Ariz. Admin. Code § 17-3-202

Current through Register Vol. 30, No. 50, December 13, 2024

Section R17-3-202 - Contractor Prequalification

A. Criteria. An applicant for contractor prequalification shall include on the application and the Board shall consider the following information in determining the prequalification amount for a contractor:

1. Key personnel and their work experience,

2. Organizational structure,

3. History of past or current projects and contracts,

4. Company affiliations,

5. Equipment owned or controlled,

6. Any applicable licenses,

7. Type of work requested,

8. Individuals authorized to act on behalf of the contractor,

9. Any prequalification or bidding disputes with a government agency, and

10. Financial condition.

B. Prequalification Expiration and Extension.

1. Prequalification expires 15 months after the end of a contractor's fiscal year, as reflected on the financial statement. Due to the time necessary to prepare an examined financial statement, the Board may grant up to a 60 day extension on the expiration of prequalification, if:

a. The contractor submits a letter from its accountant stating the reasons for delay in preparing the examined financial statement,

b. The letter from the accountant states the anticipated completion date of the examined financial statement, and

c. The contractor submits an interim compiled or reviewed financial statement that was prepared within the previous six months.

2. The Board will notify each contractor in writing of its decision on the contractor's prequalification amount.

C. Joint Ventures.

1. Each contractor in a proposed joint venture shall be prequalified. The joint venture shall submit a joint venture statement of intent at least five calendar days before the applicable bid opening date.

2. If one or more of the parties to the joint venture are corporations, a copy of a resolution from the Board of Directors authorizing the corporation to enter into the joint venture and execute all contract documents shall be submitted with the statement of intent.

3. Contractors operating as a joint venture on a continuing basis may file for prequalification as a joint venture.

4. The Board may allow a contractor operating as a joint venture to prequalify for a pro rata share of the entire contract amount. The percentage share of work shall not exceed each individual contractor's prequalification amount.

D. Classification of Contractors. The Board shall categorize contractors into the following classifications:

1. Inexperienced firms: Firms that have no experience as contractors in transportation facilities construction work;

2. New firms: Recently organized firms that have officers with experience with other contractors in positions of responsibility for transportation facilities construction;

3. Unknown firms: Firms that have experience as contractors but have not completed a transportation facilities construction contract as a contractor for the Department within the past five years or at any time;

4. Known firms: Firms that have successfully completed at least one transportation facilities construction contract within the past five years as a contractor for the Department.

E. Classification of Financial Statements.

1. All financial statements shall be examined, reviewed, or compiled according to generally accepted accounting principles, by either an independent certified public accountant or an independent public accountant, registered and licensed under the laws of any state. A contractor shall not submit a financial statement prepared by either a certified or public accountant who is directly or indirectly interested in or affiliated with the business of the contractor.

2. A contractor that desires a prequalification amount in excess of $1.5 million shall submit an examined financial statement.

3. A contractor that submits a reviewed financial statement will be limited to a maximum prequalification amount of $1.5 million.

4. A contractor that submits a compiled financial statement will be limited to a maximum prequalification amount of $300,000.

F. Prequalification Limits. In determining the prequalification amount for each contractor, the amount set by the Board may be less than the maximum amount set out in this subsection due to the Board's evaluation of the contractor's information under R17-3-202(A).

1. Inexperienced firms. An inexperienced firm will be limited to a maximum prequalification amount of $300,000 until the contractor has satisfactorily completed at least one transportation facilities construction contract for any public agency.

2. New firms. A new firm will be limited to a maximum prequalification amount of five times the firm's net worth.

3. Unknown firms. An unknown firm will be limited to a maximum prequalification amount of five times the firm's net worth or the amount of the largest transportation facilities construction contract it has successfully completed as a contractor for any other public agency, whichever is larger.

4. Known firms. A known firm will be limited to a maximum prequalification amount of ten times the firm's net worth. An unlimited prequalification amount may be granted if the product of ten times the firm's net worth exceeds $100 million.

5. All firms. Evidence of additional assets pledged in behalf of a contractor or letters from a contractor's surety company may be considered in establishing higher prequalification amounts than stated in subsections (F)(2) through (F)(4). A parent company that pledges assets in behalf of a contractor shall submit a financial statement.

G. Reconsideration of Prequalification Determination.

1. If a contractor is dissatisfied with the Board's decision, the contractor may request in writing a hearing, within 15 days of receiving the Board's decision. The hearing shall be conducted under A.R.S. § 41-1062. The letter shall indicate the basis for the request and shall provide supportive data. The Board shall review the request and accompanying information and decide on the request within 30 calendar days of its receipt.

2. If the contractor is still dissatisfied with the decision of the Board, the contractor may appeal to the State Engineer. The Board shall notify the contractor about the appeal procedures.

H. Issuance of Bidding Documents. A contractor shall not request bid documents for a contract for which it is not prequalified.

I. The Department may waive the prequalification requirement on an individual contract when it is in the best interest of the state. The advertisement for bids shall identify if prequalification is waived.

Ariz. Admin. Code § R17-3-202

Adopted effective March 3, 1987 (Supp. 87-1). Amended by final rulemaking at 8 A.A.R. 79, effective December 10, 2001 (Supp. 01-4).