WSR 98-23-019

PROPOSED RULES

DEPARTMENT OF TRANSPORTATION

[Filed November 9, 1998, 8:25 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 98-17-036.

Title of Rule: Chapter 468-310 WAC, Prequalification of ferry system contractors.

Purpose: The purpose of these amendments is to allow contractors who bid on ferry terminals, other marine facilities, and highway construction projects to be prequalified under one rule, chapter 468-16 WAC. Other minor revisions were made to clarify procedures for determining qualifications of contractors for performing marine vessel construction contracts.

Statutory Authority for Adoption: RCW 47.60.680, 47.60.690.

Statute Being Implemented: RCW 47.60.680, 47.60.690.

Summary: These changes establish procedures for determining the qualifications of contractors for the performance of marine construction projects and allows the use of work class ratings established for contractors that is prequalified under chapter 468-16 WAC.

Reasons Supporting Proposal: To implement statutory provisions for implementing the qualification process.

Name of Agency Personnel Responsible for Drafting: Ken Walker, 1D21 Transportation Building, (360) 705-7017; Implementation and Enforcement: Paul L. Green, Colman Dock/Pier 52, (206) 515-3401.

Name of Proponent: Washington State Department of Transportation, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: The proposed changes makes minor revisions to allow contractors who bid on ferry terminals, other marine facilities, and highway construction projects to be prequalified under one rule, chapter 468-16 WAC. Other minor revisions were also made to clarify procedures for determining qualifications of contractors for performing marine vessel construction contracts.

Proposal Changes the Following Existing Rules: The rule codifies existing and new procedures for prequalification and the issuance of bid proposal documents to qualified contractors. It deletes the requirement for the contractor to submit, for each contract they intend to submit a bid, a certificate of their current capacity which will be accompanied and supported by a status of contracts on hand report. It also deletes classes 6 through 10 to allow the use of work class ratings established for contractors that is prequalified under chapter 468-16 WAC which implements RCW 47.28.070.

No small business economic impact statement has been prepared under chapter 19.85 RCW. A small business economic impact statement is not required. The cost of prequalification under the proposed rules would impose no greater cost than would occur in compliance with our current prequalification process.

RCW 34.05.328 does not apply to this rule adoption.

Hearing Location: Commission Boardroom 1D2, Transportation Building, 310 Maple Park Avenue S.E., Olympia, WA 98504-7360, on January 8, 1999, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact TDD (360) 705-6980, by January 6, 1999.

Submit Written Comments to: Ken Walker, Manager, Preconstruction Office, P.O. Box 47360, Olympia, WA 98504-7360, fax (360) 705-6810, by January 6, 1999.

Date of Intended Adoption: January 8, 1999.

November 4, 1998

Gerald E. Smith

Deputy Secretary, Operations

OTS-2610.1

AMENDATORY SECTION (Amending Order 84, filed 9/12/83)

WAC 468-310-010  General requirements. Contractors desiring to offer bids for the performance of contracts for the construction, improvement or repair of a ferry((, ferry terminal, or other facility)) operated by the Washington state ferries or for the repair, overhaul, or the dry-docking of any ferry operated by Washington state ferries must first be prequalified by the Washington state department of transportation (hereinafter "department") and shall file a standard prequalification questionnaire and financial statement (hereinafter "prequalification questionnaire") using forms furnished by the department. Contractors desiring to offer bids for the performance of contracts for the construction, improvement, or repair of ferry terminal facilities shall submit for consideration a prequalification questionnaire (DOT form 420-010) in accordance with chapter 468-16 WAC. The prequalification questionnaire shall include a report of the financial ability of the contractor, its organization, key personnel, equipment and plant facilities, and experience. Complete answers to all questions and the furnishing of all information as indicated by column headings or otherwise throughout the prequalification questionnaire are an essential part of compliance with these rules. A prequalification questionnaire from a contractor not previously prequalified under these rules, who desires to bid on a project must be received no later than 15 calendar days prior to the bid opening (or such other time as the department may specify with respect to any project) in order to receive consideration for that bid opening. The contractor shall authorize the department to obtain all information which it may deem pertinent with respect to the contractor's financial worth, assets and liabilities, and the adequacy of its performance of contracts performed by the contractor in whole or in part within the preceding three years. The department shall issue a certificate of prequalification to any contractor found to possess the qualifications prescribed.

