Legal Insights: Determining Contractor Responsibility
08/01/2018

Awards of almost all federal contracts are based on the agency’s evaluation of price, technical approach, and contractor responsibility. While each factor is vitally important, no contract will be awarded to a contractor found nonresponsible. Responsibility encompasses a broad range of standards. Prospective contractors need to understand these standards and how they are applied.

Policy

The term “responsibility” is used to describe the ability of an offeror to successfully meet its obligations under a contract. Advanced American Construction, Inc. v. United States, 111 Fed. Cl. 205, 221 (2013). Subpart 9.1 of the Federal Acquisition Regulation prescribes policies, standards, and procedures for determining whether prospective contractors and subcontractors are responsible. FAR 9.100.

Purchases by the federal government can be made from, and contracts shall be awarded to, responsible prospective contractors only. FAR 9.103(a). No purchase or award can be made by a government agency unless the contracting officer makes an affirmative determination of responsibility. In the absence of information clearly indicating the prospective contractor is responsible, the contracting officer shall make a determination of nonresponsibility. FAR 9.103(b). A prospective contractor must affirmatively demonstrate not only its own responsibility, but also when necessary, the responsibility of its proposed subcontractors. FAR 9.103(c).

The FAR notes that the award of a contract to a supplier based on lowest evaluated price alone can be a false economy if there are subsequent default, late deliveries, or other unsatisfactory performance issues resulting in additional contractual or administrative costs. FAR 9.103(c). Although it is important that government purchases be made at the lowest price, this does not require an award to a contractor solely because that supplier submits the lowest offer. Id.

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