The current contractor evaluation system in use within the Kentucky Transportation Cabinet is based on the contractor evaluation system developed as part of SPR 212-00 “Quality Based Prequalification of Contractors.” This system relies on average performance ratings from the completion of the Contractor’s Performance Report at the conclusion of every project or annually for multi-year projects. The contractor’s average performance rating is weighted based on the dollar value of work performed across all projects for the year. The average performance rating is used in the computation of the Contractor’s Maximum Eligibility Amount in accordance with 603 KAR 2:015, Section 5. The Maximum Eligibility Amount is determined by multiplying the financial assets of the contractor by the contractor’s percentage rating. The financial assets are determined by the summation of the contractor’s reported cash surrender value (multiplied by a factor of 12) and the book value of the contractor’s equipment (multiplied by a factor of 6). The contractor’s percentage rating is determined by the contractor’s organization and experience (20%), the contractor’s plant and equipment (30%) and the contractor’s average performance rating (50%). The intention of including the contractor performance evaluation system in the maximum eligibility amount determination is to encourage high quality work on Cabinet projects and to minimize the number of contractors executing Cabinet contracts with an established history of poor performance. However, there is some question as to whether the current process is effective in limiting contractors with a history of poor performance from Cabinet contracts. For example, a contractor with a large maximum eligibility amount can still continue to bid on a significant number of Cabinet projects despite their documented poor performance. What is the most effective and efficient means for using contractor performance evaluations to encourage the participation of high performing contractors in Cabinet projects while limiting the participation of contractors with a history of poor performance?

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