Prequalification may be established in any calendar quarter and is renewable annually. ((The)) Information submitted in the prequalification questionnaire will be used to establish the ((first)) initial prequalification, classification and maximum capacity ratings of the contractor for its current fiscal year or remaining portion thereof plus one additional calendar quarter. ((Thereafter)) Prequalification will be renewed ((and when appropriate, modified in the first quarter of the contractor's fiscal year for the balance of the fiscal year plus one calendar quarter)) annually thereafter or at other times as designated by the department.

The department shall not make available for public inspection and copying financial information supplied by or on behalf of the contractor for the purpose of qualifying to submit a bid or proposal as provided herein. The foregoing restriction shall not, however, prohibit the department from giving such information in evidence or in pretrial discovery in any court action or administrative hearing involving the department and the contractor.

The department may at any time during which the certificate of prequalification is in effect demand a new prequalification questionnaire and if the same is not provided within sixty days of the date of request, the certificate of prequalification held by the contractor will be considered forfeited and the contractor will not be permitted to bid on contracts let by the department for those classes of ferry system construction or repair enumerated in ((subsection (8) of section 5)) WAC 468-310-050(6) until ((such)) a new statement has been received by the department.

If at any time during the valid period of the certificate of prequalification the latest prequalification questionnaire on record with the department ceases to represent fairly and substantially the financial position or the equipment and plant facilities of the contractor to whom the certificate was issued, it shall be the responsibility of that contractor to so notify the department and to refrain from further bidding on ferry system construction or repair contracts until ((his)) their prequalification has been confirmed or revised. Failure to give such notice will constitute a violation of these rules.

Qualified contractors shall be notified of impending expiration of their qualification and will be provided the necessary questionnaire forms for renewal at least forty-five days before the expiration date.

The department reserves the right to require a personal interview with any contractor when considering ((his)) their qualifications.

[Statutory Authority: 1983 c 133. 83-19-014 (Order 84), § 468-310-010, filed 9/12/83.]

AMENDATORY SECTION (Amending Order 114, filed 9/14/88)

WAC 468-310-020  Contents of standard prequalification questionnaire and financial statement. The standard prequalification questionnaire and financial statement shall be ((prepared in duplicate. The original shall be)) transmitted to the ((assistant secretary for marine transportation and a copy shall be retained by the contractor applicant)) director of Washington state ferries. The contractor shall provide the following information:

(1) The name, address, phone number, contractor registration number and type of organization (corporation, copartnership, individual, etc.) of the contractor seeking prequalification.

(2) The contract size in dollars and the class or classes of work for which the contractor seeks prequalification (such as vessel dry-docking and hull repairs, vessel electrical repairs, etc.) as enumerated in ((subsection (8) of)) WAC 468-310-050(6).

(3) Ownership of the contractor and if a corporation, the name of the parent corporation (if any) and any affiliated companies or subsidiaries.

(4) An accurate and complete record of the ((15)) fifteen largest contracts in excess of (($10,000)) ten thousand dollars performed by the contractor in whole or in part within the preceding three years both in Washington and elsewhere, including subcontracts, giving the contract amount, the date completed, the class of work, the name, address and phone number of the owner/agency representative, and any liquidated damages assessed against the contractor by an owner arising out of the performance of the contract.

(5) The principal officers and key employees showing the number of years each engaged in the class or classes of work for which the contractor seeks prequalification. The department may require resumes of ((the principal officers and key employees of any contractor seeking prequalification certification for work in excess of $1,000,000)) such personnel as deemed proper for making its determination.

