Pre-Award Surveys: Demonstrating Contractor Responsibility

A pre-award survey is a government assessment of a prospective contractor's capability to perform a contract. It's part of the responsibility determination.

Purpose:

• Verify contractor can perform
• Assess capability and capacity
• Evaluate financial stability
• Confirm responsibility

When surveys occur:

• New contractors (no track record)
• Large or complex contracts
• When contracting officer has concerns
• Significant capability questions

Who conducts surveys:

• DCMA (Defense Contract Management Agency) for DoD
• Contracting agency staff
• Specialized survey teams

Survey types:

• Full capability survey
• Limited scope surveys
• Financial capability only
• Production capability focus

FAR 9.104 general standards:

A responsible contractor must:

1. Financial resources — Adequate to perform
2. Ability to comply — Meet delivery schedule
3. Satisfactory record — Performance and integrity
4. Technical capability — Necessary organization, experience, skills
5. Production capability — Equipment and facilities
6. Otherwise qualified — Eligible under law and regulations

Integrity and ethics:

• Satisfactory record of integrity
• Business ethics
• No debarment or suspension

Special standards:

Some contracts have additional responsibility criteria:

• Quality system requirements
• Security clearances
• Specific certifications
• Past performance thresholds

Technical capability:

• Experience with similar work
• Technical skills and expertise
• Key personnel qualifications
• Engineering capability
• Past performance

Production capability:

• Manufacturing facilities
• Equipment and tooling
• Production capacity
• Ability to meet schedule

Quality assurance:

• Quality system adequacy
• Inspection capabilities
• Quality history
• Certifications (ISO, AS9100, etc.)

Financial capability:

• Financial statements
• Credit reports
• Cash flow adequacy
• Bonding capacity

Accounting system:

• Adequate for contract type
• Cost accounting capability
• DCAA-approved (if required)

Before the survey:

• Organize documentation
• Brief key personnel
• Clean up facilities
• Review potential weaknesses

Documentation to have ready:

• Financial statements (audited if available)
• Banking references
• Past performance references
• Organizational charts
• Key personnel resumes
• Quality system documentation
• Equipment lists

Facility preparation:

• Tour route planning
• Equipment operational
• Safety compliance
• Professional appearance

Personnel preparation:

• Know who will be interviewed
• Brief on likely questions
• Be honest and direct
• Have backup people available

What they look at:

• Financial statements (balance sheet, income statement)
• Cash flow projections
• Current contracts and backlog
• Credit reports and references
• Banking relationships

Key ratios evaluated:

• Current ratio (liquidity)
• Debt-to-equity
• Working capital
• Profit margins

Concerns they look for:

• Inadequate working capital
• High debt levels
• Poor payment history
• Contract too large relative to resources

Mitigating factors:

• Lines of credit
• Progress payment provisions
• Strong banking relationship
• Financial backing

Small business considerations:

• Smaller financial base expected
• Growth potential recognized
• Contract terms can help

What to expect:

• Opening meeting
• Facility tour
• Document review
• Personnel interviews
• Closing meeting

Best practices:

• Be professional and hospitable
• Answer questions honestly
• Provide requested documentation promptly
• Don't oversell or exaggerate
• Acknowledge weaknesses, explain mitigations

Common questions:

• Similar work performed
• Staffing plans
• Schedule feasibility
• Quality approaches
• Risk management

Red flags to avoid:

• Unprepared or disorganized
• Evasive answers
• Overconfidence without substance
• Facility issues (safety, capacity)
• Key personnel unavailable

Possible outcomes:

• Complete/Satisfactory — Capable to perform
• Complete/Unsatisfactory — Not capable
• Complete/Capability Unknown — Insufficient information
• Conditional — Capable with conditions

If satisfactory:

• Survey supports award
• CO can proceed
• May have recommendations

If unsatisfactory:

• CO must consider finding
• May preclude award
• Can request review/reconsideration
• Address deficiencies and request new survey

Conditional findings:

• Must meet conditions before award
• May require follow-up verification
• Work to satisfy conditions

CO's role:

• Survey is advisory, not binding
• CO makes final responsibility determination
• May consider other factors

Ongoing preparation:

Don't wait for a survey — be ready always.

Maintain documentation:

• Current financial statements
• Updated capabilities briefing
• Past performance references
• Current equipment inventory
• Quality system documentation

Build track record:

• Successful contract performance
• Positive past performance ratings
• Growing capabilities
• Professional reputation

Address weaknesses:

• Identify gaps proactively
• Build missing capabilities
• Strengthen financial position
• Document improvements

First-time contractors:

• Start with smaller contracts
• Build past performance
• Document commercial experience
• Consider teaming