In addition to receiving award preferences, small businesses are granted special procedures for meeting responsibility determinations required before an award is made.  To be deemed responsible all contractors, small or large, must meet the following qualifications: (1) adequate financial resources to perform (2) ability to meet delivery or performance schedules (3) satisfactory performance record (4) satisfactory record of integrity and business ethics (5) necessary organization, experience, accounting, operations controls and technical skills or ability to acquire them (6) necessary production, construction and technical equipment and facilities or ability to acquire them and (7) not prohibited under applicable laws and regulations.  Normally a CO makes the final determination as to a firm’s responsibility but a small business has the right to have the SBA make the final determination of responsibility if the CO’s negative judgment would result in not receiving an award.  The SBA does so by issuing a Certificate of Competency (COC) stating the holder is responsible for the purpose of receiving and performing a specific government contract.

If a Contracting Officer determines a small business otherwise eligible to receive an award lacks certain elements of responsibility the CO must withhold contract award and refer the matter to the cognizant SBA area office.  The burden is on the offeror to apply for a COC.  Upon receipt of a referral from the CO, the SBA has 15 business days (longer if CO and SBA agree) to inform the small business of the Contracting Officer’s determination and offer it an opportunity to apply to the SBA for a COC.  The SBA Area office will either notify the small business and CO the COC is denied or issue the COC for contracts of $25 million or less (over $25 million, it goes to SBA headquarters).  The Contracting Officer must proceed with award to another offeror if the SBA has not issued the COC within 15 days or longer if CO and SBA agree.  If the SBA notifies the agency of its intent to issue a COC outside of the 15 day period and an award has not yet been made, the agency must award the contract to the COC applicant.  The COC procedures do not apply to an agency’s decision that (1) certain technical requirements are necessary (2) the offer is not technically acceptable (3) the bid is non-responsive or (4) an agency is deciding whether an offer is within the competitive range for negotiated procurements even though some factors may relate to responsibility.  Unless there is clear fraud or bad faith, most protests of SBA’s denial of responsibility are not successful.

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