While there has been some confusion and a bit of a grey area surrounding when an offeror’s profile with the System for Award Management (SAM) must be active, the confusion will be put to rest effective October 26, 2018. Recently, a final rule was released clarifying that offeror registration in SAM is required prior to submission of an offer.
Currently, FAR 4.1102(a) requires contractors to be registered in SAM “prior to award of a contract or agreement,” with some narrow exceptions. While this seems pretty straightforward, there is added confusion when FAR 52.204-7 is included in the solicitation, which ultimately defines being “[r]egistered in the System for Award (SAM) Management database” as the “[g]overnment has marked the record ‘Active.’” However, effective October 26, FAR 4.1102(a) will state “[o]fferors and quoters are required to be registered in SAM at the time an offer or quotation is submitted in order to comply with the annual representations and certifications requirements.” The final rule also clarifies that this must be an “active” registration. The key is to ensure that you do not let your SAM registration lapse or forget to submit the required notarized letter.
As you are likely aware, registration in SAM is required in order to do business with the federal government. While this clarified registration requirement may not pose an issue for most, it could pose a problem for joint ventures or new entities with a tight turnaround to submit a proposal. One commentator suggested an exception for newly formed joint ventures, proposing that all that should be required is proof of submission for SAM registration (as opposed to an active SAM registration) or that each partner has an active SAM registration at the time of proposal submission. The government disagreed, noting that this is not practicable and that “joint venture agreements should be in place more than 48–72 hours in advance of proposal submission, which allows adequate time for completion of registration in SAM.” It was also noted that it is not feasible to rely on the SAM registration of the separate members because the government collects representatives and certifications regarding the joint venture itself, not the individual members.
Given the length of time that it can take to complete all of the administrative tasks to form an entity and get it ready to submit a bid on a federal procurement, such as registering the business in your chosen state, obtaining an EIN, establishing a bank account, and obtaining a DUNS number, all of which must be done before registering in SAM and finally being assigned a CAGE code, it is important to plan ahead. We are here to assist you in navigating these steps.
About the Author: Meghan Leemon is an associate with PilieroMazza in the Government Contracts Group at our Colorado office. She may be reached at mleemon@pilieromazza.com.
