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(d) A determination of nonresponsibility shall be made by the contracting officer if, after compliance with §§ 11.1205 and 1-1.1206, the information obtained does not indicate clearly that the prospective contractor is responsible. Recent unsatisfactory performance regarding either quality or timeliness of delivery, whether or not default proceedings were instituted, is an example of a problem which the contracting officer must consider and resolve as to its impact on the current procurement prior to making an affirmative determination of responsibility. Where a contracting officer has doubts regarding the productive capacity or financial strength of a prospective contractor which cannot be resolved affirmatively, the contracting officer shall determine that the prospective contractor is nonresponsible. (See § 1-1.708 if a small business concern is involved.)

§ 1-1.1203 Minimum standards for responsible prospective contractors.

§ 1-1.1203-1 General standards.

A prospective contractor must meet the following requirements, unless otherwise provided in this section:

(a) Have adequate financial resources, or the ability to obtain such resources as required during performance of the contract;

(b) Be able to comply with the required or proposed delivery or performance schedule, taking into consideration all existing business commitments, commercial as well as governmental;

(c) Have a satisfactory record of performance. Contractors who are or have been seriously deficient in current or recent contract performance, when the number of contracts and the extent of deficiency of each are considered (in the absence of evidence to the contrary or circumstances properly beyond the control of the contractor) shall be presumed to be unable to meet this requirement. Past unsatisfactory performance will ordinarily be sufficient to justify a finding of nonresponsibility;

(d) Have a satisfactory record of integrity and business ethics;

(e) Have a certificate of competency and/or a determination of eligibility from SBA if the prospective contractor is a small business concern and is determined to be nonresponsible and/ or ineligible by the contracting officer (see §§ 1-1.701-7 and 1-1.708); and

(f) Be otherwise qualified and eligible to receive an award under applicable laws and regulations; e.g., see Subpart 1-12.8.

[36 FR 17419, Aug. 31, 1971, as amended at 43 FR 26010, June 16, 1978]

§ 1-1.1203-2 Additional standards.

(a) In addition to the standards in § 1-1.1203-1, where procurements involve production, maintenance, construction (see § 1-18.106), or research and development work (and in other procurements as appropriate), a prospective contractor must:

(1) Have the necessary organization, experience, operational controls, and technical skills, or the ability to obtain them. This standard includes, where appropriate, such elements as adequacy of production control procedures and quality assurance measures, including those applicable to materials produced or services performed by subcontractors (see § 1-1.1203-4); and

(2) Have the necessary production construction, and technical equipment and facilities, or the ability to obtain them. Where a prospective contractor proposes to use the facilities or equipment of another concern, not a subcontractor, or of his affiliate (see § 11.701-2), all existing business arrangements, firm or contingent, for the use of such facilities or equipment shall be considered in determining the ability of the prospective contractor to perform the contract (see also § 1-1.12034).

(b) Procurement of subsistence shall be made only from those sources which in addition to meeting the standards in § 1-1.1203-1, are approved with respect to agency standards and procedures.

§ 1-1.1203-3 Special standards.

When the situation warrants, contracting officers shall develop with the assistance of technical personnel or other specialists, special standards of responsibility to be applicable to a par

icular procurement or class of prourements. Such special standards ay be particularly desirable where a istory of unsatisfactory performance as demonstrated the need for insurng the existence of unusual expertise r specialized facilities necessary for dequate contract performance. The esulting standards shall form a part f the solicitation and shall be applicale to all bidders or offerors.

1-1.1203-4 Ability to meet certain minimum standards.

Except to the extent that a prospecive contractor proposes to perform he contract by subcontracting (see 1-1.1206), acceptable evidence of his ability to obtain" equipment, faciliies, and personnel (see §§ 1-1.1203(a) and 1-1.1203-2) shall be required. f these are not represented in the ontractor's current operations, they hould normally be supported by a ommitment or explicit arrangement, which is in existence at the time the ontract is to be awarded, for the ental, purchase, or other acquisition f such resources, equipment, faciliies, or personnel.

1-1.1204 Determination of responsibility or nonresponsibility.

1-1.1204-1 Requirement.

(a) No purchase shall be made from, nd no contract shall be awarded to, ny person or firm unless the conracting officer first makes an affirmaive determination that the prospecive contractor is responsible within he meaning of § 1-1.1202. Such afirmative determinations shall be doumented in accordance with agency procedures. In this regard, however, he signing of a contract may be leemed to be an affirmative determination by the contracting officer that he prospective contractor is responsile with respect to that contract. Supporting documents and reports, includng any preaward survey reports (see 1-1.1205-4) and any applicable SBA certificate of competency (see § 14.708), shall be made a part of the contract file.

(b) Where a bid or offer on which an award would otherwise be made is rejected because the prospective con

tractor is found to be nonresponsible, a determination of nonresponsibility shall be made, signed, and placed in the file. (See § 1-1.708 if a small business concern is involved.) The determination of nonresponsibility shall set forth the basis of the determination. § 1-1.1204-2 Affiliated concerns.

