Alabama Code 23-1-56. Contracts to do work – Qualification of bidders

(a) Prequalifications of contractors. The Director of Transportation shall require all bidders to furnish a statement under oath, on such forms as the State Department of Transportation may prescribe, of detailed information with respect to their financial resources, equipment, past record, and experience of both the firm and personnel of the organization, together with such other information as the State Department of Transportation may deem necessary for carrying out the provisions of this chapter. Such forms shall include a financial statement actually prepared by a certified public accountant (C.P.A.) or any independent licensed public accountant approved by the Alabama State Department of Transportation, an inventory of equipment listing its location and book value, a listing of material and equipment houses with whom a line of credit is established as well as those firms from whom principal materials and equipment have been purchased during the past three years, a listing of completed construction projects and bonding companies with whom business has been done for the past three years, and a combined statement of the applicant that includes other wholly owned or substantially owned interest, as well as any other pertinent information required by the State Department of Transportation. Should the applicant’s financial statement fail to substantiate the limits required, further consideration may be given to the present market value in lieu of book value of listed assets when properly supported with substantiating evidence. A statement of an independent licensed public accountant shall not be required for the issuance of certificates under $50,000.00.

Attorney's Note

Under the Alabama Code, punishments for crimes depend on the classification. In the case of this section:

Class	Prison	Fine
Violation	up to 30 days	up to $200

For details, see Ala. Code § 13A-5-7

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Terms Used In Alabama Code 23-1-56

Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
Appellate: About appeals; an appellate court has the power to review the judgement of another lower court or tribunal.
Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
circuit: means judicial circuit. See Alabama Code 1-1-1
Contract: A legal written agreement that becomes binding when signed.
Conviction: A judgement of guilt against a criminal defendant.
Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
following: means next after. See Alabama Code 1-1-1
Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
person: includes a corporation as well as a natural person. See Alabama Code 1-1-1
state: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Alabama Code 1-1-1
Subpoena: A command to a witness to appear and give testimony.
writing: includes typewriting and printing on paper. See Alabama Code 1-1-1
year: means a calendar year; but, whenever the word "year" is used in reference to any appropriations for the payment of money out of the treasury, it shall mean fiscal year. See Alabama Code 1-1-1

(b) Furnishing forms; certificate of qualification. Any bidder desiring to submit a bid for the performance of any contract or contracts which the State Department of Transportation proposes to let shall apply to the State Department of Transportation for qualifications and shall use for that purpose the form prescribed and furnished by the State Department of Transportation. The State Department of Transportation shall be required to act promptly upon the application for qualification and must act thereon within 30 days after the same is presented to them. Upon the receipt of any application for qualification, the State Department of Transportation shall cause the same to be examined and the statements therein to be verified and shall, thereupon, determine whether the applicant is competent, responsible, and possesses the financial resources which satisfy the terms of this chapter. If the applicant is found to possess the qualifications prescribed by this chapter and by the rules and regulations promulgated by the State Department of Transportation, the State Department of Transportation shall issue to him a certificate of qualification, which shall be valid for a period of one year or such shorter period of time as the State Department of Transportation may prescribe, unless thereafter revoked by the State Department of Transportation for cause as provided in subsection (c) of this section. The certificate of qualification shall contain a statement fixing the actual amount of work in terms of estimated cost which the applicant will be permitted to have on contract with the State Department of Transportation and not completed at any one time. Such certificate of qualification shall authorize the holder to bid on all work on which bids are taken by the State Department of Transportation during the period of time therein specified.

(c) Revocation of certificate. A certificate of qualification may be revoked by the State Department of Transportation only after notice to the qualified bidder and an opportunity to be heard. The notice shall be in writing and shall state the grounds of the proposed revocation and may be served by any sheriff of the State of Alabama or by registered or certified mail, as the State Department of Transportation shall direct. Any qualified bidder aggrieved by the decision of the State Department of Transportation upon the matter revoking his certificate may appeal from such decision to the Circuit Court of Montgomery County, Alabama, in the manner provided in subsection (f) of this section.

(d) Prerequisites to award of certificate. No bidder shall be given a certificate of qualification unless his financial statement and the investigation made by the State Department of Transportation shall show that he possesses net worth sufficient in the judgment of the State Department of Transportation to render it probable that he can satisfactorily execute his contracts and meet his obligations therein incurred. The maximum amount of work that an applicant will be permitted to have on contract with the State Department of Transportation and not completed at any one time shall be not more than 10 times the net worth as shown by the applicant’s latest financial statement. In the discretion of the State Department of Transportation, the certificate may contain a statement limiting such bidder to the submission of bids upon a certain class or classes of work. All applicants for qualifications shall expressly authorize the State Department of Transportation to obtain all the information which they may deem pertinent with respect to the financial worth and assets and liabilities of the applicant from banks or other financial institutions, surety companies, dealers in materials, equipment, or supplies, or other persons having business transactions with any applicant and shall expressly authorize all such financial institutions or other persons to furnish any such information requested from them by the State Department of Transportation. All information filed with, or furnished to, the State Department of Transportation by applicants or other persons in connection with the administration of this chapter shall be kept in confidence by the State Department of Transportation and shall not be revealed to any person except upon the proper subpoena or order of a court of competent jurisdiction. All applications shall be accompanied by satisfactory evidence that the applicant has complied with the workers’ compensation law and is not in default in the payment of any sum due from him under the provisions of such law. Where the applicant is a foreign corporation, the application shall be accompanied by a certificate of the Secretary of State that such corporation is authorized to do business in this state. The State Department of Transportation may require all qualified bidders to file financial statements from time to time, at such intervals as it may prescribe. This chapter shall be administered without reference to the residence of applicants, and its provisions and the rules and regulations of the State Department of Transportation, adopted pursuant thereto, shall apply equally to residents and nonresidents of the State of Alabama. This chapter shall not apply to the purchase of material, equipment, or supplies.