(6) A contractor requesting prequalification certification to perform work in excess of (($10,000,000)) ten million dollars shall submit copies of its audited annual statements for the previous three years as audited by an independent certified public accountant which shall include comparative balance sheets and income statements, a statement of retained earnings, supporting schedules and notes attached thereto, and the opinion of the independent auditor. The financial statement shall not be more than ((12)) twelve months old when submitted. Any wholly owned subsidiary corporation may file the latest consolidated financial statement of its parent corporation in lieu of a financial statement prepared solely for such subsidiary providing the financial statement otherwise meets the requirements of the preceding two sentences. If a consolidated financial statement is filed on behalf of a subsidiary corporation, a bid of the subsidiary corporation will be considered only if there is on file with the department a letter from the parent corporation guaranteeing performance by the subsidiary corporation of its contract with the department of transportation in an amount at least equal to the amount of the bid. A letter of guarantee by a parent corporation may cover a specific contract bid by its subsidiary or all contracts bid by its subsidiary within a stated period of time.

(7) A list of all major items of equipment to be used in those classes of work for which prequalification certification is requested including the original cost, age, location and condition of such equipment. The schedule shall show whether the equipment is owned, leased or rented. All major items of useful equipment should be listed even though fully depreciated but no obsolete or useless equipment should be included. In the event the contractor seeks prequalification certification to perform work on ferry vessels, the schedule shall also describe plant facilities of the contractor including shipyards, dry docks, repair facilities and other plant facilities.

(8) Such other information as may be required by the prequalification questionnaire.

[Statutory Authority: RCW 47.60.680. 88-19-040 (Order 114), § 468-310-020, filed 9/14/88. Statutory Authority: 1983 c 133. 83-19-014 (Order 84), § 468-310-020, filed 9/12/83.]

AMENDATORY SECTION (Amending Order 114, filed 9/14/88)

WAC 468-310-050  Classification and capacity rating. (1) Each contractor seeking prequalification under these rules will be classified for one or more of the classes of work listed in subsection 8 of this section and will be given a maximum capacity rating in accordance with its financial ability, the adequacy of its equipment and plant facilities to perform the class or classes of work for which it has sought prequalification, the extent of the contractor's experience in performing contracts of the class or classes for which prequalification is sought, and the adequacy of the experience and capability of the contractor's officers and key employees in performing contracts of the class or classes for which prequalification is sought. The maximum capacity rating will limit the quantity of uncompleted work which the contractor shall have under contract at any one time either as a prime contractor or a subcontractor.

(2) The maximum capacity rating for a contractor applying for a rating in excess of (($50,000)) fifty thousand dollars will be ten times the contractor's net worth as set forth in the standard prequalification questionnaire and financial statement. A properly executed letter of credit from an acceptable financial institution may be considered as an asset increasing the contractor's maximum capacity rating by the amount of the credit, but without the use of a multiplier. The maximum capacity rating for a contractor not submitting an audited financial statement as provided in ((subsection (6) of)) WAC 468-310-020(6) will be (($10,000,000)) ten million dollars: Provided, That in all cases the contractor's maximum capacity rating may be reduced to an amount considered by the department to be within the contractor's actual capacity based upon its organization, personnel, equipment and plant, and experience.

(3) Consideration will be given to raising, by an amount not to exceed 50 percent, the maximum capacity rating of a contractor who qualifies with respect to actual capacity based upon organization, personnel, equipment and plant facilities, and experience, upon receipt of evidence of a current bonding capacity of such additional amount with a corporate surety. Such evidence shall be in the form of a letter of commitment executed by an officer of the surety who is authorized to bind the surety. Notwithstanding the provisions of this subsection, the maximum capacity rating for a contractor not submitting an audited financial statement as provided in ((subsection (6) of)) WAC 468-310-020(6) will be (($10,000,000)) ten million dollars.

(4) The certificate of prequalification issued by the department will establish a contractor's maximum capacity rating which will be subject to reduction by the total value of its current uncompleted work regardless of its location and with whom it may be contracted to determine the contractor's bidding capacity at the particular time. ((This bidding capacity shall be called "current capacity."))

