N.J. Admin. Code § 16:44-3.7

Current through Register Vol. 56, No. 12, June 17, 2024

Section 16:44-3.7 - Determination of financial capability

(a) Financial capability of a contractor will be determined by the Department based on its examination of the following:

1. The contractor's net working capital. Net working capital is, as used in this chapter, defined as the excess of current assets over current liabilities and identifies the relatively liquid portion of total enterprise capital, which constitutes a margin for meeting obligations within the ordinary operating cycle of the business. The Department will use the contractor's net worth, as shown in the balance sheets, in lieu of the contractor's net working capital whenever the net worth is less than its net working capital;

2. Net book value of construction equipment less the amount of any outstanding loans for the purchase of that equipment will equal the amount allowed; and

3. Unsecured lines of credit in accordance with the Questionnaire.

(b) The contractor's financial capacity will be determined by the Department according to the following calculation:

Financial capability = (net working capital or net worth x 15) + (net book value of construction equipment less the value of any outstanding loans x 15) + (unsecured lines of credit in accordance with the Questionnaire x 7).

N.J. Admin. Code § 16:44-3.7

New Rule, R.1992 d.29, effective 1/6/1992.
See: 23 N.J.R. 3270(a), 24 N.J.R. 115(c).
Old section "Notice of classification" was recodified to 1.19.
Amended by R.1994 d.198, effective 4/18/1994.
See: 25 N.J.R. 4727(a), 26 N.J.R. 1690(b).
Amended by R.1999 d.113, effective 4/5/1999.
See: 31 N.J.R. 29(a), 31 N.J.R. 890(a).
Rewrote (b)2.
Amended by R.2004 d.342, effective 9/7/2004.
See: 36 N.J.R. 1659(a), 36 N.J.R. 4155(b).
Rewrote (b); in (c), inserted "and as actually performed by the contractor" following "performance rating" in 1 and deleted "of Transportation" following "Department" throughout.
Recodified from N.J.A.C. 16:44-1.5 and amended by R.2010 d.122, effective 6/21/2010.
See: 41 N.J.R. 3387(a), 42 N.J.R. 1239(a).
Section was "Rating system". Rewrote the section.