Oklahoma Subcontractors Seek Crackdown on Out-of-State Firms

By Carter, M Scott | THE JOURNAL RECORD, April 6, 2012 | Go to article overview

Oklahoma Subcontractors Seek Crackdown on Out-of-State Firms


Carter, M Scott, THE JOURNAL RECORD


For masons, the state's rock-solid economy isn't so solid.

In fact, for a good portion of the state's masons and bricklayers, business has almost come to a standstill.

And even though construction projects both private and public are booming, masons and many other construction-related businesses are being pushed out of the marketplace by out-of-state companies that are consistently the lowest bidder on projects.

The problem, industry officials said, is that these foreign subcontractors aren't following the law.

Mark Nestlen, executive director of the American Subcontractors Association of Oklahoma, said the problem has gotten so bad that only a handful of state masonry subcontractors are working.

"These out-of-state guys see the strong economy and all the construction business so they come in here, bid really low and get the work," he said. "But they're not registered. They're not following the law; they don't pay for workers' comp or pay taxes and they're driving our guys out of business."

The issue is made worse, he said, because many of the construction projects are public schools and buildings paid for by taxpayers.

Edward Navarro, president of the International Union of Bricklayers and Allied Craftsmen Local 5 in Oklahoma City, agreed. In a letter to the Oklahoma Tax Commission, Navarro wrote that out- of-state contractors were pouring into Oklahoma and underbidding state businesses by not paying workers' compensation insurance, income and unemployment taxes or local sales tax on materials.

"Out-of-state contractors need to have present laws enforced requiring them to quit hiding employee payroll as per diem upon which no income or unemployment taxes are paid," he wrote. "(State tax officials) need to make sure valid workers' compensation coverage exists."

Mark Rose, vice president of Advanced Masonry, an Oklahoma City firm, said many out-of-state contractors were cheating the system.

"We are being overrun by out-of-state firms who don't report any employment taxes, sales taxes and workers' compensation insurance costs," he said. …

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