(5) ((In determining the current capacity of a contractor, the deduction for uncompleted work will include work subcontracted from others and the contractor will be given a credit for work sublet to others.

(6) In order that the department may have the necessary information to determine a contractor's current capacity, the contractor shall submit to the department for each contract for which it intends to submit a bid (at the time it requests a bid or proposal form) a certificate of the contractor's current capacity which will be prepared by it and executed under oath and which will be accompanied and supported by a status of contracts on hand report. In making this certification, the contractor certifies that its current capacity is sufficient to cover the amount of any single contract for which it has submitted a bid.

(7))) Notwithstanding the provisions of this section, a contractor will be allowed to submit a bid for an amount up to $50,000 on a class or classes of work for which it is prequalified without regard to any financial maximum capacity rating or financial current capacity rating: Provided, That the contractor's current capacity may be reduced to an amount considered by the department to be within the contractor's actual capacity based upon its organization, personnel, equipment and plant facilities, and experience.

(((8))) (6)(a) Construction, repair and maintenance work on ferry vessels ((and main ferry terminal buildings)) for which prequalification certification under these rules may be granted are classified as follows:

Class ((1)) 81 Vessel construction and renovation;

Class ((2)) 82 Dry-docking and hull repairs;

Class ((3)) 83 Vessel metal fabrication repairs;

Class ((4)) 84 Vessel electrical repairs;

Class ((5)) 85 Vessel miscellaneous repairs;

((Class 6 New terminal building construction and terminal building major reconstruction and remodeling;

Class 7 Terminal building renovation and repairs;

Class 8 Painting (terminals only);

Class 9 Roofing (terminal buildings only);

Class 10 Terminal structures - miscellaneous, including pile driving.))

(b) A contractor currently prequalified under RCW 47.28.070 to perform those classes of work required in the construction, improvement and repair of ferry terminal facilities (((other than main terminal buildings))) will initially be deemed prequalified under these rules to perform such classes of work with the same capacity rating as approved by the department for highway related work.

[Statutory Authority: RCW 47.60.680. 88-19-040 (Order 114), § 468-310-050, filed 9/14/88. Statutory Authority: 1983 c 133. 83-19-014 (Order 84), § 468-310-050, filed 9/12/83.]

AMENDATORY SECTION (Amending Order 84, filed 9/12/83)

WAC 468-310-060  Review of restrictions in prequalification certificate. Any contractor dissatisfied with restrictions on the dollar amount or class of work approved in its prequalification certificate may ((file a complaint)) request in writing, a review of their questionnaire and qualification rating with the ((assistant secretary for marine transportation)) director of Washington state ferries together with supporting documentation. The request must be filed within thirty calendar days of the date of receipt of the notice of qualification and must specifically state the basis for the request. The ((assistant secretary)) director or ((his)) designee shall ((review any such complaint and any data furnished by the contractor and may affirm or modify such restrictions in the prequalification certificate)) advise the applicant of his or her decision of the reconsideration within thirty calendar days of receipt of the request.

[Statutory Authority: 1983 c 133. 83-19-014 (Order 84), § 468-310-060, filed 9/12/83.]

AMENDATORY SECTION (Amending Order 84, filed 9/12/83)

WAC 468-310-100  Delegation of authority. The ((assistant secretary for marine transportation)) director of Washington state ferries is delegated authority to administer the provisions of chapter 133, Laws of 1981 and chapter 468-310 WAC. The ((assistant secretary for marine transportation)) director of Washington state ferries is delegated authority to exercise all powers vested in the secretary of transportation by WAC 468-10-234 relating to the adoption of a final order granting, denying or revoking a prequalification certificate pursuant to chapter 133, Laws of 1983. The ((assistant secretary for marine transportation)) director of Washington state ferries may further subdelegate authority to exercise all powers vested in the secretary of transportation by WAC 468-10-234. A person to whom such authority is subdelegated shall be deemed to be the designee of the secretary of transportation as that term is used in WAC 468-10-234.

[Statutory Authority: 1983 c 133. 83-19-014 (Order 84), § 468-310-100, filed 9/12/83.]