Wash. Admin. Code § 468-16-140 - Maximum capacity rating
(1)
The maximum capacity rating shall be determined by multiplying the contractor's
reported net worth by a factor of 5.0. The factor may be increased at a rate of
0.5 annually, provided the contractor has maintained a satisfactory performance
record with the department and has completed a contract of fifty thousand
dollars or more within the preceding prequalification year. The maximum factor
shall be 7.5. The department may at any time decrease the rating factor if the
contractor's performance becomes less than standard, however no decrease in the
bidding capacity will become effective until action to appeal, as specified in
these rules, has been completed.
(2) For the purpose of prequalification and
establishing the maximum capacity rating, the following additional resources
may be added to net worth if supported with documentation as specified:
(a) An operating line of credit -
Documentation from an acceptable financial institution stating the amount of
credit authorized, its expiration date, and the amount currently available. The
document must be authenticated by an official authorized to execute lines of
credit on behalf of the institution. Should the operating line of credit be
revoked, it shall be deducted before computing a new annual maximum capacity
rating.
(b) A parent firm guarantee
of net worth - A sworn statement from the parent firm that guarantees the
performance of the subsidiary for any contracts awarded it. The document shall
include a parent firm guarantee in an amount such that when calculated in
subsection (1) of this section will not be less than the value of uncompleted
contracts of the subsidiary. An audited financial statement, as prescribed in
WAC 468-16-090(9),
may be requested from the parent firm when deemed appropriate.
(3) Resources listed above will
not be accepted in lieu of a minimum net worth of fifty thousand
dollars.
(4) For the purpose of
prequalification and establishing the maximum capacity rating, a bidding
company which has established a leveraged ESOP (Employee Stock Ownership Plan)
may use, in place of its net worth, the lesser of:
(a) The company's net worth, as adjusted by
eliminating any contra-equity or unearned compensation entry in the net worth
section of the balance sheet which is directly related to the ESOP loan;
or
(b) The company value as
established by the company's most recent valuation for ESOP purposes provided
the valuation was performed within the last twelve months which meets federal
guidelines for ESOP-related valuations. The department may require submission
of a copy of this valuation report for documentation purposes.
(5) When the value of a firm's
uncompleted work for the department exceeds its maximum capacity rating, a
bidding proposal shall be denied that firm.
Notes
Statutory Authority: RCW 47.01.101, 47.28.030 and 47.28.070. 97-09-045 (Order 168), § 468-16-140, filed 4/15/97, effective 5/16/97; 93-03-020 (Order 134), § 468-16-140, filed 1/12/93, effective 2/12/93; 91-04-014 (Order 128), § 468-16-140, filed 1/28/91, effective 2/28/91.
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