N.J. Admin. Code § 17:19-2.8

Current through Register Vol. 56, No. 11, June 3, 2024

Section 17:19-2.8 - Aggregate rating

(a) The aggregate rating of a firm shall be based on the following factors:

1. The firm's working capital reported in its financial statement;

2. The firm's FPPE, as described in 17:19-2.5;

3. The firm's bonding capacity, as described in 17:19-2.9; and

4. All other factors, as described in 17:19-2.4(b).

(b) Working capital shall be determined according to generally accepted accounting principles (defined as current assets minus current liabilities), but shall not include:

1. Any assets not in the name of the firm;

2. Any past due accounts exceeding one year;

3. Any fixed assets, including, but not limited to, buildings, land or furniture. However, the net book value of owned construction equipment (excluding automobiles) may be used to supplement the contractor's net working capital calculation. The value of this equipment must be based on the same date as information provided in the financial statement submitted with the application. This information shall be provided through the schedule included in the DPMC-27;

4. Any assets not realizable within one year;

5. Securities that have been pledged; and

6. Any line of credit: The exception to this deduction is a working capital line of credit issued by a certified lending institution. The line of credit must be solely used for the purposes of the business as it relates to construction contracting. A copy of all pertinent lending covenants and agreements must be attached to the financial statement, along with a full explanation of all outstanding liabilities as of the date of the notarized certification on the DPMC-27 against the line of credit. If the line of credit meets the above criteria, 100 percent of the unused line will be added to the working capital calculation.

(c) The firm's aggregate rating shall be calculated as follows:

1. Multiply the firm's working capital according to the following table:

Working Capital	Asset Multiplier
1 to $ 500,000	12
$ 500,001 to $ 1,500,000	14
$ 1,500,001 to $ 3,000,000	16
$ 3,000,001 or higher	18

2. Multiply the result of this calculation by the FPPE multiplier:

FPPE	FPPE Multiplier
80.0 percent or higher	1.00
70.0 percent to 79.9 percent	0.50
69.9 percent or lower	0.25

EXAMPLES: The following examples show the effect of a FPPE multiplier for a firm having (1) an FPPE of 80.0 percent or higher and (2) an FPPE of 70.0 percent to 79.9 percent.

A = Working Capital

B = Asset Multiplier

C = Preliminary Aggregate Rating (A*B)

D = Performance Multiplier

E = Aggregate Rating

(Formula) (A * B) * D = E

(1) $ 85,000 * 12 = $ 1,020,000 * 1.00 = $ 1,020,000

(2) $ 85,000 * 12 = $ 1,020,000 * 0.50 = $ 510,000

3. If a firm has not received an FPPE, a performance multiplier will be based upon information received by the DPMC during the review of project references.

4. When the firm's FPPE is less than 69.9 percent, the Director may reject the application or assign an aggregate rating less than that provided for in this section, based on all factors relevant to the firm's ability to perform.

N.J. Admin. Code § 17:19-2.8

Amended by R.2000 d.76, effective 2/22/2000.
See: 31 N.J.R. 4237(a), 32 N.J.R. 712(a).
In (a), rewrote the last sentence; and in (b), substituted a reference to PMC-27 for a reference to GSA-27.
Amended by R.2008 d.363, effective 12/1/2008.
See: 40 N.J.R. 3959(a), 40 N.J.R. 6825(a).
In the introductory paragraph of (a), deleted the former first sentence and inserted "of a firm"; in (a)2, substituted "FPPE" for "performance rating"; in (a)3, deleted "and" from the end; deleted former (a)4 and (c); recodified former (a)5 as (a)4 and (d) as (c); rewrote (b)3; in (c)2, substituted "FPPE" for "performance" and a colon for "based upon at least three projects completed in the last five years."; in the (c)2 table headers, substituted "FPPE" for "Average Performance Evaluations (APE)" in the first column and "FPPE" for "Performance" in the second column; in the (c)2 EXAMPLES, substituted "FPPE" for "performance" once and "APE" twice in the first sentence, in definition for "C", inserted "(A*B)", in the Formula, substituted " (A * B) * D = E" for "A x B = C and C x D = E", in the two examples, substituted "(1)" for "1.", "(2)" for "2.", and an asterisk for "x" four times; in (c)3, substituted "an FPPE" for "a State performance evaluation" and inserted "the" preceding "DPMC"; and in (c)4, substituted "FPPE" for "APE".