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Indiana Department of Transportation Prequalification Changes

The Indiana Department of Transportation (INDOT) is in the process of updating capacity ratings and related financial requirements originally adopted in 1991. The new rating limits intend to reflect current economic conditions. This will mean more opportunities on INDOT contracts for construction companies not meeting financial requirements of previous limits AND increased competition for currently prequalified contractors.

The proposed changes were attached to a House bill signed by the governor, but have not completed the approval process to be implemented. Implementation could occur in time for certificate renewals in 2021.

A summary of the changes in the capacity rating thresholds is provided below:

Required CPA Level of ServicePreviousConsidered
Audited Statements$1,000,000 or Greater$2,500,000 or Greater
Reviewed Statements$300,000 to $999,999$1,000,000 to $2,499,999
Self-Certified by an OfficerUp to $299,999Up to $999,999

 

While this change presents opportunities for smaller construction firms to perform more INDOT work, it also changes the risk profile of the available subcontractor base.

A change to the maximum duration of a certificate of qualification from 12 months to 24 months is also in process. Even though certificate duration may be extended, a company will likely have to submit annual financial statements in non-renewal years to demonstrate the financial position of the company has not dramatically changed.

If you have any questions regarding these proposed changes or other matters related to INDOT regulations, do not hesitate to contact Damien Strohmier or your local Blue & Co. representative.

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