Overview
FAR Part 9 establishes the policies and procedures for evaluating whether a prospective contractor has the capability, integrity, and legal standing to perform a government contract. It ensures that the Government only does business with "responsible" entities that possess the financial resources, technical skills, and ethical track records necessary to fulfill contractual obligations.
Key Rules
- Affirmative Determination of Responsibility: A Contracting Officer (CO) cannot award a contract unless they make an affirmative determination that the prospective contractor is responsible. In the absence of information clearly indicating responsibility, the CO must make a determination of nonresponsibility.
- General Standards for Responsibility: To be deemed responsible, a contractor must have adequate financial resources, the ability to comply with delivery schedules, a satisfactory performance record, a satisfactory record of integrity/business ethics, and the necessary technical equipment and skills.
- FAPIIS Requirement: For contracts exceeding the Simplified Acquisition Threshold (SAT), the CO must review the Federal Awardee Performance and Integrity Information System (FAPIIS) to check the contractor’s past performance and integrity history.
- Small Business Protections: If a CO finds a small business nonresponsible, they must refer the matter to the Small Business Administration (SBA). Only the SBA can issue a Certificate of Competency (COC) that overrides the CO’s nonresponsibility determination.
- Debarment and Suspension: The Government maintains a list of excluded parties (via SAM.gov). Agencies generally cannot award contracts to, or purchase from, any entity that is debarred, suspended, or proposed for debarment.
- Organizational Conflicts of Interest (OCI): COs must identify and evaluate potential OCIs early in the acquisition process to prevent unfair competitive advantages or biased judgment (e.g., a contractor cannot draft the specifications for a contract they intend to bid on).
Responsibilities
- Contracting Officers (CO):
- Must make and document the final responsibility determination.
- Required to check FAPIIS and SAM Exclusions before award.
- Must document nonresponsibility determinations in FAPIIS within three days if they meet certain thresholds.
- Identify and mitigate Organizational Conflicts of Interest (OCI).
- Prospective Contractors:
- Must affirmatively demonstrate their responsibility.
- Must provide certifications regarding tax delinquencies, felony convictions, and integrity matters.
- Responsible for determining the responsibility of their own subcontractors.
- Small Business Administration (SBA):
- Responsible for evaluating and potentially issuing Certificates of Competency (COC) for small businesses challenged by a CO.
- Surveying Activity (Contract Administration Office):
- Conducts preaward surveys when requested by the CO to provide detailed reports on a contractor’s financial or technical capability.
Practical Implications
- Low Price is Not Everything: FAR 9.103 explicitly states that awarding to the lowest bidder can be "false economy" if the contractor fails to perform. The Government has the legal right to bypass the lowest bidder if they cannot prove they are responsible.
- The "Death Penalty" of Contracting: Debarment and suspension are administrative actions, not criminal ones, but they effectively "kill" a company’s ability to do business with the government across all agencies.
- Documentation is Critical: For contractors, having a documented history of corrective actions after a performance failure is vital. Under FAR 9.104-3, a CO can overlook a poor performance history if the contractor can prove they have taken "appropriate corrective action."
- Teaming Risks: Prime contractors must realize that they inherit the "responsibility risk" of their subcontractors. If a critical subcontractor is debarred or technically incapable, it can lead to a nonresponsibility determination for the Prime.
- OCI Awareness: Companies providing consulting or systems engineering services must be extremely careful. Winning a contract to write a Statement of Work (SOW) usually "bricks" that company from bidding on the resulting multi-million dollar implementation contract due to OCI rules.