Certificates of Competency: A Little-Known Friend of the Small-Business Contractor

You can’t believe it. You did everything right. The solicitation required that offerors have three distinct licenses. You have two, but one should cover for the license you don’t have. However, the agency says you have to have all three as distinct licenses, and denies your offer. Fortunately, you have a potential savior: The Certificate of Competency (“COC”)

What is a Certificate of Competency?

13 C.F.R. § 125.5, helpfully titled “What is the Certificate of Competency Program”, establishes what a COC is and the procedures for when and how it may be obtained. The regulation notes:  “A COC is a written instrument issued by SBA to a Government contracting officer, certifying that one or more named small business concerns possess the responsibility to perform a specific Government procurement (or sale) contract(.)” Great, but what does this mean in practice?

The regulation goes on to explain that basis of responsibility is basically a decision on a non-comparative basis, such as a requirement that if you meet you pass, and if you don’t you fail. For example, let’s say the solicitation requires you have three distinct licenses of some kind. You have two licenses, however, one of these licenses is well-recognized as sufficing for the one you don’t have, so, you submit your proposal assuming the two licenses will suffice. The solicitating agency denies your offer because you only have the two licenses. The agency didn’t have to compare your offer to others to make this determination, it just said: “Here was the requirement. You did not meet the requirement. You are denied.” This is a finding of non-responsibility and is precisely the sort of matter the COC is meant for.

Receiving a COC can be very powerful. If the SBA grants you a COC, it is an order to the soliciting agency that says, in effect, this offeror meets the requirement that you said it does not. Going from the above example, it would, in effect, mean that you met the three-license requirement, even though you only had the two (this is assuming the company does in fact meet the requirement). In fact, it goes even further. “Where SBA issues a COC on behalf of a small business with respect to a particular contract, contracting officers are required to award the contract without requiring the firm to meet any other requirement with respect to responsibility.” 13 C.F.R. § 125.5(m). In other words, even if the agency could otherwise deny a company on some other pass/fail matter, its hands are tied. It will solely be a question of whether your company is the best offer relative to the other eligible offers.

How do I get a Certificate of Competency?

The regulation actually mandates that contracting officers to refer a small business offeror to the SBA for a COC when the officer denies said offeror by finding it “non-responsible”. Under the rule, you shouldn’t have to do anything at all if the officer has made a finding of non-responsibility; the officer should make the referral on their own to the SBA. That said, this doesn’t always occur. Sometimes, the agency also may also reject an offer for different reasons and, in such a case, the agency doesn’t have to refer the offer to the SBA for a COC. Aeroplate Corp. v. United States, 67 Fed. Cl. 4, 7 (2005). Sometimes, the agency tries to argue that its decision wasn’t one of responsibility; determining this issue may require a bid protest arguing that the agency should have made a referral for a COC.

Referrals to the SBA for a potential COC must follow  § 125.5(c) and provide copies of the applicable solicitation, the offer, any applicable bid abstracts or negotiation memorandums, preaward surveys, the contracting officer’s written decision finding the offer ineligible, as well as any other necessary technical information or documentation that is relevant to the matter.

The regulation also later notes the SBA may ask for further information and documentation. Any such request must also be met if you want to have a chance at a COC.

Are there any caveats?

Of course!

The COC is powerful, but, as we noted earlier, it will not assure you of an award. Most importantly. If the agency rejects your bid on comparative factors, such as price or past performance as compared to other offerors, the COC will not change that result. Also, not every kind of contract allows for referrals for COCs or recognition of them: COCs are inapplicable for 8(a) sole source awards.

The SBA may also reconsider and rescind a COC it already issued if you submit false information, omit materially adverse information, or new materially adverse information is discovered. Furthermore, if you’ve been convicted or had a civil judgment against you for a reason that would be grounds for debarment or suspension, there is a rebuttable presumption against awarding you a COC (Although the SBA can still award it!). Finally, it should go without saying that just because your offer has been referred to the SBA for a COC does not mean you will get the COC. Whether you are given a COC will depend entirely on the circumstances of your situation.


The COC isn’t some sort of automatic way to win an award, but it is extremely powerful nonetheless. Receiving a COC means you have been conclusively determined to have the responsibility to undertake the contract. If you receive a COC for your bid, it means that the agency cannot deny your bid on any pass/fail consideration, such as a license requirement. Small business contractors should always keep this powerful tool in mind when bidding, and should not be afraid to file a protest if the agency refuses to refer the matter for a COC from the SBA.

Has your offer been denied for some pass/fail requirement? Email us or give us a call at 785-200-8919

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