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The critical role of SAM registration for federal contractors

Authored by RSM LLP

The federal government’s System for Award Management (SAM), or SAM.gov, is the official website that serves as the central repository for contractor credentials, federal procurement systems and other federal programs. Registered users can view publicly available award data. More importantly, entities with an active registration are eligible to apply for federal assistance and submit offers for federal contracts.

A recent court case reminded contractors of how important it is to stay on top of SAM registration. The U.S. Court of Federal Claims granted a preliminary injunction and ordered a stay of performance on a contract until the bid protest was resolved in the case of Myriddian, LLC v. United States (No. 23-443, May 23, 2023). Myriddian protested the award of a Health and Human Services Department contract to Cloud Harbor Economics, arguing that Cloud Harbor became ineligible because it failed to comply with the SAM registration requirement provided under Federal Acquisitions Regulation (FAR) 52.204-7. Cloud Harbor’s SAM registration lapsed for 17 days between the due date to submit its contract offer and the date it received the award.

Government contracting officers often rely on SAM data. To ensure information in the database is as accurate as possible, federal contractors are required to renew their registration annually. An entity’s active status is valid for 365 days, starting from the date of registration. Renewals are not automatic, but updates in SAM.gov during the year will reset the clock for the renewal period.

When entering into contractual agreements with the government, it is imperative to know which regulatory clauses apply and what actions are required to remain compliant. Some clauses, like FAR 52.204-7(b), are easily overlooked. The extent of this clause goes far beyond requiring contractors to be registered in SAM and have an active status at the time they submit an offer. It also requires their SAM registration to remain active at the time of the award, for the duration of contract performance, and through the final payment resulting from the solicitation. Therefore, maintaining active status on SAM.gov is vital to the procurement life cycle.

There are multiple consequences if an entity fails to maintain its registration. Once an entity is marked inactive, it can no longer place bids or receive contract awards from federal agencies. Should a contractor’s active registration lapse for any moment between the time of offer and contract award, that offeror may become ineligible. This is what happened in the Myriddian case.

If a contractor’s SAM profile expires during contract performance, the government is no longer authorized to work with that contractor. This hinders the organization’s ability to compete for new awards, contract performance, profit margin and relationship with its vendors.

Typically, contractors are notified by email when their SAM registration is approaching expiration. Renewing SAM registration is a manual process. System administrators can expect to spend a considerable amount of time confirming that the data is current, accurate and complete. Renewing can be a tedious, multistep process, involving multiple parties. Based on our extensive experience assisting customers with their SAM registrations, we believe that changes ownership, the entity’s name, physical location and administrator roles are among the factors that increase the complexity of the renewal process.

SAM.gov is always evolving, and its processes and requirements are frequently updated. We strongly recommend that federal contractors renew their SAM registration at least two months prior to the expiration date and stay current on recent and upcoming changes to the site to avoid unexpected delays.

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This article was written by Luis Avila, Shayla Ferguson and originally appeared on 2023-07-21.
2022 RSM US LLP. All rights reserved.
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