We just covered each of the elements that a Contracting Officer (CO) must consider when making the Determination of Responsibility for the prospective contractor before every contract award. The CO looks closely at whether you have sufficient resources (e.g., money, manpower, facilities, tools, and equipment) to successfully perform the contract he is about to award to you. But did you catch the last phrase in each one of these elements? The one that says you must have adequate financial resources “…or the ability to obtain them.” The Federal Acquisition Regulation (FAR) 9.104(3)(a) provides further detail on this phrase:
“Except to the extent that a prospective contractor has sufficient resources or proposes to perform the contract by subcontracting, the contracting officer shall require acceptable evidence of the prospective contractor’s ability to obtain required resources... 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.”
Here’s where the rubber hits the road when “proving” you have the ability to perform the contract. You must provide concrete evidence that you actually have not only a plan for obtaining these resources, but have established agreements in place that you can (and should) provide copies of.
- Since money is key to literally everything else, proving that you’ve got this covered is key to your success in convincing the CO that you’ve got this under control. There are plenty of financial institutions (e.g., banks and factoring companies) who provide a variety of funding to help your business meet operating expenses as it grows. Your bank may offer you a line of credit (LOC) based on your history with them, or if you provide some form of collateral. Companies who offer “debtor factoring” do so in a variety of ways using the small businesses’ accounts receivable ledger as collateral. Debtor finance solutions fund slow-paying invoices, which improves the cash flow of the company. Both banks and factoring companies love federal contracts because the federal government guarantees that if it is late in paying the invoice, it will automatically pay interest as specified under the Prompt Payment Act. (See the Department of Treasury, Bureau of the Fiscal Service website for the history of interest rates and the current interest rate the federal government pays for making a late payment on your invoice.)
- Human Resources. Proof of the ability to provide the needed manpower, skills, experience and expertise can come in a variety of forms. For key personnel it might be resumes of the proposed individuals, along with a Letter of Commitment that the individual will come to work for you if you win the contract. It doesn’t have to be a separate letter, but simply a statement at the bottom of the resume signed and dated by the individual saying that their resume is true, accurate and complete, and that they will come to work for you in the stated position if you win the contract. If you usually work with a recruiting company, identify the company specifically (name, address, point of contact info), and tell how long and successfully you’ve worked with them to fill your human resources needs. If you’ve got the staff already, consider including a qualifications chart and the number and type per labor category for the staff you will provide under this contract.
- Facilities, Tools and Equipment. Say you’re located in Tampa, Florida, and the government is not providing facilities for the support staff you will be providing in Denver, Colorado. What are you going to do? As soon as you know this requirement, get busy finding a realtor in Denver, Colorado, who can help you find the size and type of facility you need. If you don’t want to buy a place, tell the agent that you are looking for property to lease in the event you win the contract. In your proposal, provide specific information on the facility, its location and the agreement, and be prepared to provide (or provide in the proposal) a copy of the agreement.
For tools and equipment, identify specifically any specialized items that you will need to purchase or lease to perform the work. Be specific about your source, the arrangement you anticipate using, and the cost.
Although no one wants to have to go down this path, if you are unable to convince a CO that you have the resources to successfully perform the contract, you have the right to request that the CO request a Certificates of Competency (COC) from the cognizant Small Business Administration (SBA) office. While getting a COC does not guarantee that you’ll get the contract award (see Shelley’s blog, Issuance of a COC Does Not Guarantee Award), it does give you one more shot at proving that you have the resources necessary for successful contract performance.
NOTE: If you want to leave a reply to this post, use the comment box below. If you have additional questions/comments on this topic, please post them in the Ask a CO Forum.