Understanding the specific roles at the agency level and what the SBA must do when evaluating your proposal for a Certificate of Competency and responsibility can save you the contract.
SBA Certificate of Competency requirement issues arises in government contracting when the contracting officer makes a determination that your company, the apparent offeror, cannot perform the contract.
However, common disputes occur about whether the SBA referral is valid and whether the SBA followed its regulations when acting on the COC referral and decision.
When the contracting makes a nonresponsibility decision, he or she must refer the matter for SBA Certificate of Competency (COC) determination. When the SBA issues a positive Certificate of Competency, it requires the contracting officer to award the contract to the small business.
Government contracting offices run into problems with during bid protest litigation because of the confusing rules that regulate when the contracting officer must refer responsibility matters to the SBA. Also, small businesses also get confused as to when they can actually challenge the SBA’s certificate of competency decision in a bid protest.
Challenging SBA COC Determinations in a GAO Protest
Interested Party Requirement: When filing a bid protest based upon an SBA COC Certificate of Competency matter, you must still meet the interested party requirements for a GAO protest. Under GAO’s Bid Protest Regulations, an interested party is an actual or prospective offeror whose direct economic interest would be affected by the award of a contract or the failure to award a contract. 4 CFR 21.0(a). It is generally difficult to challenge an SBA COC determination at GAO. The burden of proof is usually hard to show and at some point, you may even have to show that the SBA did not follow its own regulations.
- Being an actual or prospective bidder can meet this requirement.
- A protestor must show that either the contracting officer did not make a valid responsibility determination.
- The SBA ‘s actions were arbitrary and capricious, and it failed to follow its own SBA COC regulations.
- If GAO rules in your favor, you must show a substantial chance of getting the award.
CO Must Refer Government Certificate of Competency Issues to the SBA
13 CFR 125.5; FAR 9.104 and FAR 19.602
Only for responsibility matters: According to the Small Business Act, government contracting agencies cannot make competency decisions without referring the company to the SBA for a government certificate of competency determinations. Failure to follow this procurement regulation can cause a GAO protest to be sustained. See recent case.
A common problem at government contracting agencies is when the CO sends the apparent offeror to the SBA for a proposal responsiveness issue. The overriding intent of the SBA certificate of competency regulations does not expect the SBA to decide proposal responsiveness matters. See 13 CFR 125.5; FAR 9.104 and FAR 19.602.
Instead, each agency has a source selection team that actually makes a determinate as to whether bidders have first met the material requirements of the solicitation. A contracting agency cannot send an offer to the SBA for a certificate of competency decision to cure a proposal defect. See Manus case.
SBA COC Requirements
What are Responsibility Procedures Under FAR 19.602?
FAR 19.602 sets out the basic government certificate of competency requirements for the contracting officer to refer responsibility matters to the SBA. The language states as follows:
(a) Upon determining and documenting that an apparent successful small business offeror lacks certain elements of responsibility (including, but not limited to, capability, competency, capacity, credit, integrity, perseverance, tenacity, and limitations on subcontracting, but for sureties see 28.101-3(f) and 28.203(c)), the contracting officer shall—
(1) Withhold contract award (see 19.602-3); and
(2) Refer the matter to the cognizant SBA Government Contracting Area Office (Area Office) serving the area in which the headquarters of the offeror is located, in accordance with agency procedures, except that referral is not necessary if the small business concern—
(i) Is determined to be unqualified and ineligible because it does not meet the standard in 9.104-1(g), provided, that the determination is approved by the chief of the contracting office; or
(ii) Is suspended or debarred under Executive Order 11246 or Subpart 9.4.
(b) If a partial set-aside is involved, the contracting officer shall refer to the SBA the entire quantity to which the concern may be entitled, if responsible.
(c) The referral shall include—
(1) A notice that a small business concern has been determined to be nonresponsible, specifying the elements of responsibility the contracting officer found lacking; and
(2) If applicable, a copy of the following:
(ii) Final offer submitted by the concern whose responsibility is at issue for the procurement.
(iii) Abstract of bids or the contracting officer’s price negotiation memorandum.
(iv) Preaward survey.
(v) Technical data package (including drawings, specifications and statement of work).
(vi) Any other justification and documentation used to arrive at the nonresponsibility determination.
(d) For any single acquisition, the contracting officer shall make only one referral at a time regarding a determination of nonresponsibility.
(e) Contract award shall be withheld by the contracting officer for a period of 15 business days (or longer if agreed to by the SBA and the contracting officer) following receipt by the appropriate SBA Area Office of a referral that includes all required documentation.
Contracting Agency and SBA Do Make Mistakes With
When it comes to government certificate of competency requirements, did you know that:
- By the contracting officer referring an incomplete proposal to the SBA for a Certificate of Competency determination does not constitute a proper exercise of discretion?
- When it comes to the issue of proposal responsiveness versus and offeror’s technical responsibility, 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? See Pacific Sky Supply, Inc., B-215189 et al., 85-1 CPD ¶ 53, at 4 (Comp. Gen. Jan. 18, 1985)
- The SBA is also bound by the FAR COC requirements and not just SBA regulations (13 CFR 125.5; FAR 9.104 and FAR 19.602)
Generally GAO will not review bid protests challenging the SBA Certificate of Competency decisions unless, the protestor shows that the Certificate of Competency denial was a result of bad faith or the SBA COC decision was due to the SBA’s failure to consider its own regulations of to consider vital information or because of how information was presented to, or withheld from, the SBA by the procuring agency. Bid Protest Regulations, 4 CFR 21.5(b)(2). See information about appealing to the Federal Circuit Court.
- Government contracting agency’s refusal to extend the time for SBA COC by itself will not sustain a bid protest. See Eagle Sec., Inc., B-242397, Apr. 29, 1991, 91-1 CPD ¶ 415 at 4.
- Not complying with a material requirement of the solicitation does not require the contracting offer to refer the matter to the SBA for a Certificate of Competency determination.
- See information about technical proposals.
Get immediate help. For help litigating SBA certificate of competency requirements, call our GAO protest lawyers and SBA COC attorneys at 1-866-601-5518 for a FREE INITIAL CONSULTATION.