Application of standards
Contractors must demonstrate adequate resources and a satisfactory performance record, while small businesses have special procedures for nonresponsibility and must comply with subcontracting limitations.
Overview
FAR 9.104-3 details how contracting officers should apply the standards of responsibility when evaluating prospective contractors. It outlines the evidence required to demonstrate a contractor’s ability to obtain necessary resources, how to assess satisfactory performance records, and the treatment of affiliated concerns and joint ventures. The section also provides special procedures for small business concerns, including referrals to the Small Business Administration (SBA) for nonresponsibility determinations and compliance with limitations on subcontracting. The regulation ensures that only responsible contractors, with adequate resources and a history of satisfactory performance, are eligible for government contracts, with additional protections and procedures for small businesses.
Key Rules
- Ability to Obtain Resources
- Contractors must provide acceptable evidence (e.g., commitments or arrangements) that they can obtain required resources by contract award, unless they already possess them or will subcontract.
- Satisfactory Performance Record
- Contractors with a history of serious performance deficiencies are presumed nonresponsible unless extenuating circumstances or corrective actions are demonstrated.
- Affiliated Concerns and Joint Ventures
- Affiliates are generally considered separate, but their past performance and integrity may affect responsibility; joint ventures are evaluated on their own or, if lacking history, on the performance of their members.
- Small Business Concerns
- Nonresponsibility determinations for small businesses must be referred to the SBA for a Certificate of Competency; failure to comply with subcontracting limitations can result in nonresponsibility or nonresponsiveness.
Responsibilities
- Contracting Officers: Must verify resource commitments, assess performance history, consider affiliate/joint venture records, and refer small business nonresponsibility to the SBA.
- Contractors: Must demonstrate resource availability, maintain satisfactory performance, and (if small businesses) comply with subcontracting limitations.
- Agencies: Oversee compliance and ensure proper referrals to the SBA for small businesses.
Practical Implications
- Ensures only capable and reliable contractors are awarded contracts.
- Small businesses have recourse through the SBA if found nonresponsible.
- Contractors must be proactive in documenting resources and performance history.
- Failure to comply with subcontracting limitations can jeopardize eligibility, especially for small businesses.