How To Fix the Risk of a Lapsed SAM Registration

The System for Award Management (SAM) is the exclusive, government-wide, registration system for all companies seeking to do business with the Federal Government. But recent Court of Federal Claims decisions have strictly interpreted the relevant FAR provision regarding continuous registration in SAM, which has resulted in several companies being disqualified from pursuing federal contract opportunities because of a lapse of their SAM registration. Fortunately, at least one agency has taken action to deviate from the FAR to prevent this adverse result.

All offerors must be registered in SAM before being awarded a federal contract. SAM is also available to grantees and others, including foreign companies. Unlike the now superseded Dun & Bradstreet’s DUNS number, SAM will generate a government-initiated Unique Entity Identifier (UEI) for a company. The SAM system has certainly had its growing pains, and even now companies still encounter minor but annoying access and registration glitches.[1] Companies are well advised to begin a new registration, and complete their annual updates, well in advance of deadlines to avoid potential system issues or preclusion from bidding or being awarded work.

To be “registered” in SAM, a company must:

1. Have entered all mandatory information, including the UEI, Taxpayer Identification Number (TIN) and electronic funds banking details;
2. Completed all of the “reps and certs” and other assertions and points of contact; [Note: under SAM, the administrative point of contact must be a real person; no longer can a proxy email address be used. As a result, it is essential that the company be thoughtful in assigning the administrative function for their SAM registration, monitor its registration regularly, and be aware of any potential changes to the identification of its SAM administrator so as to avoid risking losing even temporary access to the company’s SAM account and registration information.]
3. The Government will validate the TIN and all mandatory fields; and
4. The Government will mark the validated registration as “active.”
5. A company’s SAM registration must be kept current and accurate, and its “reps and certs” updated at least annually.

See FAR 52.204-7(b).

That FAR provision also requires, since 2018, that a vendor be registered at the time of submission of an offer “and shall continue to be registered until time of award, during performance, and through final payment of any contract…”. Each of these time segments has been the basis of successful protests alleging that an offer/apparent successful offeror was not timely and continuously registered in SAM.

On May 23, 2023, the U.S. Court of Federal Claims (COFC) held[2] that an agency (here the Department of Health and Human Services) does not have the authority to waive the continuous SAM registration requirements for an offeror because “the plain language of FAR 52.204-7(b) is unambiguous.[3] A similar opinion was issued by the COFC in Hanford Tank Waste Operations & Closure, LLC, (“H2C”)[4] because of a temporary SAM lapse after initial proposal submission but before award.[5]

In light of the COFC’s Myriddian, H2C, and similar decisions, coupled with a pending appeal to the Court of Appeals for the Federal Circuit, and  an urgency to a $45 billion, 10-year, pending IDIQ award by the Department of Energy for nuclear waste cleanup at the Hanford nuclear site, on August 31, 2023, the Department of Energy issued a Class Deviation from FAR 52.204-7 for Department of Energy procurements to remove the “continuous registration” requirement;[6] the Deviation provided contracting officers with the authority to make a reasonable determination in documenting the validity of SAM registrations at the time of offer or quotation submission and at the time of award.”[7] In addition, the deviation provides discretionary authority to a DoE contracting officer to treat the failure to register in SAM, or a lapse in a SAM registration, as a “correctable matter of responsibility.”

This deviation purports to alleviate any need to ensure compliance with the FAR text requiring “continue to be registered until award.” It will be interesting to see whether this DoE Class Deviation will have retroactive application and even the desired effect.

To date, no other federal agency has publicly issued a similar FAR deviation.

There is little public regulatory history behind the FAR “continuous registration” requirement, but the number of bid protests sustained at both the Government Accountability Office (GAO) and the COFC demonstrates how the provision has been consistently and strictly interpreted. Contractors should be on alert to ensure that their SAM registration is valid from start to finish – and it the contractor that is in substantial control to comply with that requirement. Agencies should also have flexibility to deal with circumstances arising from its errors or system issues. The Department of Energy’s Class Deviation is an appropriate interim response that should be adopted by other federal agencies until the FAR can be modified to address this matter governmentwide, and it should be clearly applied retroactively for a reasonable period of time.

At Centre Law, we help our clients register and stay current with the SAM requirements. If you have any questions, please contact the author or the Centre Law Group attorney with whom you normally work.

[1] See, for example, DoD Class Deviation 2022-O0009 – System for Award Management (Sept 8, 2022), available at https://www.acq.osd.mil/dpap/policy/policyvault/USA001754-22-DPC.pdf (to mitigate delays in SAM registration currently being experienced by entities due to changes in entity validation processes).

[2] Myriddian, LLC, No 23-443, U.S. COFC May 23, 2023, available at https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2023cv0443-34-0, and others.

[3] Ibid at 6.

[4] “H2C” is a joint venture of BWX Technologies, Amentum Services, and Fluor Corporation.

[5] Hanford Tank Waste Operations & Closure, LLC, (H2C), U.S. COFC (Jun 30, 2023), available at https://www.washingtontechnology.com/media/hanford_june_30_ruling.pdf.

[6] Department of Energy Class Deviation from FAR 52.204-7 System for Award Management (Aug 31, 2023), available at https://www.energy.gov/management/pf-2023-41-class-deviation-federal-acquisition-regulation-provision-52204-7-system-award.

[7] Id.