By Gavin Fox, CPA, CCIFP, Director at Blue & Co.

The Indiana Department of Transportation (INDOT) is soliciting public feedback on potential changes to the prequalification process for contractors. Comments on the proposal may be provided at INDOT’s public hearing on Friday, August 21, 2026, at 9:00 AM. The stated goal of these changes is to modernize and simplify the prequalification process for all parties.

Currently, the INDOT prequalification rules generally apply once a contractor seeks to bid on INDOT or public road contracts in excess of $300,000. Contractors are required to annually prequalify by submitting the entity’s financial information, equipment details, technical experience, and other company information.

Under the proposed rule, the core components of prequalification would not change. From a financial perspective, there appear to be at least three significant changes accompanying the proposed rules:

1. Unearned Work Definition and Capacity Implications

The proposal appears to make a significant change to the definition of unearned work that could directly affect contractors’ INDOT bidding capacity. Under current rules, a contractor’s bidding capacity is reduced by unearned work to be performed for all owners, including INDOT and non-INDOT work. If adopted and implemented as drafted in 105 IAC 11-1-33, contractors with substantial non-INDOT work could benefit from an increase in available bidding capacity, as non-INDOT backlog would no longer reduce available INDOT capacity.

2. Tiered Prequalification and Multi-Year Certificates

The proposed changes create “tiers of prequalification” in 105 IAC 11-1-30.1 through 11-1-30.4. Generally, these tiers relate to the level of assurance provided on the contractor’s financial statements.

• • Only tier one and tier two certificates may be issued for a period of up to 24 months
    • Tier one prequalification requires submission of a financial statement audited by a certified public accountant.
    • Tier two prequalification requires submission of a financial statement reviewed by a certified public accountant.
  • Tier three prequalification requires a self-certified, compiled financial statement (no certified public accountant report), but is valid for not more than sixteen (16) months from the year-end date of the financial statement submitted.
  • Tier four prequalification applies to contractors performing less than $300,000 for INDOT, or for hauling, escort services, or railroad flagging.

3. Reporting Requirements Under Multi-Year Certificates

Existing statutes allow certificates of qualification to be valid for up to 24 months. The proposal appears to formalize and further define what maintenance and reporting requirements would entail. For tier one and tier two contractors (those with certificates valid for more than 12 months), a new requirement to submit an annual prequalification update, as determined by the department, has been inserted into 105 IAC 11-2-3.1(c) to confirm their continued eligibility for prequalification.

In addition, several new reporting requirements and timelines are created for significant financial or equipment changes and company information changes (address, name, ownership, etc.), each with a 30-day reporting period.

In practical terms, a multi-year certificate would reduce the need for a complete renewal application only because 12 months have passed, but it would not eliminate annual compliance reporting or timely reporting of material business changes.

These proposed changes are not final, but they could materially affect how contractors determine their available bidding capacity, select an appropriate prequalification tier, and maintain INDOT certification. While the Indiana statutes have provided the avenue for multi-year certifications for many years, it appears INDOT is updating the groundwork for this option to become a reality. If you have questions about the INDOT prequalification process or these potential changes, please reach out to your Blue & Co. advisor and participate in INDOT’s upcoming public hearing.