This document summarizes the Los Angeles Unified School District's prequalification process for contractors bidding on both formal and informal district contracts. It outlines the basic requirements, including having a valid contractor's license and workers' compensation insurance. It also describes the prequalification questionnaire contractors must complete, which evaluates their experience, safety history, quality, past performance, financial resources, and more. Contractors are assigned qualification categories based on the level of experience and references they can provide.

1. DISTRICT’S PREQUALIFICATION FOR FORMAL (and Informal) CONTRACTS LOS ANGELES UNIFIED SCHOOL DISTRICT FACILITIES SERVICES DIVISION FACILITIES CONSTRUCTION CONTRACTS PRESENTED BY: Cimone Watson - Gemarie Go - Tony Gomez Facilities Construction Contracts

2. It is the intent of the District to do business with quality contractors by identifying such contractors through a uniform system of rating bidders to obtain the best quality construction for the lowest price practicable under the circumstances. The District’s prequalification programs are adopted pursuant to Public Contract Code Section 20111.5. Requires all contractors interested in bidding either formal or informal, competitively bid public works projects to pre-qualify before submitting a bid to the District Includes requirements for Job Order Contracting (JOC). More information may be found @ tools.egordian.com/rptResultList.aspx Provides standard on-going prequalification enrollment for prospective bidders Prequalification Program

3. Prospective Bidders interested in bidding on INFORMAL District Projects: Informal District contracts, $72,400 or less, are bid through the Local District Maintenance & Operations Offices. Information on Informal contracts may be found on the LAUSD M & O Web Site @ http://mo.laschools.org/fis/existing-facilities/m-and-o/bidwalks/ Contacts and telephone numbers to the Local M & O offices are located in the Construction Bidder’s Handbook Prospective bidders interested in bidding on Informal District contracts only need to be Safety pre-qualified. The Safety Questionnaire may be obtained by visiting the FCC website @ www.laschools.org/contractor/cc/pq , or by calling FCC @ (213) 207-2300, then press 4 to reach the Prequalification Unit. Fax completed Informal Questionnaires directly to FCC at 213-483-9643.

4. Contractor Applicant Overview Construction Contractor Safety Prequalification For the LAUSD School Repair and Construction Program

5. The Safety component of the Formal Contracts and Informal Contracts Prequalification Questionnaire are the same. This program will assist you in completing the Safety forms for either type of contract.

6. IMPORTANT NOTE: The Safety Prequalification only applies to firms performing construction work for the School Repair and Construction Program. It does not apply to suppliers, vendors and service contracts. These are governed by the rules and regulations of the LAUSD Department/Group that is advertising the contract.

7. Prequalification is only valid for one (1) year. Each firm must reapply prior to expiration. If your firm is seeking to renew, your firm’s safety and loss history will be considered during the renewal process.

8. This presentation will walk you through the four sections of the Safety Prequalification Questionnaire. You have a copy of the Safety Questionnaire in your handouts and may begin filling it out as we go through this presentation. However, in most cases, you will not be able to complete the entire Questionnaire today. You will likely need to (a) contact your Insurance Carrier or Broker, and (b) review company files to complete the Questionnaire.

9. Basic Requirement #1 Your firm must have a current and valid California Contractor’s License in good standing with the California State License Board. The name of the firm applying for Prequalification must be the same name that is on the license.

10. Basic Requirement #2 Your firm must have a current Workers’ Compensation insurance policy. The policy must be in the same name as the firm that is applying for Prequalification. You will be required to provide proof of coverage in the form of an original Certificate of Insurance.

11. General Notes Fill in every blank, unless not applicable. Make sure your answers are legible. If it can’t be read, it can’t be processed! Evaluation of your Questionnaire will not be completed until all information is complete and all items are properly filled out. Do NOT send us anything we don’t ask for, either in the questionnaire or otherwise.

12. Contractor Information Questionnaire Header

14. Insurance Information Section A

15. Provide all requested information!

16. What is the EMR?

17. The Experience Modification Rate (EMR) impacts the cost of your firm doing business. It is a multiplier based on your firm’s Workers’ Compensation loss claim history that causes your insurance premiums to go up, or down. Base Rate x EMR = Your insurance cost

18. Where does EMR come from? The EMR is not calculated by your insurance broker or carrier. California (intrastate) EMRs are calculated by the WCIRB (Workers Compensation Insurance Rating Bureau). Interstate EMRs are calculated by NCCI (National Council on Compensation Insurance).

19. In simple terms, the EMR is a ratio of actual claims dollars incurred by your firm compared to the industry average value for firms that do the same kind of work you do. Good history causes it to go down. Adverse history causes it to rise. It is desirable to have an EMR < 1.0. 1.0 is considered to be “average”.

