SAM Certification Problem Proves Costly For Small Business Offeror

A company’s failure to certify itself as a small business on its SAM profile resulted in the elimination of the company from a set-aside competition.

In a recent bid protest decision, the GAO held that a procuring agency properly excluded the low bidder from award of a small business set-aside contract because the low bidder’s SAM profile stated that it was not a small business under the solicitation’s NAICS code.

The GAO’s decision in Nationwide Value Computer, Inc., B-411190 (June 11, 2015) involved a NAVSEA solicitation for information technology support.  The solicitation was issued as a total small business set-aside under NAICS code 334118.  Offers were to be submitted using the FedBid reverse auction system.

The solicitation incorporated by reference FAR 52.213-3 (Offeror Representations and Certifications–Commercial Items).  This clause requires firms to electronically complete their representations and certifications provisions in SAM, or provide the “reps and certs” required by the clause with the submissions of their offers.  Specifically, FAR 52.212-3(c) requires an offeror to certify that it is eligible for award under a small business set-aside solicitation.

Nationwide Value Computer, Inc. submitted the lowest bid.  In the cover sheet of its FedBid submission, Nationwide identified itself as a small business, and stated that it had completed its reps and certs in SAM.  Upon review of Nationwide’s SAM profile, the Contracting Officer found that Nationwide had not certified as a small business under NAICS code 334118.  In fact, Nationwide had not self-certified as small under any NAICS code.  NAVSEA excluded Nationwide’s bid and made award to the next-lowest-priced bidder.

Nationwide filed a GAO bid protest challenging its exclusion.  Nationwide argued, in part, that its bid should have been accepted because it identified itself as a small business on its FedBid cover sheet and was listed by Dun & Bradstreet as a small business.  (Unfortunately, the GAO’s published decision does not provide Nationwide’s explanation as to why it did not self-certify as small in SAM).

The GAO wrote that although Nationwide had identified itself as a small business on its FedBid cover sheet and was listed as a small business by D&B, “these facts are not relevant where the solicitation specifically reuqired firms to complete the applicable small business representations required by FAR clause 52.213-3 in SAM or submit the required representations and certifications with the bid.”  The GAO continued, “[s]ince the record reflects that at the time the agency checked SAM, Nationwide had affirmatively represented that it was not a small business, we have no basis to conclude that the agency acted unreasonably when it eliminated Nationwide from the competition on the basis that it was not a small business concern.”  The GAO denied Nationwide’s protest.

Assuming that Nationwide was not fraudulently attempting to procure a small business contract, it seems that Nationwide simply slipped up when it completed its SAM profile.  If so, it wouldn’t be the first time that a contractor’s SAM profile was sloppily completed.  The Nationwide Value Computer case is a good reminder that a government contractor’s SAM profile is more than mere busy work to be completed as quickly as possible.  The government relies on SAM for many things–including, often, the offeror’s reps and certs.  As the case demonstrates, a flawed SAM profile can prove very costly.

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