One thing that small businesses struggle with is the perception by contracting activities that all small businesses are “mom and pop shops.” That is, a couple of people who get together and say “I can do that!” but who do not have the resources to actually start up and manage a federal contract of the size and complexity for which they are competing.
To be determined responsible, prospective contractors must meet general standards, which include the following seven criteria related to contractors’ capabilities and conduct: (1) adequate financial resources; (2) ability to comply with the delivery or performance schedule; (3) satisfactory performance record; (4) satisfactory record of integrity and business ethics; (5) necessary organization and experience; (6) necessary equipment and facilities; and (7) otherwise qualified and eligible.
In the next few blogs we’re going to look at things you can do to prove you are a “responsible” contractor within the meaning of FAR 9.104.
- Adequate Financial Resources: It’s an old adage, but true, that you must have money to make money. You need to show that you have the money (or access to it, such as a line of credit), to be able to pay your staff, buy your materials, and pay your bills for two to three months before you receive your first paid invoice from the government. Providing a copy of your year-end accounting statements and a statement from your bank confirming that you have a line of credit with them up (be specific about the amount), and that you are in good standing with them, will go a long, long way to establishing your company’s financial responsibility. (Check out our podcast, What is a Financial Responsibility Determination? for more information.)
- Ability to Meet the Delivery or Performance Schedule. I think this one is closely related to the sixth criteria list above which includes having the necessary equipment and facilities. To meet the delivery or performance schedule you need to have the skilled manpower as well as the production, construction, and technical equipment and facilities or the ability to obtain them. If you are a manufacturing firm (for example), then you will want to provide information regarding how big your facilities are, including how much space you plan to use for performance of this contract; the type and quantity of your significant equipment and tools that you have that will be used under the contract; and how many employees (and their skills) that you have (or will be bringing on) to perform this contract. If you are running at 100% capacity, what are your plans for expansion? Or do you plan to run a second shift to accommodate all of your work?
A picture is worth a thousand words, so consider including pictures that tell your story more eloquently than you can in words. Provide a copy of your facility floor plan showing where this contract will be performed. If you have a specialized piece of equipment that you will use on their contract that makes your process more efficient and cost effective for the government, include a picture of it being used in your facility. Be sure and tell the government what the equipment means for them.
For firms providing professional and support services, manpower is your bread and butter. Include a qualifications table (for example), to show how many employees you have with the specific skill sets that are required for this contract. Does the contract require clearances or special certifications or licenses to be able to perform work of that type in that location? Include that information, too.
Remember: The focus needs to be on what this particular customer cares about, not on you! Focus on the things that are important to this particular customer for satisfactory performance of their contract.
In my next blog, I’ll talk more in-depth about how you can demonstrate your satisfactory record of performance, integrity, and business ethics, and some tips for showing that you have the necessary organization and experience.
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