To protect the Government’s interest and to ensure timely delivery of whatever quantities the Government needs, contracting officers, prior to award, must make an affirmative determination that the prospective contractor is "responsible" i.e..is capable of performing the contract.
Before making that determination, the contracting officer must have in his possession or must obtain information sufficient to satisfy himself that the prospective contractor
- has adequate financial resources or the ability to obtain such resources
- is able to comply with required delivery schedule
- has a satisfactory record of performance
- has a satisfactory record of integrity, and
- is otherwise qualified and eligible to receive an award under appropriate laws and regulations.
If the foregoing information is not already in the contracting officer's possession, he/she must obtain it through preaward surveys conducted by the contract administration office or contract audit office responsible for the plant or geographic area where the plant is located.
The necessary data is collected by contract administration personnel from available data or through plant visits, phone calls, and correspondence. This data is entered on Standard Forms 1403 (General Information), 1404 (Technical), 1405 (Production), 1406 (Quality Assurance), 1407 (Financial Capability), and 1408 (Accounting System) in detail commensurate with the dollar value and complexity of the procurement.
Although these forms are intended to be completed by the contracting administration folks, they are, in practice, often forwarded to the contractor (or prospective contractor) to complete. The Government then needs only to take minimal steps to validate the information or to somehow gain some assurance that the information is reasonably sufficient.
There is preparation costs associated with each of these Standard Forms. The Government estimates that it takes an average of 24 hours to complete each of the six forms. In our experience - primarily with the SF 1408 (Accounting System) this estimate is understated. Any contractor undergoing a preaward accounting system assessment by a contract audit organization will spend considerably more than 24 hours interacting and responding to auditors. The good news is that contractors must endure such reviews infrequently - once the Government has the information necessary to make a responsibility assessment on their own, there is no longer a need to have contractors furnish the same information every time it bids on a contract.
About three years ago, we presented a series detailing each of the preaward Standard Forms. You can read these posts by clicking on the following links.
SF 1403 - General
SF 1404 - Technical
SF 1405 - Production
SF 1406 - Quality Assurance
SF 1407 - Financial Capability
SF 1408 - Accounting System