Overview
This section outlines the mandatory "Certificate of Competency" (COC) process required when a contracting officer (CO) determines an apparent successful small business offeror is nonresponsible. It establishes the procedural pipeline for referring such cases to the Small Business Administration (SBA), which serves as the final arbiter of a small business's ability to perform a specific government contract.
Key Rules
- Mandatory Referral: If a CO finds a small business nonresponsible (lacking capacity, credit, integrity, etc.), they must refer the matter to the SBA Area Office and withhold contract award, except in cases of debarment/suspension or specific regulatory ineligibility.
- The 15-Day Rule: The CO must generally withhold the contract award for 15 business days following the SBA’s receipt of a complete referral to allow for the COC review.
- Scope of SBA Review: The SBA is not limited to investigating only the deficiencies cited by the CO; they may independently evaluate all elements of responsibility.
- Conclusiveness: If the SBA issues a COC, it is legally conclusive regarding the firm’s responsibility. The CO is required to award the contract to the concern unless there is a valid reason unrelated to responsibility (e.g., the offer is no longer the best value in a tradeoff).
- Appeals and Thresholds:
- $100,000 or less: The SBA Area Office decision is final; the CO cannot appeal.
- $100,000 to $25,000,000: The CO may request a formal appeal to SBA Headquarters through their agency’s OSDBU.
- Over $25,000,000: The SBA Area Office must refer the case to SBA Headquarters for the final determination.
- One-Time Referral: For any single acquisition, the CO shall make only one referral at a time regarding a determination of nonresponsibility.
Practical Implications
- Procurement Timelines: Agencies must factor in a minimum of three weeks (15 business days) of potential delay if the winning bidder is a small business with questionable responsibility.
- Documentation Burden: COs must provide a comprehensive "referral package" including the preaward survey, technical data, and price negotiation memorandums, shifting the burden of proof to the agency to justify the nonresponsibility determination.
- Shift in Authority: The COC process effectively strips the CO of their usual final authority to determine responsibility, granting the SBA "veto power" over agency nonresponsibility findings for small businesses.