Is Your Organization Responsible? What New Government Contractors Need to Know About FAR 9.104-1 and Responsibility Determination
- Katherine Gentic
- Jul 23
- 5 min read
Updated: Sep 26
So you’ve found a federal opportunity. Maybe it’s your first RFP or your first time talking to a prime contractor about teaming up. You know your company can deliver. You’ve got the experience, the talent, and the technical chops. But there’s one thing you may not have thought about yet: Can you prove that your company is “responsible”?
Before any federal contract is awarded - whether you’re bidding as a prime or supporting a larger firm as a subcontractor - the government (or the prime) has to decide that you’re capable of delivering. And if your organization doesn’t measure up, you’re likely not getting the award.
What Is a Responsibility Determination?
A responsibility determination is the government’s way of ensuring that the contractor they select isn’t just offering a good price or a great technical approach; they’re also legally, ethically, and financially able to deliver.
The rule that governs this determination is FAR 9.104-1, and it applies to every contract award in the federal space. It also matters for subcontractors, especially when the prime contractor needs the government’s approval to partner with a particular company.
Put simply: if you’re trying to win government work, you need to be “responsible”, and able to prove it.
FAR 9.104-1 Standards: What You Need to Show
The government uses seven specific standards to determine if a contractor is responsible. Your organization must demonstrate that you have:
Adequate Financial Resources
You must have the cash flow, or access to credit, to do the work. Or, if you don’t yet have these in place, show your ability to obtain them. For example, a line of credit or letter of support from a bank can help if your balance sheet is thin.
Ability to Meet the Schedule
The government wants to know you have the staffing, tools, and planning in place to finish the job on time. Show them that you know what the resources are to do the job and that you have them in place, or will get them in place in short order.
A Satisfactory Performance Record
If you’ve done similar work successfully before, even for commercial clients, that’s a plus. Highlight your accomplishments and how they pertain to the work on this new opportunity. If you’re a newly established company with no performance history, have no fear. Lack of past performance does not automatically mean you won’t “pass” this test or be disqualified for award. Rather, what the government is looking for here is that there is no evidence of seriously deficient past performance.
A Satisfactory Record of Integrity and Ethics
Any history of fraud, lawsuits, or business ethics violations can - and likely will - disqualify you. If you have established ethical practices or a code of business conduct that clearly demonstrate your efforts to mitigate cases of fraud or other unethical behavior in your business, emphasize them here.
The Requisite Experience and Systems
You need to show that you have or can obtain the personnel, processes, and systems (especially accounting) to manage the contract compliantly and to successfully deliver. This may be the most difficult to demonstrate if you are pursuing reimbursable type (i.e. non-fixed price) awards, since your accounting system must be built to meet very specific criteria, including distinguishing between direct and indirect costs, allowable and unallowable costs, and utilizing job cost accounting standards.
The Necessary Equipment and Facilities
You must already have these requirements in place or have the ability to obtain them, if they are necessary to complete the contract. This rule applies especially to manufacturers, IT providers, and construction firms. Acceptable evidence normally consists of a commitment or explicit arrangement, that will be in existence at the time of contract award, to rent, purchase, or otherwise acquire the needed facilities, equipment, other resources, or personnel.
Eligibility and Qualification
In essence, your organization must be both lawfully eligible to enter into a contract and have the requisite licenses and permits, and also meet the contract regulations for eligibility. For example, in order to receive a prime contract award, your organization must be registered at www.sam.gov. For a subcontract, you must have a Unique Entity Identifier (UEI) from www.sam.gov.
Why It Matters, Even for Subs
Responsibility isn’t just for prime contractors.
If you're trying to subcontract with a large business, they will likely check to make sure your company meets these standards, too, especially if the government requires Contracting Officer consent to subcontract[1].
But even when not contractually required, most experienced primes will do their own version of a responsibility check before including you in a proposal team. This due diligence is conducted to ensure that the subcontractor presents minimal technical, financial, and operational risk to the prime since the prime's performance, reputation, and bank account are on the line.
At the end of the day, if you’re looking only for subcontract opportunities, you’ll still need to prove you’re reliable, capable, and set up for success.
When You'll Need to Demonstrate Responsibility
For organizations seeking prime contract awards, demonstration of responsibility per FAR 9.104-1 is usually required when you are submitting your proposal in response to an RFP. More specifically, it likely will be required as additional supporting documentation in your cost or business volume.
For organizations looking for subcontract opportunities, you likely will also need to demonstrate your responsibility if you are being named as a subcontractor on a prime’s proposal. Or, if the prime is looking to bring you on post-award, they will likely vet your organization at that time.
How Your Company Can Prepare
If you’re just starting out, don’t worry: responsibility isn’t about being perfect. It’s about showing you have the basics covered and that you understand what it takes to deliver and comply.
Here are some steps you can take today:
Register your organization on www.sam.gov. If you are looking for subcontract opportunities only, you are only required to have a Unique Entity Identifier (UEI), which you will also obtain through SAM (System for Award Management).
Create a short capability statement that speaks to your strengths and past experience. Make sure your work is relevant, or can be translated to, the type of work you are seeking from the government or prime contractors.
Build up your basic compliance infrastructure. These will include compliant policies, procedures and systems, such as a code of business ethics and conduct, proper timekeeping practices, an adequate accounting system, cybersecurity policies and procedures, and recruitment and hiring practices.
Talk to your bank or accountant about ways to show financial readiness and make sure you are pursuing only those opportunities for which you have the capital to fund until you start receiving payments from the government or prime contractor.
Create a responsibility checklist based on FAR 9.104-1 that you can quickly include in proposals.
Work with an experienced advisor, such as a senior-level expert at Akiri, to review current gaps in your policies, procedures, and systems and advise on how your organization can become responsibility-ready.
Don’t Let a Missed Requirement Cost You a Contract
You can write a brilliant proposal, price it right, and offer the perfect solution, but still lose if you don’t meet the government’s responsibility standards.
Whether you’re aiming for your first government contract or looking to team with a large prime, you need to be ready to show that you’re a responsible source.
Want help getting there?
Take our Prospective Client Questionnaire to see how we can provide you with hands-on support for compliance, business systems, and proposal readiness.
[1] Consent to subcontract refers to the concept in FAR 52.244-2 “Subcontracts”. It means that before the prime can issue a subcontract, they must get approval from the Contracting Officer (CO). In making their consent determination, the CO must answer the question, “Does the contractor have a sound basis for selecting and determining the responsibility of the particular subcontractor?” (see FAR 44.202-2(a)(7)). CO consent is required for all reimbursable type subcontracts, no matter the value, and all firm-fixed-price subcontracts valued at or above either 5% of the prime contract value or at or above the simplified acquisition threshold (currently $250,000).