(a) Affiliated concerns generally shall be considered as separate entities in determining whether the concern which is to perform the contract meets the applicable standards for a responsible prospective contractor. (See § 1-1.701 regarding the use of the term "affiliates" in the definition of a small business concern; see also the definition of "affiliates" in § 1-1.701-2 which shall apply to all business concerns, including small business concerns, for the purpose of this Subpart 1-1.12.)

(b) The record of performance and integrity of an affiliated concern which may adversely affect the responsibility of the prospective contractor shall be considered by the contracting officer when making a determination of responsibility.

§ 1-1.1205 Procedures for determining responsibility of prospective contractors.

§ 1-1.1205-1 General.

(a) Before making a determination of responsibility (see § 1-1.1204), the contracting officer shall have in his possession information sufficient to satisfy himself that a prospective contractor currently meets the minimum standards set forth in § 1-1.1203, to the extent that such standards are applicable to a specific procurement.

(b) Maximum practicable use shall be made of currently valid information which is on file within the agency. Each agency shall, at such level and in such manner as it deems appropriate, maintain records and experience data which shall be made readily available for use by contracting officers in the placement of new procurement.

§ 1-1.1205-2 When information will be obtained. Generally,

information regarding the responsibility of a prospective contractor including preaward surveys

when deemed necessary (see § 11.1205-4), shall be obtained promptly after bid opening or receipt of proposals. However, in negotiated procurements, especially those involving research and development, such information may be obtained before the issuance of requests for proposals. Notwithstanding the foregoing, information regarding financial resources (see § 1-1.1203-1(a)) and performance capability (see § 1-1.1203-1 (b) and (c)) shall be obtained on as current a basis as feasible with relation to the date of contract award.

§ 1-1.1205-3 Sources of information.

Information regarding the responsibility of prospective contractors may be obtained from the following


(a) Any list of debarred, suspended, or ineligible concerns or individuals established pursuant to § 1-1.602;


(b) From the prospective contractor. This should include representations and other information contained in or attached to bids and proposals; replies; replies to questionnaires; data such as balance sheets, profit and loss statements, cash forecasts, and financial histories of the contractor and affiliated concerns; current and past production records; personnel records; lists of tools, equipment, and facilities; written statements or commitments concerning financial assistance and subcontracting arrangements; and analysis of operational control procedures. Where it is considered necessary by the contracting officer to prevent practices prejudicial to fair and open competition or for other reasons, prospective contractors may be required to submit statements concerning their ability to meet any of the minimum standards set forth in § 11.1203, and company ownership and control;

(c) Other information existing within the agency, including records on file and knowledge of personnel within the purchasing office making the procurement, other purchasing offices, related activities, audit activities, and offices concerned with contract financing;

(d) Publications, including credit ratings, trade and financial journals, and business directories and registers; and

(e) Other sources. These should include suppliers, subcontractors, and customers of the prospective contractor; banks and financing institutions; commercial credit agencies; Government departments and agencies; purchasing and trade associations; and better business bureaus and chambers of commerce.

§ 1-1.1205-4 Preaward surveys.

(a) A preaward survey is an evaluation of a prospective contractor's performance capability under the terms of a proposed contract. Such evaluation shall be used by the contracting officer as an aid in determining the prospective contractor's responsibility. The evaluation may be accomplished by use of (1) data on hand, (2) data from another Government agency or commercial source, (3) an onsite inspection of plant and facilities to be used for performance of the proposed contract, or (4) any combination of the above. Preaward surveys shall be conducted in accordance with agency procedures.

(b) A preaward onsite survey shall be made when the information available to a purchasing office (see § 11.1205-3) is not sufficient to enable the contracting officer to make a determination regarding the responsibility of a prospective contractor (see paragraph (c) of this section). When this situation occurs, the contracting officer shall request the appropriate agency officials to make a preaward survey for the purpose of providing needed responsibility information in such detail as is commensurate with the dollar value and complexity of the procurement. In requesting preaward survey, the contracting officer shall identify the factors which he believes should receive special attention. The factors selected by the contracting officer shall be applicable to all firms responding to the solicitation and shall be considered in all preaward surveys performed in connection with the solicitation.


(c) Where a procurement is significant in terms of the dollar value or the critical nature of the requirements, a

verification of the information available regarding current workload and financial capacity shall be considered. The consideration of such a verification shall not be affected by the apparent sufficiency of the information available to the purchasing office to indicate contractor responsibility with respect to the standards set forth in § 1-1.1203-1 (a) and (b).

§ 1-1.1206 Subcontractor responsibility.

(a) To the extent that a prospective contractor proposes to perform the contract by subcontracting, determinations regarding the responsibility of prospective subcontractors may be necessary in order to determine the responsibility of the prospective prime contractor. Determinations concerning the responsibility of prospective subcontractors generally should be made by the prospective prime contractor (see § 1-1.603 relating to subcontractors listed on any list of debarred, suspended, and ineligible contractors). A prospective prime contractor may be required to (1) provide written evidence regarding the responsibility of proposed subcontractors, or (2) show that he has an acceptable and effective purchasing and subcontracting system which includes a method for determining subcontractor responsibil


(b) Notwithstanding the general ability of a prospective contractor to demonstrate the responsibility of his prospective subcontractors, it may be in the best interest of the Government to make a direct determination of the responsibility of one or more prospective subcontractors prior to award of the prime contract. Illustrations of such situations where direct determination would be appropriate include the following: (1) Medical items, (2) supplies or services which are so urgently needed that it is necessary for the Government to go beyond the normal process in determining contractor responsibility, and (3) supplies or services, a substantial portion of which will be subcontracted. Determination of prospective subcontractor responsibility by the Government shall be based on the same factors which are applicable to determinations of

prospective prime contractor responsibility.

