Do I simply select "No, I did not pay for work that required a 1099",
Yes, that is the option you will select. Does it really have the word "contractor" in that? It should be better specified because you only do a 1099-MISC if you pay an "individual" more than $600 total in the tax year. A self-employed licensed contractor is not considered an "individual" if you paid their business, as opposed to paying the individual directly.
