When we make private purchase decisions, especially of high-risk nature (like childcare or house renovations—yikes!), we normally do a lot of research to find the right person or company for the job. We typically review their experience, training, insurance, and other resources, as well as references from their previous—and hopefully delighted!—employers or clients.
Similarly, USAID contracting officers must determine that a prospective contractor is responsible before considering their bid for any contract. (Similar requirements exist for grants as well, but I will focus on contracts in this article.) A responsible contractor is one that is able to meet seven standards that address their financial resources, ethics, delivery and equipment capability, and past performance.
This “responsibility determination” is critical for prospective contractors because if they are deemed “not responsible,” they are ineligible for the proposed contract. Even if they are qualified to perform the work and their bid is the lowest, or even if their offer represents the best value for USAID, they must pass this determination.
Responsibility determination, however, is not just USAID’s job: all USAID prime contractors must make a responsibility determination with respect to their proposed subcontractors (subs). Consequently, understanding the requirements for responsibility is important whether your company plans to bid directly or team with a prime partner for any USAID work.
What Are USAID’s Responsibility Standards?
To be determined responsible, prospective contractors and subs must meet seven general performance standards. These standards apply to all contracts, even if they are not incorporated into the solicitation.
- Adequate financial resources: This standard relates to your company’s credit rating, profitability, availability of (or ability to obtain) a credit line for working capital, and a positive tax compliance status.
- Ability to comply with the delivery or performance schedule: This standard involves a potential contractor’s past performance to meet specific project schedules or submit on-time deliverables.
- Satisfactory performance record: This standard concerns any information that may reveal that a prospective contractor had serious deficiencies in performance, including terminations for default; delivery of nonconforming services (e.g., not meeting labor categories’ qualifications); failure to adhere to contract specifications; poor management or technical judgment; failure to perform safely; and, inadequate supervision of subs.
- Satisfactory record of integrity and business ethics: This standard takes into consideration any information regarding convictions or indictments of corporate officers; integrity offenses constituting grounds for suspension under the Federal Acquisition Regulations (FAR); repeated violations of state law; or pending debarments or lawsuits. A lack of integrity on the part of entities with which the contractor has close relationships may also be considered.
- Necessary organization and experience: This standard focuses on prior work experiences (as opposed to performance), as well as the organization of the prospective contractor’s corporation. Inability to implement necessary programs or procedures (e.g., quality assurance), unsatisfactory experience by prior clients, or total lack of experience may all be grounds for a non-responsible determination. When a newly formed company is a prospective contractor, a lack of experience is unavoidable. In that case, USAID may consider the experience of any predecessor firms, when the contractor retains key personnel; parent firms, when their resources would be committed to performing the contract; and personal work experience of principal officers or key employees.
- Necessary equipment and facilities: This standard considers the availability of facilities or equipment—or ability to obtain them—for the performance of the contract’s scope of work.
- Otherwise qualified and eligible: These additional collateral requirements deal with provisions of law and other regulatory areas affecting contractor eligibility, which, in addition to System for Award Management (SAM) registration and completion of all necessary representations and certifications, include:
- Compliance with federal equal employment opportunity requirements;
- Agreement on an acceptable plan for subcontracting with small businesses;
- Confirmation that the company is not a quasi-military armed forces;
- Confirmation that the bidder does not have unavoidable and unmitigated organizational conflicts of interest; and
- Compliance with limitations on subcontracting for small businesses.
Apart from the general performance standards listed above, each contract solicitation may contain additional eligibility standards, such as geographic code restrictions, North American Industry Classification System (NAICS) code compatibility, architect and engineering licensing, etc.
USAID contracting officers consider a range of sources to obtain the responsibility information about a potential prime contractor, including information on past performance. This may include information from systems like the Federal Awardee Performance and Integrity Information System (FAPIIS), the Excluded Parties List System (EPLS), and Contractor Performance Assessment Reporting System (CPARS).
For new prime contractors without information in these government systems, officers will consider a wide variety of other data and documentation, either through contacting prior client references or reviewing documentation submitted by the prospective contractor as part of their proposal (see table).
Prime contractors, in turn, must determine the responsibility of their subs. Often this means that potential subs must provide similar evidence of responsibility to the prime contractor.
What This Means for New Partners
For new partners who are considering submitting proposals to USAID or prime contractors, especially those who have never worked with another U.S. Government agency before, the provision of adequate information for determination of responsibility could be the difference between getting selected for the award or not, even if your proposal is winning at every other level.
Failure to provide necessary information could result in a non-responsible determination because contracting officers need clear information indicating that the prospective contractor is responsible.*
Your responsibility information could be included in the management section or cost notes of your proposal and should substantially cover the areas shown in the table.
Remember, responsibility matters, because USAID wants to make the most of each and every dollar in its budget. Although responsibility documentation may not be easy, it is an important part of the procurement process.
Tips for Success
- Review the Federal Acquisition Regulation (FAR) 9.104 and the general standards of performance.
- Resolve the gaps in information that a USAID contracting officer may identify through references or government systems.
- Gather supplemental information for your company’s responsibility determination following our suggested examples in the table.
- Avoid simply adding a link to your company’s website or pointing to outside information or verification services. USAID contracting officers may review such linked information, but they are not required to.
- Review and update all responsibility information for each proposal.
*The only exception to this rule involves small businesses. Prior to determining that a small business is non-responsible due to lack of information, or upon any other basis, contracting officers must consult the Small Business Administration (SBA), which may—but is not required to—issue a Certificate of Competence declaring the contractor eligible for the award. When the SBA issues a Certificate of Competence, contracting officers shall accept its decision and award the contract to the concerned party.