Financial_Capability_Documentation.pdf

FINANCIAL CAPABILITY DOCUMENTATION (Responsibility Determination)

1. In order to expedite the responsibility determination, it is requested that offerors provide, for itself and its major subcontractors, financial information sufficient to allow the Government to make a determination as to the company’s financial condition by XXX. Major subcontractors for purposes of the submittal of financial data are those with cost/price proposals of $XXX or more, in one contract year. The following list is to be used as a guideline; however deviation from the format specified below will not be considered grounds for disqualification from the competition so long as the information provided constitutes a reasonable substitute:

a. The most recent three years of financial statements (preferably audited) or SF 1407. (Note the submission of unaudited financial statements will delay the evaluation process. The Government reserves the right to audit all unaudited financial statements.)

b. Financial statements should include, at a minimum, the following for each company:

(1) Balance Sheet

(2) Income Statement

(3) Statement of Cash Flows

(4) Footnotes to the Financial Statements

(5) Copy of the Certified Public Accountants Opinion Regarding the Financial Statements Submitted

(6) A copy of the current annual report if available

(7) Discussion of contingent liabilities or other financial risks known to the offeror.

2. Any additional information provided in the offeror’s (including prime and/or major subcontractors) submission package will be considered. Examples of other information include: current part year financial statements, current open credit lines, and pro forma financial statements for future years. This information will be used to evaluate your firm’s financial capabilities.

3. Financial statements should pertain to the business unit(s) that will actually be performing the work.

a. If the company to be performing the work is a division of a parent company where the parent company is financially responsible for the operations of the division, audited financial statements for the parent company will suffice. In this case, the company should provide legal documentation to support the existence of such a relationship.

b. If the company to be performing the work is a division or subsidiary of a parent company where the parent company is not financially responsible for the operations of the division or subsidiary, audited financial statements of a parent company are generally not a sufficient substitute unless the company obtains, and furnishes to the contracting officer, a written supplement to the CPA firm’s existing statement regarding the parent company’s financial statements. This supplement should state clearly that the independent auditor has reviewed the division’s or subsidiary’s financial statements as submitted in response to this RFP, and has found them to be an accurate representation of that business unit’s financial condition as of the date of those statements.

c. If the company to be performing the work is a joint venture, limited liability Company, or similar type of entity, the company should submit the financial statements of all the participating firms. This includes any financial statements, pro forma or otherwise that exist for the performing entity. The company should also submit legal documentation clearly disclosing the conditions of the business arrangement and the attendant financial terms.

4. Offerors must have sufficient financial resources that demonstrate an acceptable financial capability to perform the contract. The contracting officer will make a determination of responsibility prior to award of any resultant contract in accordance with standards set forth in FAR and DFARS Part 9. Contract award will be made only to responsible prospective contractors.