Government Contracting - DFARS Part 209 - Contractor Qualifications - Win Federal Contracts

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Andrés Vera
Offit Kurman
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240-507-1700

DFARS Part #209
Contractor Qualifications
Wednesday, 03 March 2021

DFARS Part #209
Getting Oriented
Federal Acquisition
Regulation (FAR)
Department of Defense FAR
Supplement (DFARS)
&
DFARS Procedures Guidance
and Information (PGI)

DFARS Part #209
DFARS Part 209 – Contractor Qualifications
1. Responsible Prospective Contractors (Subpart 209.1)
2. Qualifications Requirements (Subpart 209.2)
3. Debarment, Suspension, & Ineligibility (Subpart 209.4)
4. Organizational & Consultant Conflicts of Interest (Subpart 209.5)

DFARS Part #209
Responsible Prospective Contractors (Subpart 209.1)
• Responsibility – To be eligible for award, a contractor must meet certain minimum
requirements to be considered capable of performing the contract.
• FAR Subpart 9.1 Overview
o The Government may not award a contract without an affirmative determination of
responsibility.
o Responsibility is based on: Financial Resources; Ability to Meet Schedule; Past
Performance; Integrity and Ethics; Organization, Experience, Operational Controls, &
Technical Skills; Necessary Equipment, and Facilities.
o It is the Prime’s obligation to determine Subcontractor Responsibility.

DFARs Part #209
Responsible Prospective Contractors (Subpart 209.1)
• DFARS 209.104-1. General Standards.
o Additional Accounting Requirements for Cost-Reimbursement, Incentive-Based, & Contracts with
Progress Payments.
o Ban on Contract Awards to Contractors Owned or Controlled by the State Sponsors of Terrorism
(currently: Cuba, North Korea, Iran, & Syria).
• DFARS 209.105. Procedures [for Responsibility Determinations].
o Contractor Performance Assessment Reporting System (CPARS) & the Federal Awardee Performance
and Integrity Information System (FAPIIS) Module past performance information should be utilized.
o Determinations of Non-Responsibility must be reported to Agency Suspension & Debarment Official.
• DFARS 209.106. Preaward Surveys.

DFARS Part #209
Qualification Requirements (Subpart 209.2)
o Under certain circumstances, the Agency will require prospective contractors to be
pre-qualified, or have their products or manufacturers pre-approved, to determine
whether they are Responsible.
o This restricts competition which generally requires strict procedural requirements and
a documented justification by the Agency.
o Generally results in the creation of Qualified Bidders Lists (QBL); Qualified
Manufacturers Lists (QML); Qualified Products Lists (QPL).

DFARS Part #209
Qualification Requirements (Subpart 209.2)
• DFARS 209.202. Policy.
o Except for Aviation and Ship Critical Safety Items, using QPL and QML Qualification Requirements in a
solicitation requires approval through the Defense Standardization Program (DoD Instruction & Manual
4120.24).
o The use of other Qualification Requirements requires approval by the Chief of the Contracting Office.
• DFARS 209.270. Aviation and ship critical safety items.
o Parts, Assembly, and Equipment for Aircraft or Naval Ships which are “Critical” are subject to specialized
and mandatory qualification requirements.
o Head of Systems Command of the DoD Department Responsible for determining Airworthiness or
Seaworthiness must approve prospective contractor and/or products prior to award.

DFARS Part #209
Debarment, Suspension, & Ineligibility (Subpart 209.4)
• Debarment & Suspension Basics
o An “Exclusion” listing resulting from Debarment or Suspension is effectively a ban on
contracting with the federal government. The listing occurs when a Contractor is
proposed for debarment (Proposal for Debarment = Suspension).
o Once listed, a Contractor cannot receive an award or contract extension absent the
Agency Head documenting a Compelling Reason. However, the Contractor may
continue to perform contracts in effect at the time of the listing.
o Debarment and Suspension are very serious. However, such actions are expressly not
for the purposes of punishment, but rather protecting public interest.

DFARS Part #209
o Agencies must follow Subpart 9.4 regarding the causes justifying suspension or debarment and the
procedures to be followed as a part of the process.
o Causes for Debarment:
 Fraud or Criminal Offense in connection with: Federal Contract or Subcontract; Antitrust;
Embezzlement, theft, forgery, bribery, falsification/destruction of records, false statements, tax
evasion, violating Federal criminal laws, receipt of stolen property; “Made in America” violations;
commission of any other offense indicating lack of business honesty or integrity.
 Willful failure to perform and history of such failure; Drug Free Workplace violation; Defense
Production Act Unfair Trade Practices violation; Delinquency in Federal Taxes of $10,000 or more.
 Failure to disclose evidence of fraud, conflict of interest, bribery, False Claims Act, or overpayment
under Federal contract (obligation is for 3 years following final payment).

DFARS Part #209
• FAR Subpart 9.4 Overview (cont.)
o Debarment Procedures are Agency-Specific; DoD has its own approach under DFARS Appendix H.
o General Procedures for Debarment:
 Following judgment and/or Agency investigation, Notice of Proposed Debarment is issued.
 Contractor may submit information to rebut allegations and argue against debarment.
 If genuine issues of fact are raised, contractor provided with right to face accuser (review of
documents, witness testimony, etc.). Not available if proposed debarment based on judgment.
 Agency Debarring Official makes final determination based on Preponderance of Evidence.
o Period of Debarment:
 Depends on severity of charges, but generally 1-5 years.
 Prior period of suspension is considered. Mitigating factors may shorten the period.
 May be extended/reduced based on government interest, new evidence, ownership changes, etc.

