bid not to be low;

(7) when the contractor can substantiate to the using agency that a listed subcontractor's bid is incomplete;

(8) when the listed subcontractor fails or refuses to meet the bond requirements of the contractor;

(9) when it is determined that the listed subcontractor does not have a proper license to perform the work and the contractor has submitted the name of the subcontractor along with proof that the subcontractor bid work for which he was not licensed by the construction industries division of the regulation and licensing department; or

(10) when it is determined by the using agency, the prime contractor or the director of the labor and industrial division of the labor department that a listed subcontractor is not a registered subcontractor on the date bids are unconditionally accepted for consideration.

B. Prior to approval of the contractor's request for substitution of a subcontractor, the using agency shall give notice in writing to the listed subcontractor of the contractor's request to substitute and of the reasons for the request. The notice shall be served by certified or registered mail to the last known address of the subcontractor. The listed subcontractor who has been so notified has five working days within which to submit written objections to the substitution to the using agency. Failure to file written objections shall constitute the listed subcontractor's consent to the substitution. If written objections are filed, the using agency shall give at least five working days notice in writing to the listed subcontractor of a hearing by the using agency on the contractor's request for substitution.

C. No contractor whose bid is accepted shall permit any subcontract to be voluntarily assigned or transferred or allow it to be performed by anyone other than the original subcontractor listed in the original bid without the consent of the using agency.

D. No contractor whose bid is accepted, other than in the performance of change orders causing changes or deviations from the original contract, shall sublet or subcontract any portion of the work in excess of the listing threshold as to which his original bid did not designate a subcontractor unless:

(1) the contractor fails to receive a bid for a category of work. Under such circumstances, the contractor may subcontract. The contractor shall designate on the listing form that no bid was received; or

(2) the contractor fails to receive more than one bid for a category of work. Under such circumstances, the contractor may subcontract. The contractor shall state on the listing form that only one subcontractor's bid was received, together with the name of the subcontractor. This designation shall not occur more than one time on the subcontractor list.

History: Laws 1988, ch. 18, § 6; 1995, ch. 82, § 4; 2005, ch. 98, § 3.

The 2005 amendment, effective June 17, 2005, added Subsection A(10) to permit the using agency to consent to the substitution of a subcontractor when it is determined that a listed subcontractor is not a registered subcontractor on the date bids are unconditionally accepted for consideration.

The 1995 amendment, effective June 16, 1995, in Paragraphs A(2) and A(4) substituted "subcontractor listed in the original bid" for "listed subcontractor", in Paragraph A(2) added "prior to execution of a subcontract", added Paragraph A(3), redesignated former Paragraphs A(3) to A(7) as paragraphs A(4) to A(8), in Paragraph A(6) substituted "listed" for "original low", added Paragraph A(9); in Subsection B inserted "of a subcontractor" in the first sentence; in Subsection D, inserted the Paragraph D(1) designation, added Paragraph D(2); and made minor stylistic changes throughout the section.

Bid alternates. — The provision of Subparagraph [Paragraph] A(6), concerning acceptance of a "bid alternate" by the using agency, did not apply to allow substitution of a listed contractor when the invitation for bids requested two distinct bids covering a single bid lot and a combination of that bid lot with another and the contractor was required to list the subcontractor who would perform each category of work. Dynacon, Inc. v. D & S Contracting, 1995-NMCA-071, 120 N.M. 170, 899 P.2d 613.

Contractor could not substitute itself for subcontractor. — Without proper approval by the using agency, a general contractor could not substitute itself for a listed contractor after the using agency had accepted the general contractor's bid. Romero Excavation & Trucking, Inc. v. Bradley Constr., Inc., 1996-NMSC-010, 121 N.M. 471, 913 P.2d 659.