Government Contracting Database
A responsible contractor is one who demonstrates that he is capable of performing the contract requirements. Unlike responsiveness, which must be determined at the time of bid opening, responsibility can be demonstrated at any time prior to award. Therefore, if a contractor is initially found to be non-responsible, he can discuss the matter with the contracting officer and make changes in order to demonstrate that he is, in fact, responsible.
FAR 9.104-1 General Standards
To be determined responsible, a prospective contractor must:
- Have adequate financial resources to perform the contract, or the ability to obtain them (see 9.104-3(a));
- Be able to comply with the required or proposed delivery or performance schedule, taking into consideration all existing commercial and governmental business commitments;
- Have a satisfactory performance record (see 9.104-3(b) and subpart 42.15). A prospective contractor shall not be determined responsible or nonresponsible solely on the basis of a lack of relevant performance history, except as provided in 9.104-2;
- Have a satisfactory record of integrity and business ethics (for example, see subpart 42.15).
- Have the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain them (including, as appropriate, such elements as production control procedures, property control systems, quality assurance measures, and safety programs applicable to materials to be produced or services to be performed by the prospective contractor and subcontractors). (See 9.104-3(a).)
- Have the necessary production, construction, and technical equipment and facilities, or the ability to obtain them (see 9.104-3(a)); and
- Be otherwise qualified and eligible to receive an award under applicable laws and regulations (see also inverted domestic corporation prohibition at 9.108).
The government determines a bidder’s responsibility by performing a pre-award survey. The depth of this survey is very much dependent upon the familiarity which the agency has with the particular bidder involved. If it is the company’s first government contract or its first experience with a particular agency or installation, the bidder should anticipate a detailed pre-award survey commensurate with the size and complexity of the project. If the pre-award survey determines that the bidder is non-responsible, and he is unable to convince the contracting officer that he can take steps to correct any deficiencies found, the bid will be rejected and award will be made to the next lowest bidder who is both responsive and responsible.
A small business concern which is found to be non-responsible has the opportunity to overcome the contracting officer’s finding of non-responsibility through the Small Business Administration. Within 15 days after receiving notice that a small business concern lacks certain elements of responsibility, the SBA will inform the small business concern of the contracting officer’s determination and will offer it the opportunity to apply to the SBA for a Certificate of Competency (COC). Upon receipt of a timely application and the required supporting documentation, the SBA will then send its own investigator, or team, to visit the small business concern in order to investigate those elements of responsibility which the agency found lacking. (The SBA has fifteen days to decide whether to issue a COC.) If the SBA disagrees with the agency, it will issue a Certificate of Competency which overcomes the finding of non-responsibility by the contracting officer and makes it possible for the bidder to receive the award. The COC procedure is an excellent vehicle by which small businesses can obtain review of the responsibility determinations of federal agencies. The SBA is not hesitant to disagree with the findings of the agency and usually makes every effort to give the opportunity to the small business concern to demonstrate its responsibility. Although agencies usually abide by the determination of the small business administration, if the contracting officer disagrees with the SBA’s issuance of a COC the matter can be referred to the SBA Central Office for purposes of a final ruling. Unfortunately, there is no similar COC procedure available to a large business concern which is found non-responsible.
Numerous Comptroller General cases hold that, in making responsibility determinations, the Contracting Officer must base his decision on the information available to him at the time award is made, rather than the information as it existed at some earlier time. See, Am. Tech. & Analytical Servs., Inc., B-282277.5, 2000 CPD ¶ 98 (Comp. Gen. May 31, 2000) (citing Vulcan Engineering Co., B-214595, 84-2 CPD ¶ 403 (Comp. Gen. Oct. 12, 1984), and cases cited at pp. 9-10). It is error for the Contracting Officer to fail to consider information bearing on the responsibility of a bidder coming to his attention after an initial determination but before award is made. Id.; See also Dock Express Contractors, Inc., B-227865.3, 88-1 CPD ¶ 23(Comp. Gen. Jan. 13, 1988).
The Comptroller General has expressly held that a Contracting Officer may properly find a bidder responsible even after the SBA was denied a COC to the bidder, on the basis of developments occurring after the SBA’s denial. Matter of: Pmo P’ship Joint Venture, B-401973.3, 2010 CPD ¶ 29 (Comp. Gen. Jan. 14, 2010) (citing Henry Spen & Company, Inc., B-183164, 76-1 CPD ¶ 46 (Comp. Gen. Jan. 27, 1976)). There, the SBA had denied a COC on the ground that the bidder had failed to meet its deadline for the submission of evidence of financial capability. Soon thereafter, however, the Contracting Officer became aware that the bidder had obtained a $50,000.00 line of credit, and on that basis reversed his initial determination of nonresponsibility. The Comptroller General, citing Radiation Systems, Inc., B-180268, 74-2 CPD ¶ 65 (Comp. Gen. July 29, 1974), and stating that “a prospective contractor’s responsibility should be measured with respect to information of record at the time of award,” upheld the subsequent determination of responsibility.
The Comptroller General has also held that the denial of a COC is not dispositive of a bidder’s responsibility where, between such denial and the time of award, “information probative as to the bidder’s responsibility comes to light for the first time.” Inflated Products Company, Inc., B-189115, 77-2 CPD ¶ 334 (Comp. Gen. Oct. 31, 1977) (citing Precision Electronics Labs, B-186251, 76-2 CPD ¶ 369 (Comp. Gen. Oct. 29, 1976)), and Crawford Development and Manufacturing, B-188110, 77-1 CPD ¶ 193 (Comp. Gen. March 15, 1977). Although it has been stated that the Contracting Officer retains his discretion to determine whether such new information now warrants a determination of responsibility, it would be error for him simply to disregard such new information. Id.
In fact, FAR 19.602-4(a) requires the Contracting Officer to take such new information into account, notwithstanding his referral of the matter to the SBA, if it comes to his attention prior to award of the contract. That provision states as follows (emphasis supplied):
If new information causes the contracting officer to determine that the concern referred to the SBA is actually responsible to perform the contract, and award has not already been made . . . the contracting officer shall reverse the determination of nonresponsibility, notify the SBA of this action, withdraw the referral, and proceed to award the contract.
The foregoing discussion illustrates the contracting officer’s role and obligations in making a responsibility determination prior to awarding a contract. The contracting officer cannot ignore new information bearing on the responsibility of a bidder simply because the Small Business Administration did not evaluate the information.
In negotiated procurements, an offeror’s “responsibility” goes to its ability to perform the contract and includes elements of capability, competency, capacity, credit, integrity, perseverance, and tenacity. See 15 U.S.C.A. § 637(b)(7)(A); 48 C.F.R. 19.600 et seq. It is fundamental that a bidder may furnish information regarding its responsibility at any time prior to award of the contract to another offeror or cancellation of the solicitation. See DynCorp Int’l LLC v. United States, 76 Fed. Cl. 528, 547 (2007) (citing Heli-Jet Corp. v. United States, 2 Cl.Ct. 613, 621 (1983); and Blount, Inc. v. United States, 22 Cl.Ct. 221, 226–27 (1990)); Apex International Management Services, Inc., 60 Comp. Gen. 172 (1981) (submission of bonds as evidence of financial capacity must be permitted up to the time of award). Moreover, the government has a continuing duty to evaluate a contractor’s responsibility despite an initial, adverse determination:
“[F]urther consideration of a prior determination of an offeror’s responsibility should be made where a material change occurs in a principal factor on which the determination was based.” CFE Services, Inc.; Department of the Navy, 64 Comp. Gen. 19 (1984).
Updated: September 10, 2017