Transportation

Operations, Construction

Rule 2: Prequalification of Contractors

Effective Date: 03/16/2026

Admin. Code Reference: R916-2

Rule Type: Current Rule

R916. Transportation, Operations, Construction.

R916-2. Prequalification of Contractors.

R916-2-1. Authority and Purpose.

(1) This rule is made in accordance with the authority granted to the department in Section 72-1-201 and Subsection 63G-6a-106(3)(a).

(2) This rule establishes the criteria for the prequalification of entities seeking to submit bids or proposals for construction projects administered by the department.

(3) The department shall administer this rule in a manner that:

(a) ensures applicants possess adequate financial resources to provide complete performance of contracts awarded by the department; and

(b) fosters and protects competition in the department's bidding and proposal process.

R916-2-2. Definitions.

(1) The definitions provided in Section 72-1-102 and Rule R916-1 apply to this rule.

(2) In addition to the definitions described in Subsection (1), as used in this rule:

(a) "Applicant" means an entity that submits an application for prequalification.

(b) "Board" means the Prequalification Board created in Section R916-2-5.

(c) "Prequalification" means the process established by the department whereby an applicant that seeks to submit a bid or proposal for one or more construction contracts demonstrates to the department that the applicant has the resources and capabilities to successfully complete an awarded contract.

(d) "Specialty work classification" means a type of work that requires a specific skill set and experience to perform, as determined by the department.

R916-2-3. Prequalification.

(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.

(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.

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

(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.

(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:

(i) the maximum type, scope, and size of an individual awarded contract;

(ii) the specialty work classifications for which an applicant is authorized to submit one or more bids or proposals; and

(iii) the maximum contract value of all total contracts awarded to the applicant.

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

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

(a) experience;

(b) performance;

(d) financial condition.

(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.

(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)(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.

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

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

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

(i) past financial performance; and

(ii) current financial condition.

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

(a) fails to provide any requested information;

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

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

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

(f) has an average contractor performance rating over the past five projects that falls below 70%;

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

(h) otherwise fails to meet the department's requirements.

(9) The department may not accept any pledges.

R916-2-4. Joint Venture.

(1) Multiple prequalified contractors may jointly submit a bid or proposal as a joint venture.

(2) Before submitting a bid or proposal as a joint venture, the joint venture shall:

(a) register with the oo Division of Corporations and Commercial Code; and

(b) have a fully executed joint venture agreement and submit a copy of the agreement to the department's prequalification specialist at least four business days before a project's bid opening.

(3) The joint ventures included in the joint venture shall ensure that the agreement described in Subsection (2)(b) includes:

(a) the joint venture's name as the name appears on the joint venture's registration with the Utah Division of Corporations and Commercial Code;

(b) the name of each joint ventures included in the joint venture as each name appears on the registration with the Utah Division of Corporations and Commercial Code;

(d) the duration of the agreement and conditions for terminating the agreement;

(e) each joint venturer's interests to the joint venture and each joint venturer's claims, including claims to property, equipment, profits, and liabilities related to the joint venture;

(f) a provision recognizing that each joint venturer agrees to indemnify the other joint venturers against any loss or liability not directly related to the joint venture;

(g) the initial capital contribution of each joint venturer, and how each joint venturer will maintain and control working capital contributions;

(h) the name and authority of at least one authorized representative for each joint venture;

(i) information describing how the joint venture will manage and conduct business;

(j) information describing how the joint venture will maintain and control records belonging to the department;

(k) information describing the time and effort contribution of each joint venturer;

(l) information describing what happens to the joint venturer's assets and obligations should one venturer file for bankruptcy protection; and

(m) the name and project identification number of the project on which the joint venture will bid or propose.

(4) If joint venturers included in a joint venture intend to compete for multiple projects under the same joint venture, the joint venturers shall amend the joint venture agreement for each project the joint venturers intend to bid or propose.

(5) Joint venturers participating in a joint venture under this section may classify any portion of the joint venture agreement as protected from disclosure under Subsection 63G-2-305(1) or (2) by submitting, within the joint venture agreement, a claim of business confidentiality in accordance with the requirements of Section 63G-2-309.

R916-2-5. Prequalification Board.

(1) The department shall establish a prequalification board that includes the following members:

(a) the department's director of finance or the director of finance's designee;

(b) the department's director of state construction or the director of state construction's designee;

(d) a department prequalification specialist appointed by the department.

(2) The responsibilities of the prequalification board include:

(a) directing the prequalification process;

(b) reviewing and analyzing prequalification applications; and

(c) establishing the prequalification ratings and types of prequalification specialty work classifications that the department may grant to applicants.

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)