Why Licensing For The AEC Industry Takes So Long
When I travel the Northeast Corridor, I have to make allowances for New York City. Do I want the George Washington Bridge or the new Mario M. Cuomo Bridge? If I leave two hours early, I ask myself, can I beat the rush? In engineering licensing, as in road trips, New York is one of those places you just don’t motor through. You have to plan for New York and negotiate the place on its own terms. Unfortunately, many industry firms have been caught in the regulatory equivalent of rush-hour traffic, idling while the gas runs out on the opportunity of a lifetime. They identify a prime project, apply for licenses and pour a ton of energy into research and preparation. Then months pass and the deadline for submission sails by while paperwork is still awaiting eyeballs at the state level.
This happens all the time to AEC firms trying to enter difficult jurisdictions like New York. Currently, the New York Dept. of State is taking 17 to 18 weeks to approve business entity registrations for design and engineering firms. To make matters worse, they’re rejecting more than 80% of applications, which means the clock of agony starts all over again. The number one reason for rejection? Failure to complete the paperwork correctly.
I’ll give New York this: It’s forthright about what it doesn’t like in an application. The state publishes a list of 23 reasons why certificate of authority applications for professional firms are sent back. Fail to submit board certification for a specialty? Rejected. List a business address for a shareholder or officer? You’re out. Name includes a word such as “premier” or “special”? It’s coming back. Leave the periods out of “P.C.” or some other corporate designator? Sorry, you get to start over.
And this is all before you’ve even begun the licensing process. Firms still need to obtain a separate certificate of authorization for engineering, land surveying, and geology services through the licensing board. Add the need for name approval before launching the whole process, and you have the potential for serious paperwork tie-ups.
There are ways firms can set themselves up for success when contemplating entry into a challenging state like New York. It comes down to planning and assessing conditions early. Include entity registration and licensing as an early step in business development. Be meticulous with paperwork. Read everything; dot every i.
No Fast Lane
Yet even with ample preparation and planning, there’s just no fast lane for launching operations in New York. You’re looking at a five- or six-month process, even if your applications are flawless. In addition, to even qualify for licensure, firms must meet stringent ownership and management requirements. To meet them, firms often have to go to great lengths, such as forming a new entity or purchasing a business that is already licensed. While New York is particularly difficult, it is not the only state with a long and winding road to licensure. Illinois, Connecticut, New Jersey, Michigan and Alaska are close contenders. And licensing is only growing more complex, with many states tightening ownership requirements for engineering firms.
While this can be frustrating, for the most part states are doing what they can to make the licensing process as easy as possible. Much of the complexity arises from the many purposes licensing must serve. States have to ensure there’s a clear line of responsibility and oversight from people with the expertise to do the work, as well as a clear line of corporate authority and accountability for the results. That touches on everything from having an address on file for service of process to avoiding name conflicts to ensuring appropriate supervision by qualifying design and construction professionals. Add all that up and you’re going to have a lot of complex paperwork flowing through finite state channels.
Ultimately, the point of all that paperwork is to protect the public and the industry sector. Amidst the present movement to delicense professions, engineering is clearly an area where regulation serves the public good. After all, in design and construction, there’s a lot riding on your work.
So if you have New York in your sights, get out your GPS, pack plenty of snacks and settle in for the traffic delays. On the other side of licensure, a world of opportunity awaits in the Empire State.
If you have an idea for a column, please contact Viewpoint Editor Richard Korman at firstname.lastname@example.org.