20. If you DON’T have an EMR: You must provide copies of your firm’s Workers’ Compensation Loss Runs for each of the last three years, along with your questionnaire. Contact your Insurance Carrier or Broker to obtain your Loss Runs. If you are a brand new company you will have neither an EMR nor loss runs. Please note this in writing on the questionnaire.

21. What the EMR means to you: Let’s say you, Fred, are bidding against Joe and Bob. Your EMR is 1.0, Joe’s is 0.5, and Bob’s is 2.0.

22. Let us also assume that your bids are identical with respect to time, material and labor hours, and include $10,000 as the manual (base) rate for Workers’ Comp. Your insurance would cost you $10,000. Joe would pay $5,000 for the same insurance. Bob would pay $20,000 for the same insurance.

23. Who gets the job? JOE! Who says safety doesn’t pay?

24. You can learn what your EMR is (if you have one) by contacting your Workers’ Compensation Insurance carrier. We will verify your answers. If your EMR is above 1.50, your firm is not eligible to obtain Safety Prequalification at this time. There are no exceptions. However, you may appeal the decision, after which you will be invited to attend an Administrative Review Hearing at which you may offer mitigating facts or information. The determination of the Review panel is final.

25. Incidence Rates: Section B

26. Enter one (1) code only!

29. Incidence Rates... …are based on employee injuries and illnesses and total company man-hours per CALENDAR YEAR, not insurance policy year. They: are not based on OSHA inspections. can be computed for every contractor EVEN IF THEY ARE “0!”

30. Basic information on evaluating whether or not an injury case is OSHA recordable is included on pages 19-23 of the Safety Resource Guide. A work-related injury or illness must be recorded if it resulted in: Death or dismemberment Loss of consciousness Days away from work Restricted work activity or job transfer Medical treatment beyond first aid

31. Calculating Your Incidence Rates

32. The formula used to calculate the incidence rates was established by the U.S. Department of Labor - Bureau of Labor Statistics. It’s been around for decades – it’s THE standard formula for everyone.

33. When a contractor calculates their rates, the answer is a rate of incidents (injuries) per 200,000 hours (100 people working 8 hours a day, 50 weeks a year)- regardless of how many hours the contractor worked!

34. Your rates are compared against the national average rates for your NAICS code.

35. Refer to your OSHA 300 Logs and/or your Loss Runs and injury/illness records to determine the number of injury cases you have incurred. Company hours is the total sum of all work hours by all employees (including those of a sole proprietor/owner) for that reportable year. Complete all information in this section of the questionnaire! Fill in every blank EVEN IF THE ANSWER IS “0.”

36. Sample rate calculations:

37. In 2003, a company has 1 OSHA recordable injury which did not involve lost workdays. The company worked 30,000 hours that year. The Total Case Incidence Rate is: (1 x 200,000) / 30,000 = 6.7 The Lost Workday Case Incidence Rate is: (0 x 200,000) / 30,000 = 0 The No Lost Workday Case Incidence Rate is: (1 x 200,000) / 30,000 = 6.7

38. A company has 4 OSHA recordable injuries in a 2005. Three cases were lost-workday injuries. One case did not involve lost workdays. The company worked 30,000 hours that year. The Total Case Incidence Rate is: (4 x 200,000) / 30,000 = 26.7 The Lost Workday Case Incidence Rate is: (3 x 200,000) / 30,000 = 20 The No Lost Workday Case Incidence Rate is: (1 x 200,000) / 30,000 = 6.7

41. If you are a new firm, please add a note on your forms that informs us of this. A new firm will be expected to have very few, or possibly no, company hours. We will verify this by checking the effective date of your Contractor’s License.

42. OSHA Citation History Section C

44. This section looks at your firm’s OSHA citation history. It considers 4 types of citations: serious willful failure to abate repeat.

45. You must report all such citations that your firm has received. If you are contesting or appealing an applicable citation and it has not reached final resolution, you must still report the citation !

46. The classification of the citation itself is important, but we also look at: what happened what corrective action was taken your firm’s safety program to see that it meets minimum Cal/OSHA and Labor Code requirements

47. Citations are public information. Citation information for all employers is available using the “Establishment Search” at www.osha.gov Your answers will be verified. We will check back 60 months as shown in the Questionnaire!

48. Safety Policy & Procedure Questions Section D

50. Read each question carefully. The questions are based on Cal/OSHA and California Labor Code requirements. They were not made up by LAUSD! Understand what it is asking. The source regulation is listed with every question (Labor Code or Cal/OSHA).

