DAR File No. 38912

Transportation, Operations, Construction

Rule R916-2

Prequalification of Contractors

Notice of Proposed Rule

(Amendment)

DAR File No.: 38912
Filed: 10/15/2014 05:37:12 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of the amendment is to provide greater access to the Utah Department of Transportation (UDOT) procurements for small businesses by updating rule references, revising and adding definitions, changing the project advertised estimate threshold for which prequalification is required, adding and revising prequalification guidance and information, and providing joint venture guidance and information.

Summary of the rule or change:

This amendment: 1) updates references to the Utah Code Ann. Sections that the rule is authorized under; 2) updates and adds definitions; 3) changes the project advertised estimate threshold for which prequalification is required from $1,500,000 or under to $3,000,000 or under; 4) adds prequalification information submittal deadline; 5) authorizes the department to alter an applicant's status anytime during the process as needed; 6) eliminates requirement that federal income tax returns accompany reviewed financial statements; 7) defines the lower prequalification rating; 8) provides and defines an applicants ability to submit a guaranty of financial support; 9) limits information applicant must provide regarding experience and past performance; 10) eliminates the "Status of Work under Contract" form requirement; 11) defines conditions under which an application may be rejected; 12) provides notice that the department will not accept any pledges; 13) defines requirements for applying as a joint venture; and 14) repeals the disqualification rule.

State statutory or constitutional authorization for this rule:

• Section 72-1-201
• Subsection 63G-6a-106(3)(a)

Anticipated cost or savings to:

the state budget:

The revised rule is intended to provide greater access to UDOT procurement contracts to small businesses. It does not increase or decrease fees, there will be no additional cost to administer the revised rule. The revised rule will not affect the state's budget.

local governments:

The revised rule is intended to provide greater access to UDOT procurement contracts. The revised rule does not provide anything to or require anything from local governments, therefore it will not affect the budgets of local governments.

small businesses:

Because the revised rule is intended to provide greater access to UDOT procurement contracts to small businesses it should provide non-fiscal benefits to small businesses. The revised rule does not increase or decrease fees and there will be no additional cost to administer the revised rule. The revised rule will have a positive effect on small businesses.

persons other than small businesses, businesses, or local governmental entities:

Since the revised rule provides greater access to UDOT procurement contracts to small businesses it creates an incentive to start a small business and enter the market. Therefore, the revised rule will affect persons other than small businesses, businesses, or local government entities in a positive way.

Compliance costs for affected persons:

The revised rule requires no compliance fees of affected persons.

Comments by the department head on the fiscal impact the rule may have on businesses:

Director Braceras agrees with the assessment of the drafting attorney with respect to costs to affected persons.

Carlos M. Braceras, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Transportation
Operations, Construction
CALVIN L RAMPTON COMPLEX
4501 S 2700 W
SALT LAKE CITY, UT 84119-5998

Direct questions regarding this rule to:

• James Palmer at the above address, by phone at 801-965-4000, by FAX at 801-965-4338, or by Internet E-mail at jimpalmer@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

12/01/2014

This rule may become effective on:

12/08/2014

Authorized by:

Carlos Braceras, Executive Director

R916. Transportation, Operations, Construction.

R916-2. Prequalification of Contractors.

R916-2-1. Authority and Purpose.

This rule establishes procedures for prequalifying[prequalification of] contractors desiring to submit bids and proposals [on]for Utah Department of Transportation construction projects. This rule is authorized under Utah Code Ann. Sections 72-1-201[,] and [Subsection] 63G-6 a- 106(3)(a)[207(3)].

 

R916-2-2. Definitions.

(1) Terms used in this rule are defined in Section 72-1-102[and Subsection 63G-6-207(3)].

(2) [In addition, ]"[b]Board" means the prequalification board, consisting of 4 positions: Department of Transportation [c]Comptroller, [project development engineer]Director of Construction and Materials, an engineer for construction, and the [construction administrative secretary]Prequalification Specialist, or designees.

(3) "Applicant" means any person who submits an application for prequalification.

 

R916-2-3. Prequalification.

(1) Contractors desiring to submit bids or proposals for construction contracts shall be prequalified by the [d]Department to ensure they have the resources and capability to successfully complete awarded contracts. Prequalification [of contractors ]is not required for [contracts]projects that have an advertised estimate of[under] $[1,500,000]3,000,000 or under.

(a) Prequalification information is due at least 10 calendar days before submitting a proposal or bid on projects of more than $3,000,000.

