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Are You a Responsible Contractor?

Sep 09, 2011

I was recently reading a synopsis of a government contracting solicitation on FedBizOpps, and I noticed that it said “All responsible small business sources may submit a bid, which if submitted in a timely manner, will be considered.” This got me thinking, what exactly (precision matters greatly in government contracting) is a “responsible” contractor? I mean, I had a general sense of it - a firm that could perform the work - but if someone pushed me to define it during a presentation, could I? I wasn't so sure, so I went to the FAR (Federal Acquisition Regulations).


The FAR, specifically FAR 2.101, definitions, is the place to start when you’re trying to figure out what a government contracting term means. Here (scroll down, the terms are alphabetical), we find that a responsible prospective contractor means a contractor that meets the standards in 9.104. This is a typical FAR experience – a wild goose chase, jumping from place to place in search of the answer. FAR 9.104 summarized here (but do read the full text for details) indicates that in order to be determined responsible, a contractor must have:

Financial capacity - adequate financial resources to perform the contract

Technical capacity - the necessary experience, accounting and operational controls, technical skills, equipment, and facilities to perform the contract

• A satisfactory record of past performance

Ethics and integrity

How does a contracting officer determine if your company meets these criteria? Starting with ethics, the first question is whether your firm has been suspended or debarred from working with the federal government. FAR 9.405 requires contracting officers to review the Excluded Parties List System (EPLS), to ensure that no award is made to a listed contractor. The contracting officer will probably also check the Federal Awardee Performance and Integrity Information System (FAPIIS), which pulls proceedings information from the Central Contractor Registration (CCR) database and suspension/disbarment information from EPLS. It also provides information that federal agency representatives have entered about contract terminations, defective pricing, prior non-responsibility determinations, and other serious issues. As a contractor, you also provide ethics information in your Online Representations and Certifications Application (ORCA). If no negative information is found, your firm will likely pass muster on ethics.

Next, the contracting officer will evaluate your past performance. FAR 15.304(c)(3)(i) states that “past performance shall be evaluated in all source selections for negotiated competitive acquisitions expected to exceed the simplified acquisition threshold.” Past performance is probably also the best way for a contracting officer to evaluate your firm’s technical capability. Why? If your firm has done a similar project before, it can probably do it again. The contracting officer may ask you for references, and they will check the Past Performance Information Retrieval System (PPIRS), which provides “report cards” on how your firm has performed on most contracts of $100,000 or more. Contracting officers will consider your past performance on private sector work by checking your references if you have never done the same type of work for the government. As a contractor, you definitely want to be aware of the information that is contained about your business in FAPIIS and PPIRS.

Financial capacity can be more challenging to assess. A contracting officer may consider the size of the projects your firm has completed, request your current financial statements, ask to speak to your banker to verify your access to capital, check your bonding capacity (construction firms), and/or pull your business credit report from D&B.

What happens if a contracting officer determines that your business is not responsible? They must specify the elements of responsibility they found lacking, and refer the matter to the appropriate U.S Small Business Administration (SBA) office. The SBA will contact you, and offer you a chance to apply for a Certificate of Competency (COC, FAR 19.602) to show that you are capable of performing the contract. If the SBA issues a COC, the contracting officer is generally required to accept it.

How do you become a responsible contractor? Begin with smaller projects and develop a strong past performance record. Work with your lender to increase your access to capital. Explore opportunities to joint venture with more experienced firms. For free & confidential assistance, contact the Wyoming PTAC team.

Are you a responsible contractor? Has a contracting officer ever challenged your firm on responsibility?


This post was written by Amy Lea and Jeff Sneddon.


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