Determining Contractor Responsibility

Q. What are the components of a responsibility determination? A. FTA Circular 4220.1E provides at paragraph 7.h. that “Grantees shall make awards only to responsible contractors possessing the ability to perform successfully under the terms and conditions of the proposed contract. Consideration shall be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources.” This means that the proposed contractor must: Have adequate financial resources to perform the contract, or the ability to obtain them, Be able to comply with the required or proposed delivery or performance schedule, taking into consideration all existing commercial and governmental business commitments, Have a satisfactory performance record, Have a satisfactory record of integrity and business ethics, Have the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain them, Have necessary production, construction, and technical equipment and facilities, or the ability to obtain them, Be in compliance with affirmative action and disadvantaged business program requirements, and Be otherwise qualified and eligible to receive an award under applicable laws and regulations. Certain procurements may require special standards of responsibility requiring contractors to have specialized expertise or facilities in order to perform the contract adequately. These special standards of responsibility must be set forth in the solicitation. Failure to meet the special standards will disqualify a bidder from consideration for award. An example of a special responsibility standard would be the special quality assurance requirement concerning measuring and testing facilities and manufacturing controls which must be met by prospective bus manufacturers.

Q. What is the Dollar Threshold for making a written Determination of Contractor Responsibility? Does it apply to Purchase orders? How detailed must it be? Must it be in writing regardless of the threshold? A. The Federal Transit Administration does not require its grantees to make a written determination of contractor responsibility for small purchases (those under $100,000). In reviewing the FAR Subpart 9.1, it would seem that a determination of contractor responsibility is required for "purchases" as well as "awards" - 9.103 (b). It is not clear, however, that FAR requires a written determination for small purchases. 9.103 (b) does require an "affirmative determination" of responsibility. FAR Subpart 13.101 deals with procedures for small purchases and envisions a scenario when a CO determines a contractor to be nonresponsible, in which case the CO is to comply with Subpart 19.6 with respect to Certificates of Competency before rejecting a quotation. Once again, however, this does not clearly require a written determination of responsibility for small purchases, only the CO's decision as to responsibility or nonresponsibility. We would conclude from these FAR references that the FAR does envision the CO making a responsibility determination but the FAR leaves a great deal of discretion in how the decision is made and to what extent it is documented. _______________ * The FAR is available on the Internet at: http://www.arnet.gov/far/

Q. Can project-related experience be a condition of contract award? Can project-related experience be an evaluation factor? We're requiring vendors to submit examples of at least three contracts of comparable size and type as part of their proposals. We feel that previous experience is a necessary factor of project award. A Contractor states that the minimum experience requirement indicated above is in conflict with Section 8(b) of the FTA C. 4220.1D. Section 8(b) specifically prohibits grantees from requiring "unnecessary experiences" in all procurement transactions. A. Project-related experience should be a factor related to the capability of the offeror to perform the contract; i.e., a factor for determining the offeror's responsibility, not responsiveness. As a responsibility issue, past experience may be discussed with the company after proposals are submitted. For further guidance on determining contractor responsibility, see the Best Practices Procurement Manual (BPPM), Section 5.1* - "Responsibility of Contractor." We would think that requiring three previous projects of the same size as the present procurement would be an excessive experience requirement. And to insist on this as a condition of bidding would seem unreasonable. Our opinion would be that to require one project of similar size, successfully completed, with perhaps several more of smaller size would be sufficient to demonstrate that the offeror has the capability to perform your contract. In any case, we would advise you to be flexible about the number of past projects completed and their size. It may be virtually impossible, for example, for a supplier to have completed three projects of the size of the city you belong to. ____________ * Section 5.1 of the BPPM is available on the Internet.

Q. Is there a requirement that a request for financial statements be made of all proposing contractors (to be used to help determine financial responsibility) and be included in the RFP, or can they be requested prior to award from the selected contractor only? This is for a T&M master contract where prices are being considered as part of the evaluation criteria. A. The topic of Contractor Responsibility is covered in the Best Practices Procurement Manual, Section 5.1 - Responsibility of Contractor. Any issue related to the determination of responsibility may be discussed with the apparent low bidder or winning offeror prior to award. Thus you may ask for financial statements from the apparent winning contractor after proposals have been evaluated. You need not request this information from all offerors in the RFP. The types of information that may prove useful in the responsibility determination are discussed in the BPPM section 5.1.3 - Obtaining Information for Determination of Responsibility. All of this information may be obtained after proposals are evaluated and need not be included in the RFP.