1. (1)(a) Unless otherwise provided in this rule, an applicant that seeks to submit a bid or proposal for one or more construction projects must first demonstrate to the department, through prequalification, that the applicant has the resources and capabilities to successfully complete an awarded contract.

   1. (b) Except as provided in Subsection (1)(c), a potential contractor does not need to participate in prequalification for a project with an advertised estimate of $3,000,000 or less.
   2. (c) An applicant seeking to participate in a transportation project that requires a specialty work classification must obtain prequalification from the department as a specialty contractor, regardless of the project's value.

2. (2)(a) An applicant must submit prequalification information at least 20 calendar days before submitting a bid or proposal for a project.

   1. (b) The department may change an applicant's prequalification status at any time if the department receives information about the applicant's work or financial performance.

   2. (c) Through prequalification, the department shall determine a rating for each applicant that establishes the type of project that the applicant is permitted to perform, including:

      1. (i) the maximum type, scope, and size of an individual awarded contract;
      2. (ii) the specialty work classifications for which an applicant is authorized to submit one or more bids or proposals; and
      3. (iii) the maximum contract value of all total contracts awarded to the applicant.
   3. (d) The department shall classify an applicant as unlimited if the applicant's total prequalification rating reflects a permitted maximum contract value of $50,000,000 or more for all awarded contracts.

3. (3)(a) The department shall review each applicant's prequalification information at least annually.

   1. (b) The department may review an applicant's information more than once a year if warranted, as determined by either the department or the applicant.

4. (4) The department shall base an applicant's prequalification rating on the applicant's:

   1. (a) experience;
   2. (b) performance;
   3. (c) safety record; and
   4. (d) financial condition.

5. (5)(a) In determining an applicant's financial condition as described in Subsection (4)(d), the department may analyze information from financial statements that have undergone audit or review, including balance sheets, income statements, current assets, fixed assets, liabilities, long-term debt, equity, cash flow, and revenues.

   1. (b) If the financial statements described in Subsection (5)(a) are reviewed rather than audited, the department may accept the statements for the corresponding period, but the applicant's prequalification rating may only be based on one-half of the financial rating factor that would apply to audited financial statements.

6. (6)(a) When providing prequalification information to the department, an applicant may submit in a form approved by the department a guarantee of financial support provided by an affiliated but independent entity, accompanied by financial statements of the entity providing the guarantee.

   1. (b) If an applicant submits a guarantee of financial support in a form approved by the department, the applicant's equity as part of the department's prequalification formula may be adjusted by an amount up to 50% greater than determined by the department.

7. (7) In submitting an application for prequalification, an applicant may only provide:

   1. (a) prequalification information that describes the experience and performance of the applicant itself; and

   2. (b) financial statements in the name of the applicant that accurately represent the applicant's:

      1. (i) past financial performance; and
      2. (ii) current financial condition.

8. (8) The department may reject an application and decline to prequalify an applicant if, as determined by the department, the applicant:

   1. (a) fails to provide any requested information;
   2. (b) provides false, misleading, or incorrect information;
   3. (c) has now or in the past had an officer, member, or owner who was convicted of a felony;
   4. (d) is suspended or debarred by any governmental entity;
   5. (e) has failed to complete a construction contract as the prime contractor;
   6. (f) has an average contractor performance rating over the past five projects that falls below 70%;
   7. (g) has been convicted or held liable for any crime or civil offense involving collusive or deceptive activity related to a procurement process; or
   8. (h) otherwise fails to meet the department's requirements.
9. (9) The department may not accept any pledges.

KEY: bids, contracts, prequalification, contractor rating

Date of Last Change: March 16, 2026

Notice of Continuation: March 21, 2026

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