Inaccuracies on SAM May Not Be Enough to Sustain a Protest

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Stinson - Government Contracting Matters

A lie may be a lie, but false representations and certifications on SAM may not necessarily be a proper protest ground. As the recent Government Accountability Office (GAO) decision in Phoenix Environmental Design, Inc. (Phoenix), B-418473, B-418473.2 (May 20, 2020) suggests, “minor” inaccurate statements may fall short of sustaining a protest.

Through the underlying solicitation, the Department of the Interior issued a sources sought notice and sought responses from vendors that were qualified and authorized to distribute an aquatic herbicide for canal and irrigation uses.

A few months after issuing the solicitation, the agency concluded that Alligare LLC (Alligare) was the only responsible source able to perform the requirements of the solicitation. The agency executed a justification and approval (J&A) to this effect. Further, as relevant here, the agency reviewed Alligare’s Federal Acquisition Regulation (FAR)/Defense Federal Acquisition Regulation Supplement (DFARS) Report in the System for Award Management (SAM), including verifying that Alligare identified its immediate and highest-level owner, as required under FAR 52.204-7, Ownership or Control of Offeror.

Following the J&A, the agency amended its solicitation to convert it from a sources sought notice to a sole-source synopsis inviting vendors to respond. One day after this amendment, Phoenix brought the instant protest. Though the award had not yet been made at the time of the protest, while the protest was pending with GAO, the agency cited urgent and compelling circumstances and made the award to Alligare.

Phoenix protested on the ground that Alligare lacked a valid SAM registration due to Alligare’s failure to accurately identify its immediate and highest level owners pursuant to FAR 52.204-7. According to Phoenix, this meant that Alligare had not complied with the requirements of the FAR clause incorporated in the SAM registration and that the agency should cancel its sole-source award.

The agency responded by arguing that it had investigated Phoenix’s allegations and subsequently requested and received information from Alligare regarding its ownership, which ultimately confirmed that the information in Alligare’s SAM registration was accurate.

Notably, in its discussion, GAO pointed to its precedent wherein even if an offeror does provide inaccurate information in its SAM registration, which may then mean an agency’s award was improper, this will not sustain a protest in some instances: “With respect to allegations that an offeror’s SAM registration is inaccurate or incomplete, our Office has generally recognized that minor informalities related to SAM (or its predecessor systems) registration generally do not undermine the validity of the award and are waivable by the agency without prejudice to other offerors.”

GAO found that it was permissible for the agency to waive the SAM registration requirement since there was no prejudice, as Alligare had not received a competitive advantage, nor had Phoenix shown that it would have done anything differently in its proposal had it known that the agency would relax the SAM registration requirement.

While it may be important for offerors to maintain accurate SAM registrations for their own dealings with the government, this decision highlights that an alleged misstatement must be more than “minor” – even with regard to SAM representations and certifications – in order to translate into a valid protest ground. And remember, as we’ve advised before, when selecting protest grounds, don’t forget to assert how you were prejudiced by the alleged violation.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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