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Applicability.

This subpart applies to procurement, advertised or negotiated, from contractors located in the United States, its possessions, or Puerto Rico and shall be applied in other places except where inconsistent with the laws and customs of the place where the prospective contractor is located. It is not applicable to procurement from (a) other governments, including State and local governments; (b) Canadian Commercial Corporation; (c) other United States Government departments and agencies, or their instrumentalities (such as Federal Prison Industries, Inc.); or (d) National Industries for the Blind.

§ 1.902 General policy.

Purchases shall be made from, and contracts shall be awarded to, responsible prospective contractors only. A responsible prospective contractor is one which meets the standards set forth in §§ 1.9031 and 1.903-2, and such special standards as may be prescribed in accordance with $1.903-3 and by overseas commanders. The award of a contract to a supplier based on lowest evaluated price alone can be false economy if there is subsequent default, late deliveries, or other unsatisfactory performance resulting in additional procurement or administrative costs. While it is important that Government purchases be made at the lowest price, this does not require an award to a marginal supplier solely because he submits the lowest bid or offer. A prospective contractor must demonstrate affirmatively his responsibility, including, when necessary, that of his proposed subcontractors. The contracting officer shall make a determination of nonresponsibility if, after compliance with §§ 1.905 and 1.906, the information thus

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Except as otherwise provided in §§ 1.903-1.903-4, a prospective contractor must:

(a) Have adequate financial resources, or the ability to obtain such resources as required during performance of the contract (see Defense Contract Financing Regulations, Subpart B, Part 163 of this chapter, and any amendments thereto; see also §§ 1.904-3 and 1.905-2; for SBA certificates of competency, see § 1.705-4);

(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 (for SBA certificates of competency, see § 1.705-4);

(c) Have a satisfactory record of performance (contractors who are seriously deficient in current contract performance, when the number of contracts and the extent of deficiency of each are considered, shall, in the absence of evidence to the contrary or circumstances properly beyond the control of the contractor, be presumed to be unable to meet this requirement). Past unsatisfactory performance, due to failure to apply necessary tenacity or perseverance to do an acceptable job, shall be sufficient to justify a finding of nonresponsibility and in the case of small business concerns, shall not require submission of the case to the Small Business Administration; see 88 1.705-4(c) (5) and 1.905-2;

(d) Have a satisfactory record of integrity; and

(e) Be otherwise qualified and eligible to receive an award under applicable laws and regulations; e.g., Subpart F, Part 12 of this chapter.

[30 F.R. 11998, Sept. 21, 1965, as amended at 31 F.R. 13329, Oct. 14, 1966]

§ 1.903-2 Additional standards.

(a) Standards for production, maintenance, construction, and research and development contracts. In addition to the standards in § 1.903-1, in procurement involving production, maintenance, construction (see § 18.106 of this chapter), or research and development work (and in other procurement 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; quality assurance measures, including those applicable to materials produced or services performed by subcontractors) (see § 1.903-4); 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 § 2.201 (a) (23)), 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 § 1.904-3.

(b) Standards for food. Procurement of food shall be made only from those sources which, in addition to meeting the standards in § 1.903-1, are approved with respect to sanitation in accordance with standards and procedures prescribed in AR 40-657, NAVSANDA PUB 395, AFR 160-48, and NAVMC 2573.

§ 1.903-3 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 particular procurement or class of procurements. Such special standards may be particularly desirable where a history of unsatisfactory performance has demonstrated the need for insuring the existence of unusual expertise or specialized facilities necessary for adequate contract performance. The resulting standards shall form a part of the solicitation and shall be applicable to all bidders or offerors. § 1.903-4 Ability to meet certain minimum standards.

Except to the extent that a prospective contractor proposes to perform the con

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Except as otherwise provided in § 1.904-2, no purchase shall be made from, and no contract shall be awarded to, any person or firm unless the contracting officer first makes, signs, and places in the contract file, an affirmative determination that the prospective contractor is responsible within the meaning of § 1.902. The determination of responsibility shall contain a statement justifying the determination. Where a certificate of competency has been issued, the affirmative determination need not be made as to the factors covered by the certificate of competency. Where a bid or offer on which an award would otherwise be made is rejected because the prospective contractor is found to be nonresponsible, a determination of nonresponsibility shall be made, signed, and placed in the file. The determination of nonresponsibility shall set forth the basis of the determination. Supporting documents or reports, including any preaward survey reports (see § 1.905-4) and SBA certificate of competency (see § 1.705-4) shall be attached to the

determination.