DFARS Part #209
• DFARS 209.403. Definitions. – Identifies each DoD Agency’s Suspending & Debarring Official (SDO).
• DFARS 209.405. Effect of Listing. – Compelling Reasons for Agency to contract with Debarred Contractor:
o The Debarred Contractor is the only contractor who can provide the supplies/services; Urgency; Agency
has agreement with Debarred Contractor covering events giving rise to Debarment; National Security.
• DFARS 209.405-2. Restrictions on Subcontracting. – Ban on Subcontractor ownership by State Sponsors of
Terrorism.
• DFARS 209.406-2. Causes for Debarment.
o Additional Cause for compensating former DoD official in exchange for proposal or source selection info.
o Agency must report decision against debarment for “Made in America” violations.

DFARS Part #209
• DFARS 209.407-3 & DFARS Appx. H – Procedures
o Begins with Judgment (if applicable) followed by Agency Investigation and Referral to
SDO.
 DFARS PGI 209.407-3(ii)-(iv) requires certain information be included in the
Referral Memorandum.
 Notice of Proposed Debarment & Memorandum sent to Contractor.
o H-103 – Presentation of Matters in Opposition (PMIO)
 Can be written or via informal “meeting.”
 Must be submitted by Contractor (required within 30 days of receipt of Notice).

DFARS Part #209
• DFARS 209.407-3 & DFARS Appx. H – Procedures (cont.)
o H-104 – Fact Finding
 Only occurs if (1) proposed debarment is not based on criminal conviction or civil judgment; and (2)
PMIO raises genuine dispute of material facts.
 “Normally” held within 45 business days of PMIO. However, Agency can freely supplement the
Debarment record which extends the proceedings and SDO can extend any timing requirements.
 Opportunity for Witness Testimony and Cross-Examination. However, Federal Rules of Evidence &
Procedure are expressly inapplicable (e.g., Hearsay is allowable).
o H-106 – Subsequent to Fact Finding.
 Debarment decision based on preponderance of evidence issued and sent to Contractor.
 Appeals can be pursued under the Administrative Procedures Act in federal district court.

DFARS Part #209
Organizational and Consultant Conflicts of Interest (Subpart 209.5)
• Organizational Conflicts of Interest (OCI) Basics:
o Occurs when performance under a contract creates unfair competitive advantage or
impairs the contractor’s objectivity in performing under another contract.
o Three Types:
 Unequal Access to Information – Access to proprietary information, source-
selection information, etc. creates unfair competitive advantage
 Biased Ground Rules – Performance under one contract sets the ground rules for
the solicitation of another contract which the contractor (or its affiliates) pursue.
 Impaired Objectivity – Services under one contract may benefit the contractor (or
its affiliates) under another contract leading to a loss of objectivity.

DFARS Part #209
• Organizational Conflicts of Interest (OCI) Basics (cont.):
o Examples:
 Contractor providing Engineering & Technical Direction has OCI on contract to supply components.
 Contractor advising on acquisition strategy drafts project specifications. Contractor’s affiliate has an
OCI on the resulting solicitation.
 Contractor employs former agency contract official who had access to non-public source selection
information. Contractor has OCI to the extent that official participates in proposal process.
o OCIs don’t necessarily preclude award or require contract termination. They often can be “Mitigated:”
 Firewall conflicted employees from proposal preparation or conflicted aspects of performance.
 Share non-public information with competitors, nullifying competitive advantage.
 Removal of conflicted affiliates (e.g., subcontractors, teaming partners, etc.).
 Recusal from any performance which may create an OCI in the future.

DFARS Part #209
• DFARS 209.505-4. Obtaining Access to Proprietary Information. – Contractors accessing
third party technical data or computer software may be required to enter into NDAs with
those third parties. CO is not required to confirm compliance with such requirement.
• DFARS 209.570. Limitations on Contractors acting as Lead System Integrators (LSI).
o LSIs execute large “system-of-systems” acquisitions typically including requirements
generation, source selection strategy, supplier validation, etc. OCIs are inherent in
many of these activities.
o LSIs cannot have, nor acquire, a direct financial interest in the development or
construction of any systems or elements of systems designed under the LSI contract.
 Exceptions: (i) Sec. Def. confirms mitigation of the OCI; (ii) LSI is selected by lower-
tier subcontractor through process over which LSI exercised no control.

DFARS Part #209
• DFARS 209.571. OCIs in Major Defense Acquisition Programs (MDAP).
o MDAP – The acquisition of an “automated information system” with estimated expenditures of more
than $525 Million* for R&D; or $3.065 Billion* for procurements. *Amounts adjusted each FY.
o DFARS 209.571-3 – COs generally should resolve OCIs in a manner that will promote competition,
preserve DoD access to experienced contractors, and employ OCI resolution strategies without
unnecessarily restricting the pool of potential offerors.
o DFARS 209.571-7 – Performance of a SETA contract under an MDAP will generally prohibit the
contractor and its affiliates from participating as a contractor or major sub in the development of a
weapon system under the MDAP.
 DFARS PGI 209.571-7: SETA contracts should be separated from design and development work (i.e.,
COs should not include both types of work in the same task order or contract vehicle).

THANK YOU To Our Speaker
Andrés Vera
Offit Kurman
avera@offitkurman.com
240-507-1700

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DFARS - 2021
Defense Federal Acquisition Regulation Supplement
Complimentary Webinar Series

Government Contracting - DFARS Part 209 - Contractor Qualifications - Win Federal Contracts

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