§ 1-1.1207 Disclosure of preaward data.

Data, including information obtained from a preaward survey, accumulated for purposes of determining the responsibility of a prospective contractor shall not be released outside the Government, and shall not be made available for inspection by individuals, firms, or trade organizations. Such data may be disclosed to, or summarized for, other elements within the Government upon request. Prior to making a determination of responsibility, such data may be discussed with the prospective contractor as determined necessary by the purchasing office. After an award, the findings of the preaward survey may be discussed by the contracting officer with the company surveyed as provided in § 12.408.

Subpart 1-1.13-Minority Business Enterprises

SOURCE: Subpart 1-1.13 appears at 36 FR 17509, Sept. 1, 1971, unless otherwise noted. § 1-1.1300 Scope of subpart.

This subpart contains policies, procedures, and contract clauses applicable to the participation of minority business enterprises in Government procurement at both the prime and subcontract level which are designed to carry out the purposes of Executive Order 11458, March 5, 1969, as superseded by Executive Order 11625, October 13, 1971.

[40 FR 25674, June 18, 1975]

§ 1-1.1301 Applicability.

This subpart applies only in the United States. As used in this subpart, the term "United States" means the States, its territories and possessions, the Commonwealth of Puerto Rico, the Trust Territory of the Pacific Islands, and the District of Columbia. [40 FR 25674, June 18, 1975]

§ 1-1.1302 Agency programs.

(a) Minority business enterprise programs shall be established by agencies in the procuring activities designated

by each agency. The objective of these programs is to facilitate the participation of minority business enterprises in Government procurement. Accordingly, designations shall be made and actions shall be taken by designees in a manner which will result in the maximum practicable achievement of that objective. The head of each designated procuring activity, or his authorized representative (as provided by agency procedures), shall be responsible for administering the procuring activity's minority business enterprise program which, at a minimum, shall provide for the activity to do the following:

(1) Seek out minority business enterprises and facilitate the placement of such concerns on the agency's source lists;

(2) Solicit offers from the minority business enterprises on the agency's source lists;

(3) Counsel minority business enterprises with respect to business opportunities for the purpose of enhancing their potential participation in Government procurement;

(4) Ensure that minority business enterprises will have an equitable opportunity to compete for contracts, particularly by arranging (i) solicitations, (ii) time for the preparation of bids, (iii) quantities, (iv) specifications, and (v) delivery schedules, to facilitate the participation of minority business enterprises;

(5) Establish operating procedures which accomplish the requirements of this section;

(6) Maintain records showing with respect to minority business enterprises (i) concerns on source lists, (ii) concerns solicited, and (iii) dollar value of awards to such concerns;

(7) Submit semiannual reports based on the data developed pursuant to paragraph (a)(6) of this section to the agency office responsible for the overall management of the agency's minority business enterprise program;

(8) Obtain data on subcontract awards to minority business enterprises on Optional Form 61 from prime contractors which have the Minority Business Enterprise Subcontracting Program clause in their contracts; and

(9) Make data on subcontract awards to minority business enterprises available to agency personnel responsible for the agency's semiannual report on Standard Form 37, Report on Procurement by Civilian Executive Agencies.

(b) The agency office which has overall responsibility for the agency's minority business enterprise program shall review the semiannual reports submitted by procuring activities and shall take action as may be appropriate to ensure the effectiveness of the programs of the agency's individual procuring activities.

[40 FR 25674, June 18, 1975]

§ 1-1.1303 Solicitation representation.

The following representation shall be included in all solicitations other than those involving small purchases made in accordance with Subpart 1-3.6 and all contracts, other than small purchases, which are awarded without reference to a solicitation.


The offeror represents that he [ ] is, [ ] is not, a minority business enterprise. A minority business enterprise is defined as a "business, at least 50 percent of which is owned by minority group members or, in case of publicly owned businesses, at least 51 percent of the stock of which is owned by minority group members." For the prupose of this definition, minority group members are Negroes, Spanish-speaking American persons, American-Orientals, American-Indians, American-Eskimos, and AmericanAleuts.

Failure to execute the representation will be deemed a minor informality and the bidder or offeror shall be permitted to satisfy the requirement prior to award (see § 1-2.405).

[40 FR 25674, June 18, 1975]

§§ 1-1.1304-1-1.1309 [Reserved]

§ 1-1.1310 Subcontracting with minority business enterprises.

§ 1-1.1310-1 General.

It is the policy of the Government that the maximum practicable opportunity to participate in the performance of Government contracts be provided to minority business enterprises

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