51. You may be required to provide documentation for any or all of your answers - be prepared! A “yes” answer implies that you have documentation available for review for that item if you are asked to provide it!

52. Certification:

53. This is where you certify that your information is true and correct! You are responsible for the accuracy of the information.

54. Still have questions? Here are some sources for additional information:

55. Your firm’s Insurance Broker or Insurance Carrier Loss Control (Safety) Department, Cal/OSHA Consultation, Trade Associations your firm belongs to, Internet sources such as those noted in the Resource Guide.

56. Contractor Applicant Overview Construction Contractor Formal Prequalification For the LAUSD School Repair and Construction Program

57. Formal Prequalification Process The District has streamlined some of the requirements of the Prequalification Process to: Allow contractors to prequalify on an on-going basis Provide a more user-friendly document Consolidate reference questions to allow for more accurate evaluations Provide Specialty Contractors an opportunity to prequalify with the District as prime contractors. And provide a more timely turn-around and Prequalification Approval

58. The Formal Prequalification Questionnaire Thoroughly evaluates a contractor’s: Experience Safety History Quality and Workmanship Past Performance Bonding/Insurance/Licensing Financial Resources

59. Contractors Interested in Bidding on Formal District Projects: Have a current and active California Contractors License Complete the most current Prequalification Questionnaire (A, B or C) Meet the General Qualification requirements Receive and maintain Safety Approval Show proof of Workers’ Comp Coverage Provide bonds by a California-admitted surety company Provide Liability coverage by Insurance Company licensed to do business in California Provide references of projects completed within the last 36 months Submit a current financial statement, as specified (only in PQ-A) Prequalification approval is valid for one (1) year.

60. Minimum Requirements and Limits of Qualifications Category C – Level I GENERAL/PRIME CONTRACTORS With NO public works experience, or who have completed less than two (2) public works projects, or who have completed informal LAUSD “B” letter contracts totaling at least $100,000; Contractors must provide the specified references completed within the last 36 months. Meet all general & safety requirements. If approved by this method, the prequalification limits and maximum dollar amounts for bidding are determined by the bonding company, as well as the experience level of the contractor. Maximum bidding level of $350,000 applies if supported by the bond company

61. Minimum Requirements and Limits of Qualifications Category C – Level II SPECIALTY CONTRACTORS who have performed work as a subcontractor and wish to bid as the prime on formal District contracts Contractors must provide subcontractor references totaling at least $100,000 for work completed within the last 36 months. Meet all general & safety requirements. If approved by this method, the prequalification limits and maximum dollar amounts for bidding are determined by the bonding company, as well as the experience level and license type of the Specialty Contractor. Maximum bidding level of $350,000 applies if supported by the bond company

62. Minimum Requirements and Limits of Qualifications Category B – Level I Prospective bidders with at least two (2) public works contracts experience as a general/prime contractor within the last 36 months must provide and meet approval on the following items: Submit 2 public works references on the Performance and Safety Evaluation forms, completed by the owners of the projects, and receive an average, minimum score of 140 points on the Performance Evaluation reference forms, and no negative answer on the Safety Evaluation Forms. The experience submitted must be of the same size and type project that the contractor wishes to become prequalified to bid upon. Meet all general & safety requirements. If approved by this method, the prequalification limits and maximum dollar amounts for bidding are determined by the bonding company.

63. Minimum Requirements and Limits of Qualifications Category B – Level II “ License Type-Specific SPECIALTY CONTRACTORS” who wish to bid as prime on formal District contracts, and will provide subcontractor reference evaluations on public works projects within the last 36 months must provide and meet approval on the following items: Submit 2 public works references on the Performance and Safety Evaluation forms, completed by the owners or by the primes of the projects, and receive an average, minimum score of 140 points on the Performance Evaluation reference forms, and no more than one negative answer on the Safety Evaluation Forms. The experience submitted must be of the same size and type project that the contractor wishes to become prequalified to bid upon. Meet all general & safety requirements . If approved by this method, the prequalification limits and maximum dollar amounts for bidding are determined by the bonding company, as well as the experience level and license type of the Specialty Contractor.

64. Minimum Requirements and Limits of Qualifications Category A Prime Contractors who have completed within the last 36 months, two (2) public works projects or three (3) private works projects, one of which must be NEW Construction at $7 million or higher Meet all general & safety requirements Demonstrate a bonding relationship with a California-admitted surety company with an A-VII bond rating according to A.M. Best company published report Provide a Reviewed or Audited Financial Statement (Less than 18 months old) If approved by this method, maximum prequalification dollar limits for bidding will be determined by the bonding company. To Bid on New Construction Projects Estimated at $5 Million and Above