FAR 9.104-3—Application of standards.
Plain-English Summary
FAR 9.104-3 explains how the general responsibility standards in FAR 9.104-1 are applied in practice when a contracting officer evaluates a prospective contractor’s ability to perform. It covers four main topics: ability to obtain resources, satisfactory performance record, affiliated concerns, and joint ventures. It also addresses special treatment for small business concerns, including referral to the Small Business Administration for a Certificate of Competency when a small business is found nonresponsible, and the relationship between responsibility and limitations on subcontracting. In practice, this section tells contracting officers what evidence they may require, how to weigh past performance problems, how to treat affiliates and joint ventures, and when small business issues must be referred or evaluated under subcontracting restrictions. The section matters because it turns broad responsibility concepts into concrete evaluation steps that can determine whether a contractor is eligible for award.
Key Rules
Evidence of resources
If a prospective contractor does not already have sufficient resources, or plans to rely on subcontracting, the contracting officer must require acceptable evidence that the contractor can obtain the needed facilities, equipment, personnel, or other resources. The evidence normally must be a commitment or explicit arrangement that will exist at the time of award.
Subcontracting and resources
When evaluating a prime contractor’s compliance with limitations on subcontracting, the contracting officer must consider the contract’s base period and any option periods or quantities if those options are part of the award evaluation. This prevents a contractor from appearing compliant for only part of the performance period.
Poor performance creates presumption
A prospective contractor that is or recently has been seriously deficient in performance is presumed nonresponsible unless the contracting officer finds the problems were beyond the contractor’s control or that the contractor has taken appropriate corrective action. Repeated failure to perform with sufficient tenacity and perseverance is strong evidence of nonresponsibility.
Quality and extent of deficiencies
Failure to meet contract quality requirements is a significant factor in the responsibility determination. The contracting officer must look at both the number of contracts affected and how serious the deficiencies were in each contract before deciding whether the contractor has a satisfactory performance record.
Subcontracting plan compliance
If the pending contract requires a subcontracting plan under FAR subpart 19.7, the contracting officer must also consider the prospective contractor’s recent compliance with subcontracting plans. Poor compliance can weigh against a finding of satisfactory performance.
Affiliates are separate, but relevant
Affiliated concerns are normally treated as separate entities for responsibility purposes, so one affiliate’s status does not automatically control another’s. However, the contracting officer must consider an affiliate’s past performance and integrity when those factors may adversely affect the prospective contractor’s responsibility.
Joint venture past performance
For a joint venture, the contracting officer must consider the joint venture’s own past performance. If the joint venture lacks relevant past performance, the contracting officer must consider the past performance of each party to the joint venture.
Small business referral to SBA
If a contracting officer finds a small business concern nonresponsible, the matter must be referred to the Small Business Administration for a Certificate of Competency decision. The contracting officer does not make the final nonresponsibility outcome for a small business without SBA involvement.
Limitations on subcontracting
A small business that cannot comply with the applicable limitations on subcontracting may be found nonresponsible. If the small business has not agreed to comply with those limitations, it may be considered nonresponsive, depending on the solicitation and clause structure.
Responsibilities
Contracting Officer
Apply the responsibility standards in a practical, evidence-based way; require acceptable proof of resource availability when needed; evaluate past performance, quality problems, corrective actions, and subcontracting-plan compliance; consider affiliate and joint-venture performance as required; and refer nonresponsible small business concerns to SBA for a Certificate of Competency.
Prospective Contractor
Show that it can obtain the facilities, equipment, personnel, and other resources needed to perform; maintain a satisfactory performance record; take corrective action when performance problems occur; and, if a small business, agree to and comply with applicable limitations on subcontracting and any required subcontracting plan.
Small Business Administration
Review referrals of small business concerns found nonresponsible and decide whether to issue a Certificate of Competency, which can override the contracting officer’s nonresponsibility determination for purposes of award eligibility.
Affiliated Concerns
Provide performance and integrity information that may be relevant to the prospective contractor’s responsibility when affiliate conduct could adversely affect the award decision.
