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    I recently received a reasonable lowest bid from a company currently undergoing Chap 11 Bankruptcy proceedings. My question is concerning the determination of contractor responsibility in this situation. I know I will have to determine if the prospective contractor is responsible based on the standards outlined in FAR 9.104-1 but who/what is the best source to turn to for this information in a situation such as this? With the company undergoing numerous recent changes as a result of the Chap 11 proceedings it seems normal methods of obtaining information on prospective contractor responsibility/non-responsibility are not possible. In order to mitigate this I have contacted other contract administration offices holding contracts with this company. I have also attempted to contact a third party, such as an U.S. Trustee or examiner, for their input of the prospective contractor's financials and operations capability. Is contacting an U.S. trustee something that has been done previously, with any success, to help the Contracting Officer make an accurate responsibility determination on a prospective contractor undergoing Chap 11 proceedings? Additionally, this is a solicitation for an order off of a GSA basic contract. Is the GSA contracting officer, who signed the basic GSA contract, the person responsible for determining contractor responsibility or is the contracting officer signing an order off the basic contract responsible for developing the contractor responsibiliy determination? Thank you for your time and assistance in this matter.


    Answer

    What the heart of your question boils down to is the GSA contracting officer, who signed the basic GSA contract, the person responsible for determining contractor responsibility or is the contracting officer signing an order off the basic contract responsible for developing the contractor responsibility determination?  To this I provide two pieces of information to support the conclusion.  One comes straight from GSA and the other comes from a protest and a GAO decision.
     
    On GSA’s website, they clearly layout the process for awarding a FSS contract.  They state:
     
     
    Prior to award, a “determination of responsibility” is made that may include the following:
    ·  Past Performance Report
    ·  Past Performance Information Retrieval System (PPIRS)
    ·  Federal Awardee Performance and Integrity Information System (FAPIIS)
    ·  Open Ratings
    ·  Excluded Parties List System (EPLS)
    ·  Financial Capability Assessment
     
    Since GSA has completed a determination of responsibility at the Schedules contract level, ordering agencies are not required to conduct it at the order level. A determination of responsibility focuses on a Schedule contractor’s financial resources, integrity, operational controls, technical skills, production control procedures, quality assurance measures, property control systems, technical equipment, facilities, and past performance (refer to FAR 9.104).
     
    http://www.gsa.gov/MASDESKTOP/section2_2.html  - GSA award process
     
     
     
    In the GAO decision on Advanced Technology Systems (ATS), Inc., B-296493.6, dated October 6, 2006, they found that an ordering agency is not required to perform a responsibility determination when placing a task or delivery order under a Federal Supply Schedule (FSS) contract, since the General Services Administration performed a responsibility determination at the time of award of the underlying contract.  In this case before the board ATS contended that the contracting officer awarding the order should have performed an additional responsibility determination.  "The protester responds that GSA’s responsibility determination, made at the time of the award of the FSS contract, is only as valid as the facts before GSA at the time, and that changes to the indicia of responsibility may exist at the time orders are actually placed.”
     
    GAO actually sought out GSA’s views on this issue while making this determination.  “GSA notes that the purpose of the FSS program, as set forth in FAR Part 38, is to provide federal agencies with a simplified process of acquiring commercial supplies and services. In furtherance of this goal, GSA states, it is responsible for awarding indefinite-delivery contracts in accordance with all applicable statutory and regulatory requirements, including compliance with the requirements relating to contractor responsibility (see FAR § 38.101(d), (e)).6 GSA concludes that, because it is tasked with making determinations of responsibility pertaining to the award of FSS contracts, ordering agencies, while not precluded from doing so, are not required to make a responsibility determination prior to placing an FSS order. Letter from GSA to GAO, July 26, 2006, at 1-3. We agree.”  The GAO went on further to discuss that “The concept of responsibility expressly applies to “prospective contractors”--not “current” or “existing” contractors--a limitation that is repeated throughout the applicable statutes and regulations, and that indicates that the requirement for a responsibility determination applies before award of a contract.”  In accordance with FAR 2.101, a task order or delivery order is clearly not in the definition of what constitutes a contract, these are orders off an existing contract.   
     
    Additionally, in GSA’s letter to GAO it also stated that, in addition to making an initial responsibility determination, it reviews the responsibility of FSS contractors at each option period. Further, GSA monitors contractor performance on key aspects of contract compliance throughout the life of the contract. GSA states that, in instances where an ordering agency has information that may indicate a reason to question the responsibility of an FSS contract, the ordering activity should bring it to the attention of the GSA contracting officer. With this said you should contact the contracting officer at GSA responsible for the contract and provide them the information on the bankruptcy.
     
    To locate the contracting officer of your schedule go to the GSA advantage link below:
     
    http://www.gsaelibrary.gsa.gov/ElibMain/ElibHome?user=newAdvantage&referer=HqNTxCCSEmsxUst0XuehYgVKB5Bz721xgxTQChvGMKvAZBeNYbUDFw==
     
    1.  Fill in contract number (hit search)
    2.  Click on contractor’s name
    3.  This will show you the contracting officer’s name, phone number and email address
     
    http://www.gao.gov/decisions/bidpro/2964936.pdf  - Link to GAO case

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