This program, sometimes referred to as the "second bite of the apple," comes into play when a government buyer determines that a small business is "not responsible" for a specific contract award. In other words, the buyer has determined that the business does not show certain elements of responsibility, such as capability, competency, capacity, credit, integrity, perseverance, or tenacity, for the purposes of receiving and performing that specific government contract. In such a case, the Contracting Officer is required to withhold the contract and refer action to the Small Business Administration for a possible Certificate of Competency (COC).
Once the matter is referred to the SBA, the SBA must, within 15 days, inform the company of the Contracting Officer's decision and offer it an opportunity to apply to the SBA for a COC. After receiving an acceptable application, the SBA conducts an independent pre-award survey to determine the company's ability to perform on the specific contract. If the SBA determines that the company is able to perform, the COC program authorizes the SBA to issue a Certificate of Competency. The COC certifies to government Contracting Officers as to all elements of responsibility of the small business concern to receive and perform on the specific government contract.
If the small business decides that it has bid too low or a better job comes along, it may want to ignore the COC involvement. If the COC is refused, the government buyer can then make the award to the next low responsive and responsible bidder.