Joint Venture Parties
Support the responsibility review by providing the joint venture’s past performance information, and if the joint venture lacks its own record, the individual parties’ past performance information.
Agency/Source Selection Team
Ensure the responsibility determination is based on the correct contract period, including options when relevant, and that subcontracting-plan and subcontracting-limitations issues are evaluated consistently with the solicitation and applicable clauses.
Practical Implications
Contracting officers should not accept vague promises of resources; they should look for concrete commitments that will exist by award, such as leases, purchase agreements, staffing commitments, or subcontracting arrangements.
Past performance problems do not automatically bar award, but serious or recent deficiencies create a presumption of nonresponsibility unless the contractor can show the issues were outside its control or have been corrected.
For small businesses, a nonresponsibility finding is not the end of the road because SBA may issue a Certificate of Competency; contracting officers must remember to refer the matter instead of stopping at their own determination.
Joint ventures and affiliates require careful review because the contractor’s own record may not tell the whole story; the contracting officer may need to examine the performance and integrity of related entities or individual venturers.
Limitations on subcontracting can affect both responsibility and responsiveness depending on the solicitation and the contractor’s agreement to comply, so contracting officers and offerors should read the solicitation and clauses closely to avoid misclassification.
Official Regulatory Text
(a) Ability to obtain resources . 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 (see 9.104-1 (a), (e), and (f)). 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. Consideration of a prime contractor’s compliance with limitations on subcontracting shall take into account the time period covered by the contract base period or quantities plus option periods or quantities, if such options are considered when evaluating offers for award. (b) Satisfactory performance record . A prospective contractor that is or recently has been seriously deficient in contract performance shall be presumed to be nonresponsible, unless the contracting officer determines that the circumstances were properly beyond the contractor’s control, or that the contractor has taken appropriate corrective action. Past failure to apply sufficient tenacity and perseverance to perform acceptably is strong evidence of nonresponsibility. Failure to meet the quality requirements of the contract is a significant factor to consider in determining satisfactory performance. The contracting officer shall consider the number of contracts involved and the extent of deficient performance in each contract when making this determination. If the pending contract requires a subcontracting plan pursuant to subpart 19.7 , The Small Business Subcontracting Program, the contracting officer shall also consider the prospective contractor’s compliance with subcontracting plans under recent contracts. (c) (1) Affiliated concerns . Affiliated concerns (see "Concern" in 19.001 and "Small business concern" in 2.101 ) are normally considered separate entities in determining whether the concern that is to perform the contract meets the applicable standards for responsibility. However, the contracting officer shall consider the affiliate’s past performance and integrity when they may adversely affect the prospective contractor’s responsibility. (2) Joint ventures. For a prospective contractor that is a joint venture, the contracting officer shall consider the past performance of the joint venture. If the joint venture does not demonstrate past performance for award, the contracting officer shall consider the past performance of each party to the joint venture. (d) (1) Small business concerns . Upon making a determination of nonresponsibility with regard to a small business concern, the contracting officer shall refer the matter to the Small Business Administration, which will decide whether to issue a Certificate of Competency (see subpart 19.6 ). (2) Limitations on subcontracting . A small business that is unable to comply with the limitations on subcontracting may be considered nonresponsible (see 52.219-3 , Notice of HUBZone Set-Aside or Sole Source Award; 52.219-4 , Notice of Price Evaluation Preference for HUBZone Small Business Concerns; 52.219-14 , Limitations on Subcontracting; 52.219-27 ,Notice of Set-Aside for, or Sole-Source Award to, Service-Disabled Veteran-Owned Small Business (SDVOSB) Concerns Eligible Under the SDVOSB Program; 52.219-29 , Notice of Set-Aside for, or Sole-Source Award to, Economically Disadvantaged Women-Owned Small Business Concerns; and 52.219-30 , Notice of Set-Aside for, or Sole Source Award to, Women-Owned Small Business Concerns Eligible Under the Women-Owned Small Business Program). A small business that has not agreed to comply with the limitations on subcontracting may be considered nonresponsive.