In 2023, PilieroMazza reported on Myriddian, LLC v. U.S.[1] where the Court of Federal Claims interpreted Federal Acquisition Regulation (FAR) Clause 52.204-7 to require that offerors maintain an active SAM (System for Award Management) registration continuously from offer submission to contract award. The Department of Defense, General Services Administration, and the National Aeronautics and Space Administration have issued an interim rule allowing contractors minor lapses in SAM registrations without risking their ability to secure contract awards.
The Interim Rule
The interim rule clarifies that offerors must be registered in SAM at the time of offer submission and at the time of contract award, but are not required to be registered at every moment in between those two points. In explaining the update, the rule addresses Myriddian and TLS Joint Venture, LLC,[2] a decision from the Government Accountability Office which similarly interpreted an offeror must be registered at the point of offer submission and maintain that registration through contract award. The rule first recognizes that other FAR clauses (e.g., FAR 32.1110(a)(1), FAR 52.204-13) require contractors to “maintain” registration, however, emphasizes that such registration requirements are during contract performance. It notes the importance of maintaining a SAM registration throughout contract performance is to ensure payments can be mechanized, a process that is not necessary prior to contract award.
SAM registration pre-award is necessary in order for a contracting officer to complete a broader responsibility and qualification review (e.g., reviewing the entity’s status for possible debarment, suspension, proposed debarment, or other Governmentwide exclusion). Such a review is not necessary outside of the point of offer submission and contract award. As such, the rule amends FAR 52.204-7(b)(1). The clause previously read: “an Offeror is required to be registered in SAM when submitting an offer or quote, 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.” The amended clause will read: “an Offeror is required to be registered in SAM when submitting an offer or quotation and at time of award (see FAR clause 52.204-13 . . . for the requirement to maintain SAM registration during performance and through final payment).”
The rule acknowledges how the previous rule resulted in the loss of resources for otherwise successful small business offerors (e.g., time and costs of litigation, lost income) and the government (e.g., loss of best-value provider, delays in mission execution via intended contract solution). The amendment hopes to reduce litigation and delays in contract awards.
If your firm is affected by these proposed changes and would like to submit public comments, please make sure to do so before the deadline on January 13, 2025.
Takeaways
- If the interim rule is enacted, offerors will no longer be disqualified from contract awards if their SAM registration lapses in between offer submission and contract award.
- What’s not changing:
- Offerors must be registered in SAM with an active registration prior to the submission of an offer.
- Offerors must be registered in SAM at the time of contract award.
- Offerors must maintain an active registration in SAM for the duration of the contract performance, including through final payment. See FAR 52.204-13(c).
- Because offerors still need to be registered at the time of an offeror submission and contract award, contractors should be aware of government processing times. FAR 52.204-7(d) warns offerors to consider the processing time associated with registering in SAM. This notice indicates that offerors should not submit proposals until their registration is complete and that a delay in receiving registration confirmation from the government will not be a valid excuse for failure to have an active registration at the time of proposal submission.
- The requirement to maintain an active SAM registration is a mandatory clause in most solicitations and awards. There are a few circumstances where the clause may not be included, such as in contracts where the work will be performed completely outside of the United States or in certain high-stake military operations. However, even in these situations, FAR 52.204-7—though not mandatory—may still be included.
If you have questions about the SAM registration rules, please contact Cy Alba or another member of PilieroMazza’s Government Contracts Group. Special thanks to Krissy Cralle for her assistance with this blog.
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[1] 165 Fed. Cl. 650 (May 23, 2023).
[2] B-422275, April 1, 2024.
