Responsibility Determination

[alexreb]

FAR 9.140-1(e) statest that a company must "Have the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain them". Under the organization part of that standard, can a company be determined nonresponsible if the CO considers their subcontracting arrangement to be too risky or unstable?

For example, a situation is created where the sub becomes more key to performance than the prime because the prime will sub out all or most of the work to a sub who will further sub out the work to several 2nd tier subs. That seems like an extremely risky situation. Successful performance hinges entirely on the 1st tier sub.

Would such a situation be reason enough for determing the prime to be nonresponsible for not having the necessary organization, even if the solicitation was silent about such subcontracting arrangements?

[napolik]

FAR 9.140-1(e) statest that a company must "Have the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain them". Under the organization part of that standard, can a company be determined nonresponsible if the CO considers their subcontracting arrangement to be too risky or unstable?

For example, a situation is created where the sub becomes more key to performance than the prime because the prime will sub out all or most of the work to a sub who will further sub out the work to several 2nd tier subs. That seems like an extremely risky situation. Successful performance hinges entirely on the 1st tier sub.

Would such a situation be reason enough for determing the prime to be nonresponsible for not having the necessary organization, even if the solicitation was silent about such subcontracting arrangements?

Yes. See FAR 9.103( c )

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A prospective contractor must affirmatively demonstrate its responsibility, including, when necessary, the responsibility of its proposed subcontractors.

Unquote

Also, review 9.104(e), including the final word:

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(e) Have the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain them (including, as appropriate, such elements as production control procedures, property control systems, quality assurance measures, and safety programs applicable to materials to be produced or services to be performed by the prospective contractor and subcontractors).

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You do not need to say in the solicitation that you will consider subcontractors as part of your review of contractor responsibility.

[Guest Vern Edwards]

I'm not sure that you should determine the contractor to be nonresponsible merely because it is subcontracting critical elements of the work. That happens all the time. But if the contractor does not have an adequate system in place to manage the subcontractors, including a satisfactory quality assurance system, then I think you have a pretty good case.

[formerfed]

Just based upon what was said, I don't see how you could declare a prime non-responsible on that basis. Subcontracting is a valid means of obtaining resources, skills, etc. Even if the prime subcontracts out the bulk of the work and uses multiple tiers of subcontractors, that's still not a necessarily a sound reason. What if the company has a history of solid performance using similar approaches?

[alexreb]

Thanks guys.