The System for Award Management (SAM) is the official website for registering to do business with the U.S. government, such as competing for federal procurement contracts. Under FAR 52.204-7, “an Offeror is required to be registered in SAM when submitting an offer or quotation, and shall be registered until time of award, during performance, and through final payment of any contract …resulting from the solicitation.” In the recent GAO protest of TLS Joint Venture, LLC (TLS), the awardee of a Navy contract for custodial services learned the hard way that maintaining active registration in SAM from the time of its initial offer until the agency’s award of the contract is a strict requirement, and that non-compliance can produce harsh results.
In TLS, the Navy issued a request for proposals (RFP) for the procurement of custodial services. The RFP incorporated FAR 52.204-7, System for Award Management. The Navy received six offers, including one from TLS and the eventual awardee, Silas Frazier Realty, LLC (SFR). On November 27, 2023, the Navy checked SFR’s SAM registration and observed that the registration was “Active” through December 11, 2023. On December 19, 2023, the Navy again checked SFR’s SAM registration and noted the registration reflected active as of December 12, 2023. On December 26, 2023, the Navy awarded SFR the contract. TLS, the second lowest offeror, filed a protest with the GAO asserting that the Navy’s award to SFR was unreasonable because SFR’s SAM registration had lapsed in the interval between SFR’s proposal submission and the contract award and that SFR’s SAM registration renewal was not completed before it lapsed.
The Navy countered that FAR 52.204-7 does not require that an offeror maintain its SAM registration between the closing date for proposal submissions and the date of contract award. The Navy also asserted that SFR’s registration did not lapse because SFR had filed its renewal request before its registration expired.
GAO disagreed with the Navy and sustained the protest. First, GAO explained that FAR 52.204-7 is unambiguous in that offerors must maintain their SAM registration throughout the agency’s evaluation period. GAO observed that if the Navy’s interpretation of the FAR Clause was adopted, the phrase “shall continue to be registered until time of award” would be rendered meaningless. GAO, citing the U.S. Court of Federal Claims’ 2023 determination in Myriddian, LLC v. United States, remarked “that the plain language of FAR provision 52.204-7 requires offerors to maintain their SAM registrations without lapses during the solicitation period.” Next, GAO determined that, contrary to the Navy’s contention, SFR’s SAM registration did lapse. On this point, GAO explained that although SFR filed its renewal information prior to its registration lapsing, the government did not complete its review of that information and mark SFR’s registration as active until after SFR’s registration expired—actions required for registration in SAM under FAR 52.204-7. Diving into the details, GAO noted that SFR’s prior registration expired at 9:34 A.M. on December 11, 2023, and its renewed registration was not activated until 9:48 A.M. on December 12, 2023. Accordingly, SFR’s SAM registration lapsed during the evaluation period. Consequently, GAO recommended that the Navy terminate SFR’s contract for convenience and make a new selection decision.
The takeaway for government contractors is that when it comes to SAM registration, plan accordingly: stay up-to-speed on your registration and track when it is up for renewal. Note that the SAM registration process requires both contractor and government action, with the latter involving interaction between various agencies, including the IRS and the Defense Logistics Agency, which can lead to long processing times.
