Analysis of FAR Subpart 19.6: Certificates of Competency and Determinations of Responsibility

Overview

FAR Subpart 19.6 establishes the Certificate of Competency (COC) program, which empowers the Small Business Administration (SBA) to serve as the final arbiter of a small business's responsibility to perform a specific government contract. This subpart ensures that small businesses are not unfairly disqualified by contracting officers for reasons like lack of capacity or credit without a secondary, independent review by the SBA.

Key Rules

• Mandatory Referral: If a Contracting Officer (CO) determines an apparent successful small business offeror is nonresponsible, they must refer the matter to the SBA. This applies even if the next offeror in line is also a small business.
• Scope of Responsibility: The COC covers all elements of responsibility, including capability, competency, capacity, credit, integrity, perseverance, tenacity, and compliance with limitations on subcontracting.
• Conclusiveness: An SBA-issued COC is conclusive. Once issued, the CO must accept the small business as responsible for that specific procurement; they cannot require additional proof of responsibility.
• The 15-Day Rule: Upon referral, the CO must withhold the contract award for at least 15 business days to allow the SBA to process the COC application.
• Exceptions: Referrals are not required for 8(a) sole-source awards, or if the business is suspended/debarred under FAR Subpart 9.4.
• Nonmanufacturers: For unrestricted acquisitions, a small business nonmanufacturer can receive a COC if they furnish end items produced or manufactured in the U.S.

Responsibilities

• Contracting Officer (CO):
  • Identifies and documents nonresponsibility determinations.
  • Withholds contract awards during the SBA review period.
  • Prepares the referral package (solicitation, preaward surveys, technical data).
  • Initiates appeals to SBA Headquarters if they disagree with an Area Office's decision (for contracts over $100,000).
• Small Business Administration (SBA):
  • Informs the small business of the nonresponsibility determination and their right to apply for a COC.
  • Conducts independent reviews, including facility visits if necessary.
  • Issues or denies the COC within 15 business days (or an agreed-upon extension).
  • SBA Headquarters handles final determinations for contracts exceeding $25 million.
• Small Business Concern:
  • Must proactively apply for the COC once notified by the SBA.
  • Provides necessary documentation to prove responsibility to the SBA.
• Agency OSDBU / Director of Small Business Programs:
  • Coordinates and files formal agency appeals to SBA Headquarters when the agency disagrees with the issuance of a COC.

Practical Implications

• Procurement Lead Time: The COC process adds a minimum of 15 business days to the procurement timeline. COs must factor this potential delay into their acquisition schedules when small businesses are likely to compete.
• Shift in Authority: This subpart effectively removes the "final word" on responsibility from the procuring agency and gives it to the SBA. A CO who wants to disqualify a small business for technical or financial reasons must have a very robust, well-documented case, as the SBA often views the firm’s capabilities more leniently to promote small business participation.
• "Second Chance" for Contractors: For small businesses, the COC is a vital "court of last resort." It allows them to present additional evidence or business plans to the SBA that the CO may not have considered or may have misinterpreted during the initial evaluation.
• Appeal Thresholds: Because there is no agency appeal for COCs valued at $100,000 or less, the SBA Area Office's decision is effectively absolute for smaller requirements. For larger requirements (up to $25M), the high-level coordination required between the Agency OSDBU and SBA HQ means that appeals are relatively rare and reserved for high-stakes disagreements.