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Follow the Successful Path to Prequalification

Written by 

John Obr

Texas Department of Transportation

As we work together to create a safe and reliable transportation system for Texas, the Texas Department of Transportation (TxDOT) strives to partner with contractors who achieve high-quality results for the best value. We have a long history working with AGC members to accomplish that goal.

Prequalification ensures that financially sound companies with proven track records are competing for Texas transportation projects large and small. It’s the first step in the process of letting a job to the right company for highway improvements, construction, and maintenance.

TxDOT currently prequalifies 1,800 bidders, and we want your prequalification process to go smoothly. The department has two types of prequalification: Full Prequalification and the Bidder’s Questionnaire.

Full Prequalification: A bidder must submit a Confidential Questionnaire and an audited financial statement prepared by an independent Certified Public Accountant (CPA). The accountant must practice through a CPA firm and must be considered independent according to provisions in state law such as no direct or indirect financial interest to the contractor. To receive bidding documents, prequalified firms must have bidding capacity equal to or exceeding the engineer’s project cost estimate. Bidding capacity is typically set at approximately twenty times the company’s net working capital.

Bidder’s Questionnaire: For some small construction, maintenance, and special projects, the Full Prequalification is waived, and a Bidder’s Questionnaire is required. Proposal requests on the department’s website reflect a “w” next to waived projects. In order to bid on a waived project, the prequalified firm also must have an available bidding capacity equal to or greater than the estimated project cost.

Mark your calendars. Here are two important deadlines to remember.

One year with a ninety-day grace period: Both Full Prequalification and Bidder’s Questionnaires are valid for one year from the date of the financial statements with a ninety-day grace period. If no financial statements are submitted with the Bidder’s Questionnaire, the deadline is one year from the date received by the department with a ninety-day grace period.

Ten days before the next letting: Prequalification documents are due to the department no less than ten days before the second day of the next letting. At least ten days are necessary for department staff to have sufficient time to review the prequalification documents.

Prequalification of contractors for Local Government projects is necessary prior to bidding. When utilizing federal or state funds, Local governments may require bidders to be prequalified by TxDOT, or the Local Governments may prequalify bidders if their prequalification procedures have been approved by TxDOT prior to advertising and receiving bids.

Confidential and Bidder’s Questionnaires, as well as Accounting Procedures in Determination of Contractor’s Financial Resources (Bulletin No. 2), are available on the TxDOT website. It is important for your independent CPA firm to become familiar with prequalification financial requirements and deadlines. For more information on prequalification, you can contact the TxDOT Contract Letting Branch at 512.416.2540.

For experienced TxDOT partners, I hope this review of the prequalification process is useful. For contractors submitting prequalification documents to the department for the first time in 2012, welcome and we look forward to working with you in the future.

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