(e) Rules and regulations. For the purpose of carrying into effect the terms of this chapter and insuring to the state and public the award of all contracts to competent and responsible bidders, the State Department of Transportation shall be empowered to prepare and promulgate such rules and regulations, not inconsistent with the terms of this chapter, as it may deem proper. Such rules and regulations may cover the requirements of the State Department of Transportation with respect to equipment, past record and experience of applicant, personnel or organization, and such other matters as the State Department of Transportation may deem necessary to enable it to pass upon the qualifications of applicants. The State Department of Transportation may, in its discretion, make public from time to time a list of qualified bidders, but such list shall be general in character and shall not indicate the size of contract or character of work with respect to which such bidders have been qualified.

(f) Appeal from final action of awarding authority. All applicants for qualifications shall be promptly notified by the State Department of Transportation of its final action upon their applications. Any applicant aggrieved by the decision of the State Department of Transportation may, within 10 days after receiving notice of such decision, request in writing a reconsideration of his application by the State Department of Transportation and may submit additional evidence bearing upon his qualifications. The State Department of Transportation shall, thereupon, again consider the matter and may either adhere to or modify its previous decisions. The State Department of Transportation shall act upon any request for reconsideration within 15 days after the filing thereof and shall forthwith notify the applicant of the action taken. Upon being notified of the final action of the State Department of Transportation upon such reconsideration, the applicant who is still aggrieved by the decision of the State Department of Transportation may, within 10 days after receiving notification of such decision, take an appeal therefrom to the Circuit Court of Montgomery County, Alabama. Such appeal shall be perfected by the filing of a bond with the clerk of said court in such amount as the clerk may fix, conditioned upon the payment by the appellant of the cost of the appeal in case the decision of the State Department of Transportation shall be sustained. An issue shall be made up under the direction of the court between the applicant and the State Department of Transportation. The court shall hear the evidence offered by the appellant and the State Department of Transportation and decide the case without the intervention of a jury. If the court finds that there is no ground for the correction, modification, or reversal of the decision of the State Department of Transportation, it shall dismiss the appeal; otherwise, it shall make the order with respect to the qualification which it finds should have been made by the State Department of Transportation, which order shall be binding upon the State Department of Transportation. An appeal from such decision may be prosecuted to the Court of Civil Appeals or Supreme Court of Alabama in the same way and manner that appeals in civil cases are provided for by law and by the Alabama Rules of Appellate Procedure. Any applicant who has been refused qualification or who is dissatisfied with the State Department of Transportation’s decision as to the actual amount of work that he will be permitted to have under contract at any one time or any limitation as to the class or classes of work on which he is authorized to bid may, at any time, file a new application for qualification. Such new application shall be promptly considered and acted upon by the State Department of Transportation.

(g) Unqualified bidders. The State Department of Transportation shall not be authorized to consider any bid filed with it by any person who has not been qualified under the terms of this chapter. Bids from unqualified bidders discovered by the State Department of Transportation prior to the reading thereof to be from such person shall be returned without being read. If the State Department of Transportation finds, subsequent to the opening of the bids, that facts exist which would disqualify the lowest bidder or that such bidder is not competent and responsible, the State Department of Transportation shall reject such bid despite the fact of prior qualification of such bidder. It shall be unlawful to award any contract to any bidder not qualified to bid thereon at the time fixed for receiving bids.

(h) False representations as to financial position. It shall be unlawful for any applicant for qualification to knowingly make a false statement with respect to his financial worth in any application for qualification, financial statement, or other written instrument filed by him with the State Department of Transportation under the terms of this chapter, or the rules and regulations adopted pursuant thereto. Any person violating the provisions of this subsection shall, upon conviction, be fined not less than $100.00 nor more than $500.00, and shall be disqualified from submitting bids on contracts advertised for letting by the State Department of Transportation for a period of two years following the date of his conviction.

(i) Persons not qualified not to receive proposals. It shall be unlawful for the State Department of Transportation or any servant, agent, or employee or any other person to furnish or deliver any proposal relating to a highway, road, or bridge job to any person other than a duly qualified bidder or his authorized representative. The name of the proposed bidder shall be inserted in the face of the proposal, and such proposal shall not be transferable. No proposal shall be issued later than 24 hours before the hour set for the opening of bids. Any violation of the provisions of this subsection shall constitute a misdemeanor, and the person adjudged guilty shall be fined not more than $500.00 and imprisoned for not more than six months, one or both, at the discretion of the court.

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