in-20260722-IR-105260213FNA: PREQUALIFICATION OF CONTRACTORS AND CONSULTANTS; BIDDING REQUIREMENTS

TITLE 105 INDIANA DEPARTMENT OF TRANSPORTATION Notice of First Public Comment Period LSA Document #26-213 PREQUALIFICATION OF CONTRACTORS AND CONSULTANTS; BIDDING REQUIREMENTS PURPOSE OF NOTICE The Indiana Department of Transportation (department) is soliciting public comment on adding, amending, readopting, and repealing rules at 105 IAC 11 concerning the prequalification of contractors and consultants and bidding requirements. ADDITIONAL DOCUMENTS Regulatory Analysis: 20260722-IR-105260213RAA Notice of Public Hearing: 20260722-IR-105260213PHA CITATIONS AFFECTED: 105 IAC 11 AUTHORITY: IC 8-23-2-6; IC 8-23-10 OVERVIEW Basic Purpose and Background The proposed rule seeks to modernize the prequalification process for contractors and to add language to include the prequalification of consultants. The proposed rule simplifies the prequalification process for businesses, clarifies appeal rights, and defines the role of the prequalification committee. The implementation costs of the proposed rule are not expected to exceed the threshold set in IC 4-22-2-22.7(c)(6). For purposes of IC 4-22-2-28.1, small businesses affected by this rulemaking may contact the Small Business Regulatory Coordinator: For purposes of IC 4-22-2-28.1, the Small Business Ombudsman designated by IC 5-28-17-6 is: Resources available to regulated entities through the small business ombudsman include the ombudsman's duties stated in IC 5-28-17-6, specifically IC 5-28-17-6(9), investigating and attempting to resolve any matter regarding compliance by a small business with a law, rule, or policy administered by a state agency, either as a party to a proceeding or as a mediator. REQUEST FOR PUBLIC COMMENT The department is soliciting public comment on the proposed rule. Comments may be submitted in one of the following ways: COMMENT PERIOD DEADLINE All comments must be postmarked or time-stamped not later than August 21, 2026. The rule, Regulatory Analysis, appendices referenced in the Regulatory Analysis, and materials incorporated by reference (if applicable) are on file at the Indiana Department of Transportation, 100 North Senate Avenue, Room N758, Indianapolis, Indiana and are available for public inspection. Copies of the rule, Regulatory Analysis, and appendices referenced in the Regulatory Analysis are available at the Indiana Department of Transportation office. If the department does not receive substantive comments during the public comment period or public hearing, the rule may be adopted with text that is the same as or does not substantially differ from the text of the proposed rule published in this notice. PROPOSED RULE Sec. 1. (a) The procedural requirements established by this article apply to all applications and proceedings set forth in IC 8-23-10. (b) The definitions in this rule apply throughout this article. Sec. 2. "Advertisement" means the public announcement, as notice required by law inviting bids for that requests work to be performed or materials. to be furnished. The department may elect to use electronic or other means to disseminate the public announcement. Sec. 2.1. "Aggregate rating" means the maximum value of uncompleted work a contractor or consultant may have under contract, including work for the department and other entities. The aggregate rating is determined by the financial resources shown in a contractor's or consultant's prequalification statement. Sec. 7. "Bidder" means an individual, partnership, firm, corporation, or combination of same submitting a bid for the advertised work. a contractor or consultant that submits a proposal for a contract. Sec. 7.1. "Bidding capacity" means a contractor's or consultant's eligible amount of uncompleted work, as determined by deducting the value of their total unearned work from their aggregate rating. Sec. 7.2. "Capacity rating" means the maximum value of work for a specific classification a contractor or consultant may undertake. Sec. 8. "Certificate of qualification" means the official document issued by the department which authorizes indicating that a contractor or consultant is prequalified to bid on or perform department contracts. Sec. 9.1. "Consultant" means a person, firm, or corporation providing professional services to the department. Sec. 11. "Contractor" means the individual, partnership, a person, firm, or corporation or combination of same contracting with or desiring to contract that contracts with the department for performance of prescribed to perform construction or maintenance work. Sec. 12.1. "Day" means a calendar day, with any period of time to be computed, as set forth in IC 4-21.5-3-2. Sec. 13. "Department" means the Indiana department of transportation. as constituted under the laws of Indiana for the administration of highway work. As used in this article, "department" means the Indiana department of transportation acting directly or through its authorized representative. the division that manages prequalification. Sec. 15.1. (a) "Maximum bidding capacity" means a contractor's or consultant's aggregate rating minus the value of all their current unearned work. Sec. 20. "Prequalification committee" means the committee appointed by the commissioner to: that may, in conjunction with the department's authorized representative: Sec. 25. "Quorum" means that number of members of the prequalification committee, or their designated alternates, that constitutes a majority of its voting members. For this purpose, the chairman is not considered a voting member. Sec. 27. "Specifications" refers to all "Specification" means the directions, provisions, and requirements pertaining to performance of the work. for a specific project. Sec. 29.5. "Subconsultant" means a party to whom a consultant sublets any part of a contract. Unless otherwise indicated, "consultant" also refers to subconsultant. Sec. 30. "Subcontractor" means an individual, partnership, firm, corporation, or combination of same a party to whom the contractor sublets any part of the a