As we have previously discussed, businesses that contract with the U.S. government must maintain System of Award Management registration to be eligible for contract awards. We have also discussed the requirement that SAM registration be maintained, without lapse, from the time a binding offer is made through the award.

The Department of Defense, General Services Administration, and NASA are implementing an interim rule that changes this requirement. The interim rule amends 48 CFR part 52.204-7(b)(1) (also known as FAR 52.204-7) to state that: “An Offeror is required to be registered in SAM when submitting an offer or quotation and at time of award.”

Notably, this interim rule does not require continuous registration between offer or quotation submission and award—in other words, a lapse in registration will not disqualify an entity from receiving an award, so long as the lapse occurs after submission of an offer and is corrected before contract award. Discussion of the interim rule states that “[w]hile this continuous, active, registration is the anticipated normal state expected of offerors and contractors conducting business via Federal contract, the Government is now directing that the minimum preaward registration compliance is at the points of offer submission (prior to offer evaluation) and contract award (prior to contract execution).”

Courts and agencies have previously treated SAM registration lapses as rendering offerors ineligible. But this view has “resulted in loss of resources for otherwise successful small business offerors” due to lost income and the time and costs of litigation. It has also harmed the government due to delays and the loss of best-value providers. This customary view has been classified by the agencies as an “unintended interpretation.” By clarifying the SAM registration requirements, the interim rule “is expected to mitigate the risk of more litigation and mission delays,” and thus improve efficiency and loss prevention.

The interim rule takes immediate effect. The agencies will consider public comment during formulation of the final rule, however. Interested parties will have sixty days to submit comments following the interim rule’s publication, and can do so by searching “FAR Case 2023-018” on www.Regulations.Gov.

Although SAM registration lapses no longer disqualify entities from receiving awards, the best practice is to maintain continuous SAM registration. As stated above, “continuous, active, registration is the anticipated normal state expected of offerors and contractors.” A lapse is not unforgivable, but it is still preferable to avoid one. This also means a SAM registration lapse will no longer be a valid basis for an entity to protest a competitor’s award, so long as the competitor’s registration was active at the time of offer and award.

This article summarizes aspects of the law and opinions that are solely those of the authors. This article does not constitute legal advice. For legal advice for your situation, you should contact an attorney.