New Jersey Administrative Code
Title 16 - TRANSPORTATION
Chapter 44 - CONSTRUCTION SERVICES
Subchapter 3 - CLASSIFICATION OF PROSPECTIVE BIDDERS
Section 16:44-3.7 - Determination of financial capability
Universal Citation: NJ Admin Code 16:44-3.7
Current through Register Vol. 56, No. 18, September 16, 2024
(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).
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