contract. Unless otherwise indicated, "contractor" also refers to subcontractor. Sec. 32.1. "Tier one prequalification" means the level of prequalification assigned to a contractor or subcontractor that requires submission of a financial statement audited by a certified public accountant. The prequalification committee reviews and sets the maximum aggregate rating on an annual basis. A tier-one prequalification certificate is valid for the time set forth in IC 8-23-10-2(c). Sec. 32.2. "Tier two prequalification" means the level of prequalification assigned to a contractor or subcontractor that requires submission of a financial statement reviewed by a certified public accountant. The financial statement must have been completed not more than six (6) months before submission to the department. The prequalification committee reviews and sets the maximum aggregate rating on an annual basis. A tier-two prequalification certificate is valid for the time set forth in IC 8-23-10-2(c). Sec. 32.3. "Tier three prequalification" means the level of prequalification assigned to a contractor or subcontractor that requires a self-certified, compiled financial statement. The prequalification committee reviews and sets the maximum aggregate rating on an annual basis. The self-certified, compiled financial statement must have been completed not more than six (6) months before submission to the department. A tier-three prequalification certificate is valid for not more than sixteen (16) months from the year-end date of the financial statement submitted by the contractor. Sec. 32.4. "Tier four registration" means the level of registration assigned to a subcontractor performing work in aggregate for the department, for an amount less than that set forth in IC 8-23-10-4. Tier four registration is also assigned to those hauling materials or supplies to and from a job site, escorting over-height vehicles, and railroad flagging. Sec. 33. "Unearned work" means the total dollar value of work for the department contracted for but not performed. The value of items purchased and delivered, but not installed, is considered unearned work. For a specific department contract, the value of unearned work shall be based upon the original amount bid, plus the value of items added by approved change orders, minus items deleted by approved change orders, minus the most recent progress estimate submitted by the department's project engineer/supervisor, minus this person's determination of items performed subsequent to the progress estimate but prior to the point in time for which unearned work is calculated. Sec. 1.5. (a) A contractor must be prequalified by the department to bid on, or perform any work on, a state highway or bridge project for the department or a local unit. (b) To become prequalified by the department, a contractor must do the following: (c) The department may request evaluations of performance from parties that have current or past work experience with the contractor seeking prequalification. The evaluations will not be provided to the contractor. (d) Contractors must apply for a new certificate of qualification before their current certificate expires. Failure to do so will result in the loss of the ability to enter into a contract with the department until a new certificate is issued. (e) Contractors must report significant changes in their financial position or equipment to the department within thirty (30) days of the change. Failure to timely report changes may result in the department taking action on the certificate, up to and including revocation. (f) Providing incomplete or false information to the department at any time may lead to rejection of the application or disqualification of the contractor. Sec. 2.1. (a) A contractor's financial prequalification level determines their capacity and the type of financial statement required by the department. (b) Contractors must follow the application process determined by the department and meet the required audit criteria to receive a certificate. (c) Subcontractors or other parties identified by the department must submit proof of registration with the secretary of state, as required by law, to qualify for a tier four registration. Sec. 3.1. (a) The department shall determine a contractor's eligibility to bid by classifying them for specific types of work and assigning a capacity rating. The department's determination of a contractor's eligibility to bid is based on several factors, including: (b) The department may classify a contractor for one (1) or more work types. The department's determination of a contractor's work types is based on several factors, including: (c) Contractors that hold a prequalification certificate that is valid for more than twelve (12) months must submit an annual prequalification update, as determined by the department, confirming their continued eligibility for prequalification. Sec. 3.2. (a) To perform work for the department, a consultant must complete both a technical and a financial portion of the prequalification process, as determined by the department. (b) To become prequalified by the department, a consultant must do the following: (c) The department may request evaluations of performance from parties that have current or past work experience with the consultant. The evaluations will not be provided to the consultant. (d) Consultants must apply for a new certificate of qualification before their current certificate expires. Failure to do so will result in the loss of the ability to enter into a contract with the department until a new certificate is issued. (e) Technical and financial certificates are valid for the time set forth in IC 8-23-10-2(c). (f) Consultants must submit an annual prequalification update, as determined by the department, confirming their continued eligibility for consultant prequalification. (g) Consultants must report significant changes in their financial position or personnel with technical experience required for any particular work type to the department within thirty (30) days of the change. Failure to timely