Responsibility Considerations for Prospective Contractors

January 11, 2024 Sareesh Rawat, Esq.

The Federal Acquisition Regulation (FAR) requires prospective contractors to be deemed responsible before they are awarded federal contracts. FAR subpart 9.1 prescribes policies, standards, and procedures for determining whether prospective contractors and subcontractors are responsible. FAR 9.103 requires contracting officers to make an affirmative determination of responsibility before award. This affirmative determination must be reasonable and factually supported. Prime contractors may also be required to demonstrate the responsibility of their proposed subcontractors when necessary. FAR 9.104 states general and special standards that prospective contractors must meet to demonstrate responsibility to receive contracts.

General Standards

The general standards listed in FAR 9.104 require prospective contractors to:

Either have adequate financial resources to perform the contract at issue or have the ability to obtain them.
Have the ability to comply with the required or proposed performance or delivery schedule, taking into consideration all existing commercial and governmental commitments.
Have a satisfactory past performance record. Notably, the responsibility determination of prospective contractors cannot solely be made based on a lack of relevant performance history, subject to exceptions of FAR 9.104–2.
Have a satisfactory record of integrity and business ethics.
Possess or have the ability to obtain the necessary organization, experience, accounting and operational controls, and technical skills.
Be otherwise qualified and eligible to receive an award under applicable laws and regulations.

Special Standards

When necessary for a particular acquisition or class of acquisitions, FAR 9.104 permits the use of specialized standards in addition to the general standards. Special standards may be applicable in contracts requiring unusual or specialized contractor expertise or facilities for successful performance. In such situations, contracting officers must develop specialized standards of responsibility with the assistance of appropriate specialists and include them as part of the solicitation.

Subsistence contracts are only awarded to contractors that meet the general standards of FAR 9.104 and the procuring agency's standards and procedures for sanitation.

Application of General & Special Responsibility Standards

Contracting officers are required to review evidence of the prospective contractor’s ability to acquire sufficient resources to perform the contract. Such evidence includes any commitments or explicit arrangements that exist at the time of award to acquire necessary resources. Additional information may be obtained by reviewing the contractor’s proposal, public sources of information such as the SAM.gov website, or sources specifically mandated by the procuring or administering agency.

In addition to verifying their ability to acquire sufficient resources to perform the contract, FAR 9.104 also requires contracting officers to ensure that prospective contractors have a satisfactory performance record. Contractors with serious deficiencies in their performance record are presumed to be non-responsible unless the contracting officer determines that the circumstances surrounding the deficiencies were beyond the control of the contractor. Past performance evidence reflecting a failure to apply tenacity and perseverance to perform is generally seen as strong evidence of non-responsibility. Similarly, a record reflecting failure to meet quality requirements is also strong evidence suggesting contractor non-responsibility. In the presence of such a record, the prospective contractor is generally required to rebut the contractor officer’s findings.

Under FAR 9.104, contracting officers are also required to review the prospective contractor’s performance and integrity information available in the Federal Awardee Performance and Integrity Information System (FAPIIS) when awarding contracts exceeding the simplified acquisition threshold. Furthermore, if the contract at issue requires a subcontracting plan, the contracting officer is required to consider the prospective contractor’s record of compliance with subcontracting plans on previous contracts.

Contracting officers are generally required to consider all information reasonably available to them when making responsibility determinations. Therefore, contractors should be mindful that maintaining a strong financial position, a history of successful performance, and a commitment to ethical business practices are all crucial aspects of demonstrating responsibility. While specific evidence demonstrating contractor responsibility may vary, contractors should be cognizant of public and official sources of information about their business that may concern responsibility. For instance, contractors should continuously monitor and update information sources like SAM.gov. By taking a proactive approach and resolving any issues potentially impacting their responsibility determinations, contractors can avoid complications prior to contract award and position themselves for success.

This Federal Procurement Insight is provided as a general summary of the applicable law in the practice area and does not constitute legal advice. Contractors wishing to learn more are encouraged to consult the TILLIT LAW PLLC Client Portal or Contact Us to determine how the law would apply in a specific situation.

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Prequalification Issues in Relying on De Facto Joint Ventures in Security Act Procurements

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Responsibility Standards for Prospective Contractors

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