§ 1.904-2 Exceptions.

Written determinations of responsibility need not be made in the case of: (a) Purchases estimated to be $10,000 or less;

(b) Orders under existing Government contracts (except orders of more than $10,000 under basic ordering agreements); or

(c) Contracts for perishable subsistence available for immediate shipment. However, contracting officers shall not knowingly make any purchases from, or award contracts to, persons or firms other than responsible prospective contractors, notwithstanding the exceptions in this section.

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(a) Affiliated concerns (see § 2.201(a) (23)) shall be considered as separate entities in determining whether the one of them which is to perform the contract meets the applicable standards for a responsible prospective contractor (but see § 1.701-1 with respect to status as a small business concern).

(b) Notwithstanding the above, the record of performance and integrity of affiliated concerns which may adversely affect the responsibility of the prospec⚫tive contractor shall be considered by the contracting officer when making a determination of responsibility.

§ 1.905 Procedures for determining responsibility of prospective contrac

tors.

§ 1.905-1 General.

I (a) Before making a determination of responsibility (see § 1.904), the contracting officer shall have in his possession or obtain information sufficient to satisfy himself that a prospective contractor currently meets the minimum standards set forth in § 1.903, to the extent that such standards are applicable to a specific procurement.

Each

(b) Maximum practicable use shall be made of currently valid information on ⚫ file or within the knowledge of personnel in the Department of Defense. Department shall, at such level and manner as it deems appropriate, maintain useful records and experience data for the guidance of contracting officers in the placement of new procurement, and shall inform its contracting officers and the other Departments of the means of access thereto. Notwithstanding this #direction contract administration offices shall maintain files of information reflecting upon the ability of contractors to perform Government contracts successfully.

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istration office is requested to perform a pre-award survey and it has been notified of the existence of unfavorable information relative to the contractor, it shall obtain the details including full supporting information. Careful and full consideration shall be given such information. If a contract administration office becomes aware of a prospective contract award to a contractor about whom unfavorable information exists and no pre-award survey has been (1) requested, it shall immediately notify the purchasing office concerned, and (2) secure the details of such unfavorable information as if it were performing a pre-award survey and advise the purchasing office concerned. The purchasing office shall give full consideration to such advice in determining whether an award should be made.

(d) Generally, information necessary to make determinations of responsibility shall be obtained only concerning prospective contractors within range for an award.

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Generally, information regarding the responsibility of a prospective contractor (including pre-award surveys (see § 1.905-4) when deemed necessary) 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 § 1.903-1(a)) and performance capability (see § 1.903–1(b)) shall be obtained on as current a basis as feasible with relation to the date of contract award. § 1.905-3 Sources of information. Information regarding the responsibility of prospective contractors shall be sought among the following sources:

(a) The Joint Consolidated List of Debarred, Ineligible, and Suspended Contractors (see § 1.601).

(b) From the prospective contractorincluding representations and other information contained in or attached to bids and proposals; replies to questionnaires; financial data, such as balance sheets, profit and loss statements, cash forecasts, financial history of the contractor and affiliated concerns; current and past production records; personnel

records; and lists of tools, equipment, and facilities; written statements or commitments concerning financial assistance and subcontracting arrangements; and analyses 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 affidavits concerning their ability to meet any of the minimum standards set forth in § 1.903, and company ownership and control (see § 2.201 (a) (23)).

(c) Existing information within the Department of Defense-including_records (e.g., § 4.215) on file and knowledge of personnel within the purchasing office making the procurement, other purchasing offices, related activities, contract administration offices, audit activities, and offices concerned with contract financing.

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

(e) Other sources-including suppliers, subcontractors, and customers of the prospective contractor; banks and financial companies; commercial credit agencies; Government departments and agencies; purchasing and trade associations; better business bureaus and chambers of commerce.

§ 1.905-4 Pre-award surveys.

(a) General. A pre-award survey is an evaluation by a contract administration office of a prospective contractor's capability to perform under the terms of a proposed contract. Such evaluation shall be used by the contracting officer 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 on-site inspection of plant and facilities to be used for performance on the proposed contract, or (4) any combination of the above. Pre-award surveys shall be conducted in accordance with Appendix K, Pre-Award Survey Procedures (§ 30.7 of this chapter).

