How a contracting officer checks a business before an award: responsibility under FAR 9.104-1

To be found responsible, a business has to meet seven general standards. The rule lists them in this order (FAR 9.104-1):

1. Have adequate financial resources to perform the contract, or the ability to obtain them.
2. Be able to comply with the required or proposed delivery or performance schedule, taking into consideration all existing commercial and governmental business commitments.
3. Have a satisfactory performance record. The same paragraph adds a limit. A business cannot be found responsible or nonresponsible only because it lacks relevant performance history. The exception is the special standards FAR 9.104-2 provides for.
4. Have a satisfactory record of integrity and business ethics.
5. Have the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain them, including, as appropriate, production control procedures, property control systems, quality assurance measures and safety programs for the materials or services involved.
6. Have the necessary production, construction and technical equipment and facilities, or the ability to obtain them.
7. Be otherwise qualified and eligible to receive an award under applicable laws and regulations.

The rule also says how an officer applies the standards. For the resources standards, the officer needs acceptable evidence that the business can get what it lacks. That evidence is normally a commitment or explicit arrangement, in place at the time of award. It is to rent, buy or otherwise acquire the facilities, equipment, other resources or personnel. The exception is where the contractor already has enough resources or proposes to subcontract. For the performance record, a contractor that is or recently has been seriously deficient in contract performance is presumed nonresponsible. That presumption lifts if the officer finds the circumstances were properly beyond its control, or that it took appropriate corrective action. Failing to meet a contract's quality requirements is a significant factor. Affiliated concerns are normally treated as separate entities. But the officer considers an affiliate's past performance and integrity when they may adversely affect the contractor's responsibility. For a joint venture, the officer considers the joint venture's past performance. If that does not show enough past performance for award, the officer considers each party's (FAR 9.104-3).

The officer has to have enough information to be satisfied that your business meets the standards right now. Generally the officer gets it soon after a bid opening or the receipt of offers. The requests usually go only to the low bidder, or to the offerors in range for award. In negotiated contracting, especially where research and development is involved, the officer may get it before issuing the request for proposals. Information on financial resources and performance capability is obtained or updated as close to the award date as is feasible (FAR 9.105-1).

The officer reads government records about your business first. One is FAPIIS, the Federal Awardee Performance and Integrity Information System. The officer looks there for the offeror and any immediate owner, predecessor or subsidiary identified for it. The officer also looks at information linked to FAPIIS, such as from SAM. Another is CPARS, the Contractor Performance Assessment Reporting System, along with any other relevant past performance information. The officer should also use the records and experience of personnel in the contracting, audit and contract administration offices. Your own bid or proposal counts too. That means the certification at FAR 52.209-5 or 52.212-3(h), questionnaire replies, financial data, information on production equipment and personnel information. So do commercial sources of supplier information, of the kind offered to buyers in the private sector, and preaward survey reports. Other sources include publications, the contractor's suppliers, subcontractors and customers, financial institutions, government agencies, and business and trade associations (FAR 9.105-1).

What the officer writes can follow a business. The officer documents a determination of nonresponsibility in FAPIIS when three things are true. The contract is valued above the simplified acquisition threshold. The determination rests on a lack of a satisfactory performance record, or of a satisfactory record of integrity and business ethics. And the Small Business Administration does not issue a Certificate of Competency. Information posted in FAPIIS, except past performance reviews, becomes publicly available after a waiting period. An offeror or contractor can view the data on itself (FAR 9.105-2). Contracting offices that learn of circumstances casting doubt on a contractor's ability to perform promptly exchange that information (FAR 9.105-1).

Your registration is one of the things the officer reads. The rule names information linked to FAPIIS such as from SAM (FAR 9.105-1). By submitting an offer, the offeror verifies its representations and certifications posted in SAM. It verifies that the ones that apply to the solicitation are current, accurate and complete (FAR 52.204-8). So what the registration says about the business is read as the business's own statement. The officer also has to review SAM's exclusion records after bids are opened or proposals received, and again immediately before award (FAR 9.405). Exclusions on a SAM.gov record explains that. Offerors are asked to be registered in SAM when an offer is submitted (FAR 4.1102), as How to find federal contracts says. Firmenza's free health check shows what the public record says today, status, expiration date and the exclusion flag included. Checking your SAM.gov status explains the public record, and Sections L and M of a solicitation the proposal side.

If your business is small and the officer finds it nonresponsible, SBA gets a say before the award goes elsewhere. For a small business concern, the contracting officer follows subpart 19.6, Certificates of Competency and Determinations of Responsibility (FAR 9.103). A Certificate of Competency is a certificate the Small Business Administration issues. It states that the holder is responsible for the purpose of receiving and performing a specific government contract. That covers all elements of responsibility. Those elements include capability, competency, capacity, credit, integrity, perseverance, tenacity and limitations on subcontracting. The program lets SBA certify to contracting officers as to all elements of responsibility of any small business concern for a specific contract. It applies to all government acquisitions except 8(a) sole-source awards. It does not reach regulatory requirements that other federal agencies impose and enforce. When the officer finds an apparent successful small business offeror nonresponsible, the officer refers it to SBA for a possible certificate. That holds even if the next acceptable offer is from a small business (FAR 19.601).

The officer holds the award and sends the matter to SBA. The referral goes to the SBA Government Contracting Area Office serving the area where the business's headquarters are. It carries a notice of the elements of responsibility found lacking. It also carries copies of the solicitation and the business's final offer. It carries the abstract of bids or price negotiation memorandum, any preaward survey, the technical data package, and the other documentation the determination rested on. No referral is needed in two cases. One is where the business is found unqualified and ineligible under FAR 9.104-1(g), with the approval of the chief of the contracting office. The other is where it is under a suspension or a debarment (FAR 19.602-1). SBA's rule adds when the officer must refer a small business. That is whenever the officer denies an award on the basis of responsibility. It is also when the officer refuses to consider the business after a pass or fail evaluation under a responsibility-type factor, such as experience or past performance. And it is when the officer refuses because the business failed a definitive responsibility criterion in the solicitation. SBA's area office then tells the business about the negative determination. It offers the business the chance to apply for a certificate by a date SBA sets (13 CFR 125.5).

The business carries the burden. An offeror seeking a certificate has to show it is eligible for the review. That means it qualifies as a small business under the applicable size standard. It also means it has agreed to comply with the limitations on subcontracting and the nonmanufacturer rule, where they apply. It also has to show that it possesses all relevant elements of responsibility and has overcome the officer's objections. SBA may evaluate every element of responsibility, not only the ones cited, and may visit the business (13 CFR 125.5). A certificate, once issued, is conclusive as to responsibility. The contracting officer accepts SBA's decision and awards the contract to the business (FAR 9.105-2). SBA's rule says it then monitors performance. A denial does not keep the officer from awarding to the business anyway. It does not keep the business from offering on any other procurement either (13 CFR 125.5). Whether a business is small under a size standard is your own question. The card just below this guide lists the free counselors who can explain it.

It cannot say whether your business meets any standard. It cannot say what a particular contracting officer will ask for. It cannot say whether a determination or a certificate will go one way or another. It cannot say whether your business is small for a given contract. The standards are the contracting officer's to apply and SBA's to review. A question about your own facts is for a free counselor or an attorney. Federal contracts for any business says where a first contract starts.