Section 105IAC11-2-3. Classification and capacity rating

   (a) A contractor may be classified for one (1) or more types of work and will be rated in accordance with its financial ability, adequacy of plant and equipment, organization, prior experience, record of construction, and other pertinent and material facts which may affect its classification. The contractor will be assigned a classification which will limit the type and quantity of uncompleted work it has under contract at any one (1) time as principal or subcontractor regardless of the location of the work or with whom it is contracted.

  (b) A contractor will be assigned an aggregate amount that is to be considered the largest dollar amount of uncompleted work it shall have under contract at any one (1) time, either as principal or subcontractor, or both, regardless of its location and with whom it is contracted, with the following exception: If the aggregate amount is less than three hundred thousand dollars ($300,000), the aggregate amount is to be considered the largest dollar amount of uncompleted work a contractor shall have under contract at any one (1) time as a principal, regardless of its location and with whom it is contracted. The largest dollar amount of uncompleted work the contractor shall have under contract at any one (1) time, as principal and subcontractor, regardless of its location and with whom it is contracted, shall not exceed three hundred thousand dollars ($300,000).

  (c) The contractor's maximum aggregate rating as determined from the statement will be the sum of the following rating components:

(1) Net current assets multiplied by ten (10).

(2) Construction equipment assets (net book value) multiplied by eight (8), but not to exceed one and one-half (1 1/2) times subdivision (1).

(3) Net fixed and other assets multiplied by two (2), but not to exceed twenty-five percent (25%) of subdivision (1) plus subdivision (2).

  (d) Accepted net current assets will be determined from the statement submitted and will be construed as to include only those net current assets which are readily convertible into working capital. Receivables from nongovernmental agencies over one (1) year old will be deducted for prequalification purposes.

  (e) Notes due within one (1) year from the financial statement date will be considered a current liability. Notes due after twelve (12) months and within twenty-four (24) months will be considered a fixed liability and deducted from net fixed assets, and the excess, if any, will be deducted from the book value of the equipment. If this is insufficient, the excess will be deducted from the net current assets. Notes due after twenty-four (24) months will not be deducted for prequalification purposes.

  (f) If the applicant has guaranteed loans of any person or any entity, or has used assets as security for these loans, or has made other guarantees or commitments of activities of any person or any entity, the department may reduce or adjust the applicant's net current assets if in the judgment of the department the guaranteed loans, other guarantees, or commitments are significant when considered with the applicant's statement.

  (g) Notes and accounts receivable from affiliated business firms will not be allowed as assets unless there is attached an audited financial statement showing the debtor has sufficient liquidity to discharge the debt, except an unaudited statement, certified as correct by the debtor, will be accepted if an unaudited statement is submitted for qualification. Notes and accounts receivable from partners of a partnership, or officers and stockholders of a corporation, may not be allowed as assets unless there is attached an audited financial statement.

  (h) The book value and the market value for stocks and bonds are to be listed. Stocks and bonds will not be considered as working capital unless market value, determined or verified by the accountant, is given. Allowance for stocks and bonds is made for whichever is the lesser of the book or market value except that for stocks or bonds listed on the New York Stock Exchange, American Stock Exchange, or over-the-counter on the National Association of Securities Dealers Automated Quotations (NASDAQ) list, the market value will be used. Stocks of affiliates or subsidiaries which are qualified with the department will not be considered as assets.

  (i) The value of useful construction equipment may be the book value listed or may be determined by the application of uniform depreciation schedules. No rating credit will be given for equipment which cannot be satisfactorily identified as to kind, type, and capacity or for which the essential information as to cost and age is not supplied.

  (j) "Fixed and other assets" means those assets which have a collateral value but are not readily or normally converted into cash or not directly pertinent to the operation or financing of construction contracts. Construction equipment value in excess of the rating limitation of subsection (c)(2) will be considered as part of fixed assets.

  (k) A contractor will first be given a tentative factor of one hundred percent (100%) in its aggregate and respective classified ratings. Each of these tentative factors may be reduced wholly or in part for the contractor's deficiencies in the following areas as determined from a summary of reports from field engineers, other investigations or an interview with the contractor, or both. The areas considered for qualification of the contractor include the following:

(1) Organization.

(2) Personnel.

(3) Construction experience.

(4) Prosecution of work on previous contracts.

(5) Quality of workmanship on contracts.

(6) Condition and adequacy of equipment.

(7) The contractor's attitude toward department rules, the general public, and equal employment opportunity requirements.

  (l) An "unlimited" qualification may be granted if a contractor's maximum aggregate rating exceeds one hundred million dollars ($100,000,000).

  (m) A contractor which has not performed work of any character under the firm name in its application and does not have, among its active staff, personnel of approved experience is not entitled to be rated for any work in excess of two hundred thousand dollars ($200,000). An experience and performance factor reduction of not less than thirty percent (30%) will be made in the case of any organization which has not had previous experience on comparable work. (Indiana Department of Transportation; 105 IAC 11-2-3; filed Jul 25, 1991, 3:30 p.m.: 14 IR 2187; readopted filed Nov 7, 2001, 3:20 p.m.: 25 IR 899; readopted filed Jun 14, 2007, 2:45 p.m.: 20070627-IR-105070237RFA; readopted filed Oct 2, 2013, 11:39 a.m.: 20131030-IR-105130295RFA)