The SBA Certificate of Competency (COC) Program is regulated by the Small Business Act (15 U.S.C. 637(b)(7)). After review of the contracting agency’s referral, the SBA issues a written decision to the contracting officer either certifying or not, that one or more of the small businesses are responsible and meet the requirement to perform the contract.
Contractors challenging the SBA’s decision must be extremely careful because once you fall within the realm of the SBA making its own judgment most cases lose. The better approach is to see if the contracting officer should not have gotten to the point of referring your proposal to the SBA.
The Certificate of Competency Program applies to government contracts that include procurements involving Multiple Award Contracts and orders placed against Multiple Award Contracts, where the contracting officer has used any issues of capacity or credit (responsibility) to determine suitability for an award.
The Certificate of Competency Program is in place to allow small businesses to qualify for specific contracts. If the contracting agency makes an adverse decision then the COC Progam allows you to appeal a contracting officer’s determination that you cannot perform the contract. The issue becomes when do you get to appeal?
COC Referral to SBA
The contracting officer must refer small businesses to SBA for a possible COC, even when the next bidder in line also is a small business under the following conditions:
- If the contracting officer denies an apparent successful small business offeror award of a contract or order on the basis of responsibility.
- If the contracting officer decides not to consider the small business for award of a contract or order after evaluating the concern’s offer on a non-comparative basis (e.g., a pass/fail, go/no go, or acceptable/unacceptable) under one or more responsibility type evaluation factors (such as experience of the company or key personnel or past performance); or
- If the small business is denied the for award of a contract or order because it failed to meet a definitive responsibility criterion contained in the solicitation.
Referred Business’s Options: If your company is referred to the SBA for a Certificate of Competency determination, your company can then apply may apply to SBA for a COC. If you are a nonmanufacturing offeror on a supply contract, the Certificate of competency to the responsibility of the non-manufacturer, not to that of the manufacturer.
Legal proof required. As the alleged non-responsible bidder, you have the burden of proof to demonstrate you meet the responsibility criteria. You must be a small business under the SBA size standards.
Agency COC Referral Requirements: When the contracting officer refers a bidder to the SBA for a Certificate of Competency determination, he or she must provide the following copies in its referral:
- Offer submitted by the concern whose responsibility is at issue for the procurement (its Best and Final Offer for a negotiated procurement);
- Abstract of Bids, where applicable, or the Contracting Officer’s Price Negotiation Memorandum;
- Preaward survey, where applicable;
- Contracting officer’s written determination of nonresponsibility;
- Technical data package (including drawings, specifications, and Statement of Work); and
- Any other justification and documentation used to arrive at the nonresponsibility determination
Litigating Certificate of Competency Bid Protests
A common dispute arises when the contracting officer refers the offeror to the SBA for a COC decision. Oftentimes, the question is whether the procurement evaluation requirements were on a pass/fail basis. If so, then the analysis is a little tricky.
The first question when considering to file a bid protest is whether the agency’s nonresponsibility determination was truly a contractor responsibility issue or whether it was a proposal responsiveness matter.
In the case of Manus Medical, LLC v. United States, No. 14-26 C (Mar. 19, 2014) before the U.S. Court of Federal Claims, the plaintiff filed a bid protest which raised the question of a government contracting agency can cure a proposal defect by a bidder by referring the company to the Small Business Administration (“SBA”) for a Certificate of Competency decision. The Court said no.
More specifically, the Court of Federal Claims said that “when an agency cannot evaluate information because the offeror fails to provide it, the agency does not reach the question of responsibility, and thus is not required to refer the matter to the SBA.” Citing Pacific Sky Supply, Inc., B-215189 et al., 85-1 CPD ¶ 53, at 4 (Comp. Gen. Jan. 18, 1985).
The second question when assessing Certificate of Competency bid protests or COC appeals is whether the reason for the contracting officer’s decision was truly a responsibility issue.
SBA Certificate of Competency regulations, including FAR 9.104-1 require, among other things a review of contractor past performance, financial resources, business ethics, organization, experience, accounting and operational controls, and technical skills.
- Not all certificate of competency referrals are valid.
- A viable bid protest focuses on whether the agency’s concern actually goes to your ability to perform the contract.
SBA COC Decision
Once the COC referral gets into the hands of the SBA, it becomes even more difficult to challenge the decision.
Congress has delegated sole discretion to the SBA to decide Certificate of Competency issues. Once the SBA issues, or declines to issue, a COC, the agency will comply with the decision.
However, you can protest the SBA’s Certificate of Competency decision, if you found that the SBA failed to follow its own regulations, abused its discretion or somehow overreached its authority.
For help litigating SBA Certificate of Competency Program disputes call Watson’s bid protest lawyers at 1-866-601-5518.