Tuesday, May 10, 2011

Responsibility Determinations - Equipment and Facilities

We have been discussing the requirement for contracting officers to make affirmative determinations on prospective contractors' responsibility prior to awarding contracts. Affirmative determinations are differentiated from passive determinations. A passive determination would read something along the lines of "we are not aware of any information that would lead us to believe this particular company is not responsible". An affirmative determination requires that the contracting officer develop and document support for each of the seven responsibility criteria. Today we are discussing the sixth of the seven criteria, equipment and facilities.

According to FAR 9-104-1(f), prospective contractors must have the necessary production, construction, and technical equipment and facilities, or the ability to obtain them. This criteria could almost be coded a "not applicable" for service contracts, where, for example, the scope of work called for the contractor to provide labor in support of base services and does not require any investments in capital facilities or equipment. But for manufacturing, construction, and certain research and development, the need for facilities and equipment is paramont.

If a company does not have the requisite facilities or equipment, they are not necessarily disqualified from the competition. The standard allows for prospective contractors to demonstrate that they have the ability to obtain resources. This demonstration must include "acceptable evidence" in the eyes of and the opinion of the contracting officer. Acceptable evidence normally consists of a commitment or explicit arrangement, that will be in existence at the time of contract award, to rent, purchase, or otherwise acquire the needed facilities, equipment, other resources, or personnel. If you fall into this category, it is extremely important to prepare and submit (or have ready to submit) documentation that will satisfy this requirement.

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