SAM Lapse Will No Longer Cost You a Contract

Good News for Contractors.

By Allison G. Geewax, partner, Smith Currie Oles, Washington D.C.  

Government contractors and agencies alike are breathing a sigh of relief as the Department of Defense, General Services Administration, and National Aeronautics and Space Administration issued an interim rule on November 12, 2024, to clarify what we have all long known deep down to be true: If an offeror is properly registered in the System for Award Management (SAM) at the time of offer and at the time of award, a minor lapse in between should not result in a lost award.

However, the road to this result was long and tortured. A prior version of FAR 52.204-7 stated that “[a]n Offeror is required to be registered in SAM when submitting an offer or quotation and shall continue to be registered until time of award.” The Court of Federal Claims (COFC) and Government Accountability Office (GAO) strictly interpreted this language as requiring contractors to maintain their SAM registration without any lapse between proposal submission and award. For example, GAO found that even a one-day lapse in SAM registration would render an offeror ineligible for award. TLS Joint Venture, LLC, B-422275, 2024 CPD ¶ 74 (Apr. 1, 2024). There were limits on this draconian result – for example, where the Solicitation did not include or incorporate FAR 52.204-7, Vivsoft Techs., LLC, B-421561.15, 2024 CPD ¶ 94 (Apr. 11, 2024), or where the entity at issue is a de facto joint venture, which cannot be registered in SAM, Pernix Fed., LLC, B-422122.2, 2024 CPD ¶ 73 (Mar. 22, 2024). But overall, the requirement was read very strictly, and waivers were not permitted. See Zolon PCS II, LLC v. United States, 172 Fed. Cl. 742, 754 (2024) (“Issuing a post-award deviation to ‘clarify’ that the Agency never intended to follow the plain language of a mandatory FAR requirement is not rational.”).

Apparently in response to this spiraling case law, the government has amended FAR 52.204-7 to now state that “[a]n Offeror is required to be registered in SAM when submitting an offer or quotation and at time of award[.]” Thus, the language no longer requires offerors to “continue to be registered until time of award.” This interim rule was effective immediately upon publication on November 12, 2024, with comments due within 60 days of its issuance.

Contractors should closely review solicitations for inclusion of FAR 52.204-7 and confirm that the solicitation incorporates the most recent amendments. If the solicitation contains the prior version of FAR 52.204-7, offerors must raise this issue with the agency, or, if needed, in a pre-award protest, prior to submitting proposals.