Ansaldo Honolulu JV has agreed to pay the state $150,000 to settle two pending cases which alleged that Ansaldo was not licensed when the company submitted responses to the city as part of the bidding process for the rail transit project, the Department of Commerce and Consumer Affairs said today.

Ansaldo later won a $1.4 billion contract to design, build, operate and maintain rail cars.

In August, DCCA’s Regulated Industries Complaints Office received two complaints alleging that Ansaldo failed to obtain a contractor’s license before submitting a proposal for the city’s rail project. Although Ansaldo was licensed prior to submitting best and final offers and before a contract for the rail project was awarded, the company was not licensed when the bidding process initially began. 

According to the Contractors License Board, a contractor’s license is required to submit a bid on contracting work. Submitting a bid without a contractor’s license constitutes unlicensed contracting. The fine for unlicensed contracting activity ranges from $2,500 and can run as high as 40 percent of the total contract price. 

"As with similar cases RICO has handled in the past, RICO took into consideration that, in these cases, no consumers were harmed and a contractor’s license was in hand before a contract was signed or ground was broken," said RICO supervising attorney Daria Goto. "The amount of the fine reflects the size of the project and the fact that Ansaldo was in the beginning stages of the bidding process when it obtained a license."

The settlement reflects DCCA’s long-standing goal of bringing people and businesses into compliance with state licensing laws. 

"It’s a reminder that a contractor’s license is required to bid and perform contracting work in Hawaii," said Verna Oda, Executive Officer for the Contractor’s License Board.

The department said in a news release that RICO has entered into similar settlements in the past to resolve situations where the unlicensed person comes into compliance with licensing laws before there is any harm to consumers. 

Although the licensing issue was raised in an earlier procurement dispute, RICO’s jurisdiction in these cases was limited to determining whether Ansaldo may have engaged in contracting activity before obtaining a license, according to the news release. As part of the earlier procurement dispute, David Karlen, senior hearings officer of DCCA’s Office of Administrative Hearings had previously determined that Ansaldo’s licensing status did not disqualify the company from bidding on the city’s rail project.