(b) Circumstances under which performed. A pre-award survey shall be required when the information available to the purchasing office is not sufficient to enable the contracting officer to make a determination regarding the responsibility of a prospective contractor (but see

paragraph (c) of this section). The contracting officer shall request a pre-award survey on Pre-Award Survey of Prospective Contractor (DD Form 1524) (see F200.1524) in the detail commensurate with the dollar value and complexity of the procurement. In requesting a preaward survey, the contracting officer shall call to the attention of the contract administration office any factors which should receive special emphasis. The factors selected by the contracting officer shall be applicable to all firms responding to the solicitation and shall be considered in all pre-award surveys performed for the same solicitation. In the absence of specific instructions from the purchasing office, the scope of the pre-award survey shall be determined by the contract administration office conducting the survey.

(c) Workload and financial capacity Regardless of the apparent sufficiency of information available to the purchasing office indicating responsibility with respect to the standards set forth in § 1.903-1 (a) and (b), in procurements which are significant either in dollar value or in the critical nature of the requirement, consideration shall be given to requesting the contract administration office to verify information regarding current workload and financial capacity. § 1.906 Subcontractor responsibility.

(a) To the extent that a prospective contractor proposes to perform the contract by subcontracting, determinations of prospective subcontractors' responsibility may be necessary in order to determine the responsibility of the prospective prime contractor. Determinations concerning prospective subcontractors' S responsibility shall generally be a function performed by the prospective prime contractor. (But see § 1.603 (c) relating to subcontractors listed on the Joint Consolidated List of Debarred, Ineligible, and Suspended Contractors.) A prospective prime contractor may be required to (1) indicate, in writing, the responsibility of proposed subcontractors, or (2) show evidence of an acceptable and effective purchasing and subcontracting system which encompasses a method for determining subcontractor capability.

(b) Notwithstanding the general responsibility of a prospective contractor to demonstrate the responsibility of his prospective subcontractors, it may be in the Government's best interest to make

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a direct determination of the responsibility of one or more prospective subcontractors prior to award of the prime contract. Examples of when this may be particularly suitable are the procurements of (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. The determination of responsibility of a proposed subcontractor by the Government shall be based on the same factors as are applicable in a determination of responsibility of a prospective prime contractor. § 1.907 Disclosure of pre-award data.

Data, including information obtained from a pre-award 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 on their request, and shall be made available to Department of Defense procurement personnel upon request in accordance with § 1.905-1. 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 pre-award survey may be discussed by the contracting officer with the company surveyed as provided in §§ 2.408 and 3.508 of this chapter, or if appropriate, by the head of the contract administration office or his designee.

130 F.R. 14076, Nov. 9, 1965] Subpart J-Publicizing Procurement Actions

§ 1.1001 General policy.

It is Department of Defense policy to increase competition by publicizing procurements which offer competitive opportunities for prospective prime contractors or subcontractors, thus assisting small business and labor surplus area concerns and broadening industry participation in Defense procurement

programs.

[25 F.R. 14102, Dec. 31, 1960]

§ 1.1002 Dissemination of information relating to invitations for bids and requests for proposals.

[28 F.R. 12547, Nov. 23, 1963]

§ 1.1002-1 Availability of invitations for bids and requests for proposals at the contracting office.

A reasonable number of copies of invitations for bids and requests for proposals, which are required to be publicized in the Commerce Business Daily, including specifications and other pertinent information, shall be maintained at the contracting office. Upon request, prospective contractors not initially solicited may be mailed or otherwise provided copies of such invitations for bids or requests for proposals to the extent they are available. Where a solicitation for proposals has been limited as a result of a determination that only a specified firm or firms possess the capability to meet the requirements of a procurement, requests for proposals shall be mailed or otherwise provided upon request to firms not solicited, but only after advice has been given to the firm making the request as to the reasons for the limited solicitation and the unlikelihood of any other firm being able to qualify for a contract award under the circumstances; but see § 4.205–2 of this chapter. In addition, to the extent that invitations for bids or requests for proposals are available, they shall be provided on a "first come-first served" basis, for pick up at the contracting office, to publishers, trade associations, procurement information services, and other members of the public having a legitimate interest therein; otherwise, the contracting office may limit the availability of such information to perusal at the contracting office (for construction, see § 18.205(c) of this chapter). In determining the "reasonable number" of copies to be maintained, the contracting officer shall consider, among other things, the extent of initial solicitation, reproduction costs, the nature of the procurement, whether access to classified matter is involved, the anticipated requests for copies based upon responses to synopses and other means of publication in previous similar situations, and the fact that publishers and others who disseminate information regarding proposed procurements normally do not require voluminous specifications or drawings. With regard to classified procurements, the foregoing instructions apply to the extent consistent

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