(b) The Department may change an Applicant's prequalification status at any time if the Department receives favorable or unfavorable information about the Applicant's job or financial performance.

(c) The prequalification amount limits the size of individual contracts and type of work for which a prequalified contractor may submit proposals or bids.

(2) Qualification ratings establish the type of construction work contractors may be permitted to perform and the maximum dollar value of contracts they are allowed to undertake at any one time.

(3) [Contractors]Applicants who attain a total prequalification of $50,000,000 shall be classified as unlimited. Each [contractor]Applicant's prequalification shall be reviewed at least annually; more often if circumstances so warrant as determined by the Department.

(4) Qualification ratings shall be based on evaluation of the [contractor's]Applicant's:

(a) experience;

(b) past performance;

(c) personnel; and

([c]d) analysis of certified audited financial statements, including balance sheet, income statements, equipment and changes in financial condition.

([i]e) [R]reviewed financial statements [accompanied by the company federal income tax return ]for the same time period may be accepted in lieu of the required certified audited financial statements, however, [this]providing these documents shall result in a lower prequalification rating of one-half of the financial factor allowed under the usual procedure.

(5) An applicant may submit a guaranty of financial support provided by an affiliated but independent entity. The Department shall provide a guarantee form for this purpose. Applicants must submit the Department's guarantee form with their applications. The guarantee may increase an applicant's adjusted equity by a maximum of 50% of the applicant's calculated adjusted equity in the formula.

([5]6) The applicant shall only provide the experience and past performance of the applicant, and must submit financial documents that accurately represent the past financial performance and present financial condition of the applicant.[Each bid proposal submitted shall include a complete "Status of Work Under Contract" form. The form shall include all work presently the responsibility of said contractor, both in and out of the state of Utah.

(a) Contractors with a prequalification amount classified as unlimited are exempt from this requirement.]

(7) The Department may reject an application and not pre-qualify an Applicant if the Applicant:

(a) fails to provide all requested information;

(b) provides false, misleading, or incorrect information;

(c) has now or in the past had an officer, member or owner who was convicted of a felony;

(d) is now or has been suspended or debarred by any governmental entity;

(e) has failed to complete a construction contract as the prime contractor;

(f) has been convicted or held liable for any crime or civil offense that involved collusive or deceptive activity related to a procurement process; or

(g) otherwise fails to meet the Department's requirements.

([6]8) This rule shall be administered to ensure that Applicants possess adequate financial resources to provide complete performance of contracts awarded to them by the Department, and to foster and protect competition in [bidding for construction contracts]the Department's bidding processes.

( 9) The Department will not accept any pledges.

 

R916-2-4 Joint Venture.

(1) Joint ventures must submit a letter of intent to the Department's Prequalification Board Specialist that states the exact name of the joint venture and identifies the joint venture's designated administrative partner before submitting a joint proposal on a project. Joint ventures must submit their joint proposals at least four working days before the scheduled bid opening. The Department will consolidate individual prequalification amounts for joint venture bids or proposals.

(2) Applicants shall obtain the following under the joint venture designation before bid openings:

(a) Bid bond; and

(b) UDOT Contractor identification and password.

 

R916-2-[4]5. Prequalification Board.

(1) The Prequalification board is established to:

(a) direct the prequalification of contractors;

(b) review and analyze prequalification applications; and

(c) establish the amount and type of prequalification to be granted to contractors.

 

[R916-2-5. Disqualification.

(1) If the board determines a contractor is not performing in a satisfactory manner on projects, the board may disqualify the contractor from bidding on future projects for a period of time as the board may determine.

(2) If it is determined any contractor knowingly or negligently falsifies their "Status of Work Under Contract," they may be disqualified from bidding on projects for a period of time as the board may determine.

(3) Bonding companies that do not satisfactorily perform on contract bonds, as determined by the board, or are not listed in the Department of the Treasury Circular 570, may be suspended from supplying bonds for projects for a period of time as the board may determine. The Department of the Treasury Circular 570 is available on the internet at www.fms.treas.gov/c570/c570.html.

(4) Any contractor or bonding company so suspended may appeal any decision of the board to the transportation commission.

 

]KEY: bids, contracts, prequalification

Date of Enactment or Last Substantive Amendment: [October 11, 2011]2014

Notice of Continuation: August 11, 2011

Authorizing, and Implemented or Interpreted Law: 72-1-102; 72-1-201; [63G-6-207(3)]63G-6a-106(3)(a)