Standardized forms developed by the Department of Industrial Relations (DIR) are now available on the Internet for use by public agencies in any prequalification process. Assembly Bill 574, enacted in 1999, allows public agencies such as cities, counties and special districts, to require contractors that wish to bid for public works jobs to “prequalify” for the right to bid. (See Public Contract Code § 20101.) Similar authority for school districts regarding prequalification was enacted several years before Assembly Bill 574. (See Public Contract Code § 20111.5.) Both Public Contract Code section 20111.5 (schools) and Public Contract Code section 20101 (cities, counties, special districts) allow a public agency to establish two different kinds of prequalification procedures for public works projects. A prequalification procedure may concern a single project, or the public agency may adopt a procedure by which a contractor may qualify to bid on projects which are put out for bid by that agency for a one-year period.
Every public agency that creates either kind of prequalification procedure must: 1) use a standardized objective questionnaire and financial statement in a form specified by the public entity, and 2) adopt and apply a uniform set of rating bidders on objective criteria, on the basis of the completed questionnaires and financial statements. Only cities, counties and special districts are required by statute to create an appeal procedure, by which a contractor that is denied prequalification may seek a reversal of that determination. However, we recommend that school districts that utilize the prequalification process also institute an appeal process. Assembly Bill 574 also required that DIR develop a standardized questionnaire that public agencies may use to develop guidelines for rating bidders. The standardized questionnaire and related documents developed by DIR can now be found at the DIR website, www.dir.ca.gov. These documents were created specifically for use by cities, counties, and special districts but they could be modified for use by other public agencies such as school districts. However, we recommend that any public agency obtain the advice of counsel before utilizing these documents.