How to Do Business with Treasury Part I: Basic Contracting Principles
Previous
| Next
Before looking at the regulations in detail, you
should be aware of four basic principles underlying Department of the
Treasury and federal agencies’ contracting process.
First, to ensure reasonable prices, contracts are awarded competitively
whenever possible. This practice reflects the theory that full and open
competition results in fair and reasonable prices and that such competition
avoids favoritism by assuring that all qualified suppliers have the
opportunity to sell to the government.
Second, contracts are awarded only to contractors found to be "responsive"
and "responsible." Regardless of the procurement method used, the regulations
require that, before the contract is awarded, the contracting officer
must assure that a prospective contractor is "responsive" and "responsible."
To be considered responsive, the contractor must submit a sealed bid
or proposal in accordance with the terms and conditions of the quotation
or solicitation. For example, the bid or proposal must be submitted
in a timely manner to the location stated in the Government’s requirements.
To be considered responsible, the contractor must meet the following
conditions:
- Have, or be able to obtain, adequate financial resources.
- Be able to comply with the delivery requirements.
- Have a satisfactory record of performance.
- Have a satisfactory record of integrity and business ethics.
- Have, or be able to obtain, the necessary organization, experience,
accounting and operational controls, and technical skills.
- Have, or be able to obtain, the necessary production, construction,
and technical equipment and facilities.
- Be otherwise qualified and eligible to receive an award under applicable
laws and regulations.
These determinations are generally based on the contracting officer's
evaluation of contractor's data and records of prior performance.
In the case of small business, special rules apply. If a contracting
officer finds that the small business that offered the lowest price
is not responsible, the case must be referred to the Small Business
Administration (SBA). The SBA then notifies the small business of the
contracting officer's finding and offers it an opportunity to apply
for a Certificate of Competency (COC). If the small business applies
for a COC, the SBA reviews the findings and makes its own determination
as to whether the small business is responsible. If it finds the small
business responsible, the SBA issues a COC to the contracting officer.
Except in some unusual circumstances, the contracting officer must then
abide by the SBA's decision and award the contract to the small business
firm.
Third, the type of contract issued must be appropriate for the particular
procurement. The regulations authorize the use of several different
types of contracts and describe the circumstances appropriate for the
use of each. The type of contract used in each procurement should be
determined by the circumstances of the procurement and the degree of
risk associated with performance of the contract.
Fourth, the Department of the Treasury procurement program is used
to help implement various national social and economic policies. Some
of those policies are implemented by mandatory contract provisions,
such as those requiring that minimum standards for wages, hours, and
working conditions be met in producing supplies or performing services
under a Department of the Treasury contract. Other policies are furthered
by laws requiring contracts to be awarded to certain contractors or
prohibiting their award to others. For example, certain items must be
purchased from Federal Prison Industries, Inc., and contracting with
a company convicted of violating air pollution standards is prohibited.
A third method of implementing national policies is the use of special
procurement techniques, such as set-asides for small businesses, HUBZone
set-asides, and 8(a) procurements. Although there are no direct
set-asides for small disadvantaged businesses, women-owned small businesses,
and service disabled veteran owned small businesses, goals exist for
these categories.
Previous
| Next
Updated September 3, 2002 |
|
|