MDOT Prequalification: Why You May Need a Certified Equipment Appraisal
If you are a Michigan construction contractor, and you want to do work for the Michigan Department of Transportation, you know that being a prequalified contractor is a requirement before bidding on a project. Prequalification requires a substantial amount of effort and documentation, so it may come as a surprise that you may need a certified equipment appraisal as part of your prequalification process. If you are in the process of applying for MDOT prequalification, here are a few reasons you may need a certified equipment appraisal.
One of the important factors that MDOT considers in the prequalification process is the value of your business. This is often something that is important for businesses that are growing and looking for loans for equipment or property. A certified equipment appraisal will help you assess the value of your business so you can justify your loan. However, many business owners don’t think about valuation if they aren’t trying to acquire a loan. Your MDOT application for prequalification does include a section on business financial information. To have the best chance possible for prequalification, make sure that your business valuation is accurate, with certified equipment appraisals.
Assets and Liabilities
Again, one of the prequalification application requirements is a statement of assets and liabilities. Your liabilities come into play when you consider your loans and any credit card debt. Your assets are a valuation of exactly how much your vehicles, machinery and construction equipment are worth. In some cases, MDOT will not hire a contractor with liabilities that exceed their assets. Ensure that your numbers are right with certified equipment appraisals. Knowing how assets stack up against your liabilities is also an important way to determine if your company is upside down. If you owe more than your business is worth, you may want to start working through some of your liabilities. An upside down business is likely to not receive MDOT qualification.
A critical part of your MDOT prequalification requirements is to submit a depreciation schedule for your equipment. MDOT wants to know that their contractors are using reliable equipment that will not cause problems with completing jobs within the necessary timeline. If you have older equipment, or equipment with high hours that has fully depreciated, MDOT may request a certified equipment appraisal to support the equipment. Because a certified equipment appraisal will take into account the condition and functionality of the equipment, along with the hours, you may be able to support the use of an older piece of equipment or high hour equipment if you have a certified equipment appraisal.
Construction jobs for MDOT are highly sought after for contractors in the Michigan. If your Michigan business wants to do work for MDOT, remember you need to be prequalified and you need to prove that your business is stable enough to work for MDOT. Support your business stability and ensure your prequalification with certified appraisals for all of your essential equipment.
Certified Equipment Appraisals for Michigan Department of Transportaion (MDOT) Contracts
R Stout Appraisals is the expert in equipment and machinery appraisals in Michigan. If you need appraisals for MDOT prequalification, call us today at (248) 978-8338 to schedule an appointment.