report changes may result in the department taking action on the certificate, up to and including revocation. (h) Providing incomplete or false information to the department at any time may lead to rejection of the application or disqualification of the consultant. Sec. 3.3. (a) Contractors and consultants must notify the department of any changes to: (b) Contractors and consultants must report changes to the department within thirty (30) calendar days of the change. (c) Failure to report changes within thirty (30) calendar days of a change may result in the department taking action on the certificate, up to and including revocation of the certificate. (d) Contractors and consultants may file a new application for prequalification as set forth in IC 8-23-10-5. Sec. 3.4. (a) Contractors and consultants may request a change in bidding capacity or work type on an existing prequalification certificate. (b) Requests for changes must be received by the department at least thirty (30) days before the date by which the change is effective. (c) The department will issue a new prequalification certificate if it grants the modification request. The new prequalification certificate supersedes any prior prequalification certificate. (d) Contractors and consultants may file a new application for prequalification as set forth in IC 8-23-10-5. Sec. 3.5. (a) Contractors and consultants must: Failure to do so may result in action upon the certificate, up to and including revocation. (b) Failure to follow the processes outlined in this rule by any party may lead to department action against: Sec. 4.1. (a) The prequalification committee is created. (b) The commissioner shall appoint the members of the prequalification committee who shall serve at the commissioner's discretion. (c) Each member of the prequalification committee may designate an alternate member in writing. (d) The prequalification committee shall have jurisdiction over all matters before it. The prequalification committee may act either on referrals from the department or on its own initiative. (e) The prequalification committee must have a quorum to conduct business. A majority of the votes cast are required to adopt a motion. Abstentions do not count as votes cast. (f) The prequalification committee may investigate, request documents, and interview witnesses, other people, or entities. (g) The prequalification committee may recommend a course of action to the commissioner based on a majority vote. The commissioner may accept, reject, or modify the recommendation. All actions of the commissioner are effective upon the commissioner's signature. (h) The commissioner's decision may be appealed under IC 4-21.5. (i) For purposes of time computation, IC 4-21.5-3-2 applies. (j) The prequalification committee shall review the aggregate capacity level for all tiers of the prequalification process outlined in this rule for contractors, and set an aggregate capacity level for the following calendar year by December 31. Sec. 5. (a) The prequalification committee may recommend to the commissioner a change in the certificate of qualification issued to a contractor or consultant based upon on the receipt of additional information. (b) Notification of a change in a certificate of qualification will be made in writing and will become effective after all avenues of appeal set forth under section 9 of this rule IC 4-21.5-3 are exhausted. (c) If the action involves the addition of a classification or the increase of a rating to a certificate of qualification, the certificate will become effective on the date the commissioner signs it and will be in effect during the administrative appeal under section 9 of this rule. (b) (d) A request from the contractor or consultant for a change in its qualification status must be in writing and received not less than fifteen (15) thirty (30) days prior to the bid opening date. An applicant who (e) A contractor or consultant that: may, at any time after the expiration of ninety (90) days from the date of the department's previous decision, request a change in, or file a new application for, qualification. Sec. 6. (a) The prequalification committee may recommend to the commissioner the suspension of the contractor's certificate of qualification issued to a contractor or consultant if: (b) Notification of the suspension shall be made in writing, and the suspension will become effective after all avenues of appeal set forth under section 9 of this rule IC 4-21.5-3 are exhausted. The suspension will be lifted when the contractor has taken corrective action to the personal satisfaction of the commissioner. Sec. 7. A certificate of qualification contractor or consultant may be withdrawn if it has been administratively determined by the prequalification committee that the firm or corporation is no longer active or in existence. Notification withdraw an application for qualification or an existing qualification certificate at any time by submitting notice of the withdrawal shall be made in writing and will become effective after all avenues of appeal under section 9 of this rule are exhausted. to the department. Sec. 9. (a) A contractor or consultant aggrieved by the decision of the department in regard to the contractor's or consultant's qualification, suspension, withdrawal, revocation, or change in either classification or rating of an existing certificate may make a written request for consideration reconsideration to the prequalification engineer, with a copy to the commissioner, department within fifteen (15) days after receiving such notification. notice of the department's decision. (b) The contractor may follow the procedure outlined in STEP ONE and STEP TWO, or the contractor may elect for a hearing as set forth in STEP TWO. The contractor shall, in its letter, specify which relief it is requesting. If the contractor fails to make an election in its letter, it will be presumed that the contractor has elected to follow and be bound by the procedural steps and cutoff procedures set forth in STEP ONE and STEP TWO, in that order as follows: (c) The hearing will be held within thirty (30) days of the receipt of the request, unless otherwise ordered by the administrative law judge. (d) At the hearing, the contractor will bear the burden of proof when the action of the commissioner is under sections 1 through 2 of this rule. At the hearing, the contractor shall bear the burden of proof when the action of the commissioner is under either section 3 or 5 of this rule, unless the action involves the reduction of an unexpired certificate of qualification. At the hearing, the department shall bear the burden of proof when the action of the commissioner is under either sections 6 through 8 of this rule or section 11 of this rule. (e) If the contractor fails to follow subsection (b) within the specified time frames, the contractor will be deemed to have accepted the decision of the department as final and deemed to have waived any right to further administrative appeal. (b) A contractor or consultant is entitled to appeal the decision of the commissioner in subsection (a) under the procedures outlined in IC 4-21.5. (c) A contractor or consultant whose certificate is revoked or suspended will not be approved to perform new work of any scope, on any department contract, until a new application for prequalification is approved by the department. Sec. 10.1. (a) A party that is classified as a subcontractor must complete the prequalification or registration process outlined in this rule to be approved to work on a department contract. All subcontractors are subject to review by the prequalification committee. (b) Subcontracts must be approved by the department before work is performed by the subcontractor. Sec. 11. An applicant A contractor or consultant who is convicted of knowingly making a false statement with respect to the applicant's financial worth in an application for qualification, financial statement, or other written instrument filed by the applicant with the department under this rule is not entitled to submit any portion of the prequalification process shall be barred from submitting bids for a period of two (2) years following the date of conviction. Sec. 4. (a) If the bidder's aggregate amount of work is greater than three hundred thousand dollars ($300,000) then the dollar amount set forth in IC 8-23-10, the bidder's bidding capacity with the department on any given date will be determined by deducting the value of all unearned work as of that date on contracts and subcontracts for work of any owner, contractor, or other party from the aggregate rating and from the appropriate classified ratings that are stated on its certificate of qualification. If the bidder's aggregate amount is equal to or less than three hundred thousand dollars ($300,000) the dollar amount set forth in IC 8-23-10, the bidder's bidding capacity with the department on any given date will be determined as the lesser of the value of all unearned work as of that date on: (b) The value of work subcontracted on existing contracts of the department to an approved subcontractor will not be considered as unearned work of the bidder in determining the contractor's bidding capacity. (c) It shall be is the responsibility of each qualified bidder to ensure that a bid submitted for a single contract does not exceed its bidding capacity on the date bids are opened. If the bidder does not limit the sum of its regular bids to the volume of work permitted by its bidding capacity, the department may selectively award low bids up to, but not exceeding, the bidder's bidding capacity. (d) The bidder must show, on the form provided in each proposal bid, the total and type of all unearned work: (e) The commitment of personnel and equipment on a payroll or rental basis for the performance of definite and specific work must be reported as unearned work even though no formal contract may exist. Sec. 5. (a) A bid of two (2) or three (3) contractors will be considered a joint venture. Not more than three (3) contractors will be permitted as parties to a joint venture. All contractors applying for joint venture approval must be prequalified separately. (b) (a) A contractor that is a member of a joint venture may not submit a proposal bid, in its individual capacity or as a participant in another joint venture, for the same contract on which the joint venture bids. (c) The bidding proposal: with each contractor fully responsible for the completion of all contract items. For electronic proposal bids, the joint bidder will be issued a unique vendor identification by the designated electronic medium, and the unique vendor identification shall be used to sign the joint venture. The contractors in the joint venture may combine their individual bidding capacities in order to meet the requirements of section 3 of this rule. A contractor in a joint venture shall have bidding capacity for the work the contractor is to perform. The bid items or the percentage of the bid item to be performed by a contractor in the joint venture must be shown in the proposal bid. The value thereof will be charged to the individual contractor's aggregate and classified bidding capacity. (d) A request for a joint venture is subject to department approval and must be executed on the form prescribed by the department. The form must be: The prescribed form is available on the department's Web site. (e) The bid and performance bond may be executed by a surety for all parties to the joint venture, or a separate bid and performance bond may be executed for each participating contractor. When more than one (1) surety is used, a letter of agreement must be included with the bid and signed by each surety. (b) Current valid prequalification certificate holders participating in a joint venture must consider their current individual capacity as a part of the bidding process. (c) A joint venture where a new entity is created with a separate federal employer identification number must apply for and follow all department requirements for a separate prequalification certificate. Documents Incorporated by Reference: None Received by Publisher