This past November, we observed a change in the rules regarding SAM registration requirements for procurements. Prior to this rule change, both GAO and the Court of Federal Claims (COFC) had found that the FAR requires offerors to maintain SAM registration throughout the evaluation period for a procurement. With the rule change, FAR 52.204-7 (the regulation at issue) now only requires that an offeror be registered at the time of offer submission and at the time of contract award. A lapse in SAM registration in between those events, in other words, would not be fatal to an offeror’s proposal. Unfortunately for one company, this resulted in a COFC case that essentially reversed its victory at a prior COFC protest. Today, we’ll look at this second case and what happened.
A brief summary of the prior protest is needed here. Back in 2023, Zolon PCS II, LLC (Zolon), brought a case to the COFC regarding the National Geospatial-Intelligence Agency’s (NGA) CLOVER contract. Under then-standing COFC precedent, an offeror had to maintain SAM registration from the date they submitted an offeror to the date they received award to be eligible for award under FAR 52.204-7. When the NGA attempted to create a deviation from this rule and award to offerors whose registrations lapsed during that period, Zolon brought its protest. On August 29, 2024, the COFC agreed with Zolon under the established precedent and found that NGA’s deviation was an attempt to amend the solicitation to make those particular awardees eligible for award. This rendered the deviation unreasonable and therefore improper. The NGA prepared its corrective action, promising to make new awards after re-evaluation.
The FAR Council (The DoD, NASA, and GSA), concerned about this ruling and the others like it, decided to change FAR 52.204-7. On November 12, 2024, they issued the rule change. Now, under FAR 52.204-7, an offeror need only be registered at the time of offer submission and at the time of contract award. The NGA picked up on this rule change and issued an amendment, Amendment 12, to the CLOVER procurement incorporating the new language, with offers due January 10, 2025. The NGA also then terminated the original awards. Zolon again protested the amendment, arguing that the NGA was just trying to change the rules to favor the original awardees, making the amendment improper. It also argued that the rule didn’t apply retroactively, and because the NGA already made awards, it couldn’t amend the rules now.
The COFC noted that, under FAR 1.108, contracting officers have the discretion to include changes to the FAR made after the solicitation was issued but before award. Specifically, the language says “[c]ontracting officers may, at their discretion, include the FAR changes in solicitations issued before the effective date, provided award of the resulting contract(s) occurs on or after the effective date.” While the NGA had made awards under the solicitation and did not terminate them until after the amendment, it had also said it was going to make new awards. In other words, the amendment applied only to the planned new awards, not the terminated awards. Those new awards were the “resulting contracts,” and as they had not occurred yet, the NGA could make the amendment. As the court put it: “Those awards will ‘happen as a consequence’ of Amendment 12, incorporating the new SAM registration rule, after the effective date of the new rule.” Furthermore, the fact the NGA didn’t specifically say it was relying on the rule change to make the amendment was irrelevant. With the rule change, the NGA had the complete discretion to make the amendment. The NGA was not deviating from FAR rules to favor an offeror, it was following what the FAR permitted.
Nonetheless, Zolon still argued that the amendment was impermissibly retroactive, and that the earlier precedent still applied. The court observed that the question came down to whether the law took away or impaired existing rights, or created a new obligation, with respect to things that already occurred. Here, no new obligations were created. As the court noted, “[i]f anything, the new rule makes it easier for offerors to maintain compliant SAM registrations.” Likewise, the rule change didn’t deprive Zolon of any rights. Zolon remained just as eligible for award now as it did before. It is true that other offerors would not be allowed to compete against Zolon. But Zolon had no right to avoid such competition, nor did it have a right in maintaining the old version of FAR 52.204-7.
Finally, Zolon argued again that the NGA was trying to favor the offerors. Again, the court observed that wasn’t an issue here. The problem in the earlier protest was that the NGA was deviating from FAR requirements. Here, it was simply following the new FAR language. As the court put it: “Again, this is not a scenario where the Agency is attempting to side step a FAR rule so that best-value offerors survive in the competition, it is attempting to follow a FAR rule that was specifically changed so that best-value offerors are not unnecessarily eliminated. That reasoning is neither arbitrary nor capricious.” With that, the COFC ruled against Zolon.
One has to sympathize with Zolon here. It went through all that trouble and won, only for the government to change the very FAR provision it won on. That being said, the ability for an agency to amend its solicitation if the FAR permits it is very broad. The key thing here is that the agency was following the FAR this time around, whereas before, it was essentially trying to violate the FAR. That made all the difference, and is a good lesson here on federal agency discretion in amending solicitations.
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