Can a general contractor perform concrete and framing job without c5 or c8 as prime contract with his own crew under B

We are currently building a multifamily building in Southern California that is 2 stories of wood frame over concrete foundation and podium. We have engaged with a General Contractor to subcontract the frame and concrete work at the project. For the sake of clarity lets call this GC as GC 1. GC 1 has engaged with another company to perform the concrete and frame work, later on we found out that the company that GC 1 has engaged with also holds a General B license, which makes the company a general contractor. So lets call this company GC 2. So GC 1 has contracted GC 2 to perform the work and GC 2 has used its employees in its payroll to perform the work. GC 2 does not hold a C5 or C8 license. Does this mean that the company GC1 hired as a subcontractor (which is GC 2), does not have the proper licensing since they executed the job as a subcontract? The crew that GC 2 would pour concrete and then the same crew would switch their tools and work as framers. The quality of the work has caused problems such as problems with drywall not being level, windows not being level, water leak through concrete, additional stucco work to cover the concrete that was not properly formed are just a couple that comes to my mind. What is the best way to recoup some of the damages that were caused by GC 2 due to performing a trade without C5 or C8 license? And what kind of action can we take against the GC1 which has subcontracted this work to GC 2 knowing that the only license they have was a General B License?