United States: Raising The Responsibility Issue

The U.S. Government may only award contracts to parties it considers "responsible." While in extreme cases, such as indictment or conviction, contractors face suspension and possible debarment from all government contracts, a non-responsibility determination disqualifies a bidder from a specific procurement. The "responsibility" determination, therefore, presents a prospective contractor with the opportunity to promote its performance record while subtly (or not so subtly) highlighting the business and ethical lapses of the competition. While the final determination remains largely up to the Contracting Officer’s ("CO") discretion, contractors should still find ways to insert the responsibility issue into the decision-making process.

The general standards for determining a contractor’s responsibility are set forth at FAR § 9.104-1. Specifically, a contractor must:

• Have adequate financial resources to perform the contract, or the ability to obtain them (See FAR § 9.104-3(a));

• Be able to comply with the required or proposed delivery or performance schedule, taking into consideration all existing commercial and governmental business commitments;

• Have a satisfactory performance record (See FAR § 9.104-3(b)). A prospective contractor shall not be determined responsible or non-responsible solely on the basis of a lack of relevant performance history, except as provided in FAR § 9.104-2;

• Have a satisfactory record of integrity and business ethics;

• Have the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain them (including, as appropriate, such elements as production control procedures, property control systems, quality assurance measures, and safety programs applicable to materials to be produced or services to be performed by the prospective contractor and subcontractors) (See FAR § 9.104-3(a));

• Have the necessary production, construction, and technical equipment and facilities, or the ability to obtain them (See FAR § 9.104-3(a)); and

• Be otherwise qualified and eligible to receive an award under applicable laws and regulations.

The CO retains broad discretion in making a non-responsibility determination. Although many non-responsibility findings focus on the inadequate performance of government contracts, commercial contracts can also be considered when evaluating a contractor’s performance record. See To The Southwest Engineering Company, 1971 WL 4695 (Comp. Gen.), 51 Comp. Gen. 288, B-171,729, 1971 CPD ¶ 84 (1971) (finding that both government and private contracts may be used in accessing a contractor’s tenacity and perseverance). Moreover, the term "integrity" has been given its generally accepted connotation of probity, honesty, and uprightness, and does not appear to be restricted to violations of U.S. Government procurement contracts.

The U.S. Government has found individual contractors non-responsible based on an unsatisfactory performance record. In Matter of: Saft America Inc. ("Saft"), 1996 WL 93951 (Comp. Gen.) (1996), a pre-award audit indicated that Saft’s BA-5590/U batteries were experiencing severe technical problems because of a venting of toxic materials. The audit further revealed that the Army had decided not to use Saft’s batteries until the problem was corrected. The CO relied on the pre-award audit to make a non-responsibility determination, concluding that Saft might have difficulty producing sufficient quantities of usable batteries. The CO evidently reached this determination based on Saft’s inadequate previous performance, even though the agency did not terminate the prior contract for default. See also Matter of: Pittman Mechanical Contractors, Inc., 1991 WL non-responsibility when a contractor’s quality of work, timely performance, effectiveness of management, and compliance with safety standards had all been rated unsatisfactory). 156287 (Comp. Gen.), B-242,499, 91-1 CPD ¶ 439 (1991) (finding non-responsibility when a contractor’s quality of work, timely performance, effectiveness of management, and compliance with safety standards had all been rated unsatisfactory).

On a broader level, a CO similarly may render a non-responsibility determination because of a contractor’s lack of business integrity. In reaching this conclusion, a CO may rely on a criminal investigation report involving past procurements, regardless of whether the report results in conviction or even prosecution. See Matter of: Becker and Schwindenhammer, GmbH ("Becker"), 1987 WL 101549, B-225,396, 87-1 CPD ¶ 235 (1987). In Becker, the CO reached a non-responsibility determination based on information in an Army Criminal Investigation Division report, as well as concerns about the contractor’s quality assurance capabilities and past performance deficiencies, which included major delays, poor workmanship, and the unauthorized substitution of flooring materials. However, a criminal investigation does not automatically lead to a finding of non-responsibility as long as the awardee is not under indictment and/or included on the government’s list of debarred and suspended contractors. See Computer Data Systems, Inc. v. Department of Energy; Dyncorp, Intervenor, GSBCA 95-2 BCA ¶ 27604 (July 15, 1994).

The Comptroller General will not question a non-responsibility determination unless the protester shows bad faith on the part of the CO or that the determination lacks a reasonable basis. The Comptroller General also generally does not review affirmative responsibility decisions. See 4 C.F.R. § 21.5(c). The exceptions are (1) protests that allege that definitive responsibility criteria in the solicitation were not met; and (2) protests that identify evidence raising serious concerns that, in reaching a particular responsibility determination, the CO unreasonably failed to consider available relevant informant or otherwise violated statute or regulations. Id. See also Matter of: BBC Brown Boveri, Inc., 1987 WL 102926 (Comp. Gen.), B-227,903, 87-2 CPD ¶ 309 (1987) (finding that the available record reasonably supported the CO’s responsibility determination); Matter of: BMY, Division of Harsco Corporation, 1989 WL 240254 (Comp. Gen.), B-233,081, B-233,081-2, 89-1 CPD ¶ 67 (1989) (overturning responsibility determination based on lack of objective evidence that contractor possessed the prerequisite experience).

A prospective government contractor should find a way to raise, either directly or indirectly, the poor performance and/or ethical lapses of the competition. Such information, in turn, should at least be considered by the CO in rendering a responsibility determination. That being said, the CO retains broad discretion in making this decision, and there are limited grounds of appeal if the CO ultimately makes an affirmative responsibility determination.

This article is presented for informational purposes only and is not intended to constitute legal advice.