Key takeaways
- Federal Acquisition Regulation (FAR) Council issues interim rule clarifying that companies competing for federal contracts must be registered in System for Award Management (SAM) only at proposal submission and contract award
- Continuous SAM registration is no longer required to be eligible for award
- Interim rule provides relief from harsh consequences of previous requirement, which made offerors ineligible after even a one-day lapse in SAM registration
Overview of interim rule
The FAR Council has issued an interim rule amending FAR 52.204-7(b)(1) to clarify SAM pre-award registration requirements. FAR 52.204-7(b)(1) formerly required offerors to continuously maintain an active SAM registration throughout the period between proposal submission and contract award to be eligible to receive the award. The U.S. Court of Federal Claims and the Government Accountability Office both strictly enforced this previous requirement, often determining that offerors were ineligible for award if they failed to maintain an active SAM registration for the entire proposal and evaluation process. The interim rule, which took effect on November 12, 2024, provides that an offeror must be registered only at the time of proposal submission and contract award "but [is] not required to be registered at every moment in between those two points."
Impact of interim rule
As discussed in the interim rule, some of the language contained in FAR 52.204-7(b)(1) "has been construed in some cases as levying a requirement for offerors to maintain a continuous, uninterrupted, registration during the entirety of the pre-award process." The interim rule, however, changes the language of FAR 52.204-7(b)(1) to clarify that "an Offeror is required to be registered in SAM when submitting an offer or quotation and at time of award." This change remedies the loss of resources and business opportunities of otherwise successful offerors, particularly small businesses, and minimizes disruptions to federal government procurements and missions.
Conclusion
To be clear, offerors must still be registered in SAM to
participate in federal government procurements. But any lapse in
registration that occurs after proposal submission and is
corrected before contract award will not render an offeror
ineligible for award. Amending FAR 52.204-7(b)(1) provides relief
to agencies and contractors alike from the harsh consequences of
the prior SAM registration requirement, which rendered offerors
ineligible for award following even a one-day lapse in SAM registration. Interested
parties may submit comments on the interim rule by January 13,
2025.
Client Alert 2024-235
This article is presented for informational purposes only and is not intended to constitute legal advice.
