If federal contracting had a proverbial town square, it would be SAM.gov. So much federal contracting activity flows through or starts there. A large portion of SAM is contractor information. Contractors are required to be on SAM and are expected to keep their profiles on SAM updated. A “hot off the presses” GAO ruling has confirmed that the timing of SAM registration can make or break a contractor’s winning bid.
In TLS Joint Venture, LLC, B-422275 (Comp. Gen. Apr. 1, 2024) GAO heard a protest focused on the timing of an awardee’s SAM registration renewal. At the center of the protest is FAR 52.204-7, which lays out the requirements for SAM registration when bidding on a federal procurement. FAR 52.204-7 states: “An Offeror is required to be registered in SAM when submitting an offer or quotation, and shall continue to be registered until time of award, during performance, and through final payment of any contract, basic agreement, basic ordering agreement, or blanket purchasing agreement resulting from this solicitation.” This FAR provision also warns offerors: “Processing time should be taken into consideration when registering. Offerors who are not registered in SAM should consider applying for registration immediately upon receipt of this solicitation.”
In this case, the awardee submitted its renewal information on SAM prior to the expiration of its current SAM registration, but the processing of its renewal did not complete until after the expiration date. The protester argued that the awardee’s SAM registration had lapsed for that short period of time between expiration and active status, and that the agency was required to ensure a contractor’s SAM registration is “active.” The agency argued back that since the renewal was submitted prior to expiration, the awardee’s registration did not lapse. GAO sided with the protester.
GAO first analyzed FAR 52.204-7 and found that the text of the FAR provision requires offerors to maintain SAM registration throughout the evaluation period (i.e., the time between proposal submission and the award of any contract). GAO also noted that the United States Court of Federal Claims recently held in Myriddian, LLC v. United States, 165 Fed. Cl. 650 (2023), that FAR 52.204-7 “requires offerors to maintain their SAM registrations without lapses during the solicitation period” (which we blogged about here). In this case, GAO found that this FAR provision was unambiguous, and even though an agency monitoring an offeror’s SAM registration throughout the evaluation period may be burdensome, it is not GAO’s job to weigh the pros and cons of a procurement regulation. GAO pointed to FAR 52.204-7’s definition of “Registered” in SAM as partially determinative. This definition states a four step process to be “Registered” on SAM:
“(1) The Offeror has entered all mandatory information, including the unique entity identifier and the EFT indicator, if applicable, the Commercial and Government Entity (CAGE) code, as well as data required by the Federal Funding Accountability and Transparency Act of 2006 (see subpart 4.14) into SAM;
(2) The offeror has completed the Core, Assertions, and Representations and Certifications, and Points of Contact sections of the registration in SAM;
(3) The Government has validated all mandatory data fields, to include validation of the Taxpayer Identification Number (TIN) with the Internal Revenue Service (IRS). The offeror will be required to provide consent for TIN validation to the Government as a part of the SAM registration process; and
(4) The Government has marked the record ‘Active.'”
GAO stated that this definition places requirements on both the contractor and agency to take actions to make sure a contractor is registered on SAM. The offeror “must enter all mandatory information and complete the representations and certifications,” and the agency “must validate all information and mark the offeror’s record as ‘Active.'” All this must be completed for an offeror to be considered “registered” on SAM.
GSA (who essentially manages SAM) explained to GAO that a contractor’s SAM registration expires within one year of when the contractor last submitted registration information. GSA sends reminder emails to contractors so they don’t miss this annual renewal date. After a renewal is sent in by contractors on SAM, GSA and and other agencies, such as the IRS, review the information. So there is a delay between submission of the information, and approval of “active” status on SAM.
Here, the awardee did submit their renewal prior to their expiration date of December 11. But the processing of its renewal information to achieve “active” status did not complete until December 12. So for about a day, the awardee was not “active” on SAM, during the evaluation period for the subject procurement. GAO found that this is a lapse in SAM registration, and thus violated FAR 52.204-7.
GAO, with this decision, has essentially issued a warning to all contractors; stay on top of your SAM registration, or risk losing award. GAO also placed on agencies a requirement to proactively check SAM statuses for any offerors during the evaluation period. While it may seem a simple and quick action to confirm SAM information or do quick updates to your SAM profile, the timing of when these occur can be critical. Here, there was a very short lapse between expiration and “active” status. But that short time cost the contractor an award. Contractors need to make sure to not delay SAM registrations or updates, and anticipate that any submission has to be bounced around multiple agencies prior to being approved for “active” status. Cutting SAM renewal close to a deadline could cost you an award.
Need legal assistance with a government contracting matter? Email us or give us a call at 785-200-8919.
Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook.