San Diego Contractor Prequalification Program Overview

Public Works Department in San Diego has a Prequalification Program for contractors since 2002, designed to ensure firms meet financial criteria and are approved prior to bidding on public works contracts. The program has levels based on project size, with renewal every two years. Experience as a subcontractor doesn't guarantee success as a prime contractor, and newer firms may face challenges with administrative requirements and financial resources. An Improved Prequalification Program was launched in 2016 with additional levels based on project size.

• San Diego
• Contractor Prequalification
• Public Works Department
• Construction Contracts
• Financial Resources

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Presentation Transcript

1. City of San Diego Contractor Prequalification Program Citizens Equal Opportunity Commission Citizens Equal Opportunity Commission February 21, 2017 February 21, 2017

2. Public Works Department Prequalification Program Prequalification program has been in effect since 2002 Revised and improved in 2008 (Phase II) Program follows rules established by: Municipal Code 22.3004 Contractor Standards which requires that firms: Have sufficient financial resources in accordance with CA Labor Code, Submit the documentation as part of a prequalification process; and, Be approved by the City prior to bidding on a public works contract.

3. Public Works Department Previous Prequalification Program Applies to all construction contracts Three levels of prequalification based on project size $0 to $1,000,000 $1,000,000 to $15,000,000 Over $15,000,000 Once prequalified, renewal is every two years

4. Public Works Department Previous Program Small Projects ($0 to $1,000,000) ELBE/SLBE certified firms may become eligible to bid as a prime simply by submitting a bond letter No additional project references required No additional financial information required Maximum Bidding Capacity (MBC) capped by single- project bonding limit or $1,000,000 whichever is less

5. Public Works Department Prequalification Issues Experience as a subcontractor does not necessarily foreshadow success as a prime contractor Experience on private construction projects does not reliably translate into success on public works projects Smaller or newer firms often lack the staffing or resources to successfully cope with the City s administrative requirements Smaller or newer firms are often not sufficiently capitalized to cope with potential delays in payment or restricted cash flow

6. Public Works Department Improved Prequalification Program Effective October 1, 2016 Applies to all construction contracts (no change) Three new levels of prequalification based on project size $0 to $500,000 o $500,000 to $15,000,000 o Over $15,000,000 o Renewal every two years (no change) o

7. Public Works Department Improved Prequalification Program (cont d) ELBE/SLBE Certified Firms must provide the following to become prequalified to bid as a prime contractor: o Evidence of completion of either three City of San Diego public works projects as a subcontractor or three projects for other agencies as either a subcontractor or a prime contractor in the previous three years (new requirement) o Current compiled, reviewed or audited financial statement prepared by an independent accountant which demonstrates both positive working capital and positive net worth (self-generated statement not acceptable) o Current letter from a surety stating the firm s single-project and aggregate bonding limits (no change) o ELBE/SLBE-certified firms MBC will be capped at $500,000 or single-project bond limit, whichever is less (down from $1 million) Prequalification program changes do not change the SLBE certification process!

8. Public Works Department ELBE/SLBE Program Enhancements SLBE-certified firms only may become prequalified at a higher level by submitting the standard prequalification application Currently prequalified ELBE/SLBE firms are grandfathered into the program until their next renewal date so long as their work on City projects is rated as satisfactory or better. The City has developed a training program to assist ELBE/SLBE firms who wish to become prime contractors to better understand the City s contracting process. Attendance is mandatory for firms which have not previously completed a public works project as a prime contractor.

9. Public Works Department Outreach Efforts CEOC o 9/2/15 and 10/7/15 Construction Industry Quarterly Meeting o 10/15/15, 2/18/16, 11/8/16 Construction Industry Workshops o 10/29/15, 11/6/15, 12/1/16 SLBE Quarterly Meeting o 11/18/15, 3/16/16, 7/7/16, 11/16/16

10. Public Works Department QUESTIONS ???