FAR Change Clarifies that Offerors (Including Joint Ventures) Must Register in SAM Before Submitting Offers
November 4, 2018
The Federal Acquisition Regulation (FAR) has been amended to make clear that offerors, including joint ventures, must be registered and active in the System for Award Management (SAM) prior to submitting bids or offers responding to Federal Government solicitations. Such registration includes completing the standard annual Representations and Certifications (Reps & Certs) required by most solicitations. These changes resolve and eliminate inconsistencies between several prior FAR provisions. These clarifying changes became effective October 26, 2018. All entities, including joint ventures, intending to submit offers thus need to ensure that the actual intended offeror is registered in SAM, and that any pre-existing registration is current and active, before submitting new offers. (See Final Rule: Federal Acquisition Regulation: System for Award Management Registration, 83 Fed. Reg. 48691 (9/26/18).)
By way of background, FAR Subpart 4.11 prescribes the policies and procedures for registering in SAM, including the insertion in covered solicitations of the SAM registration and registration maintenance clauses at FAR 52.204-7 & 52.204-13. FAR Subpart 4.12, and FAR 52.204-8 (and companion clauses), prescribe the policies and procedures for submitting and maintaining the annual Reps & Certs in SAM. The intent of these provisions is to establish a single place, or “entry point,” where an offeror can register and complete the required annual Reps & Certs, and Contracting Officers can review the same during the award evaluation and selection process. This promotes consistency, timely award decisions and avoids duplication of effort. Entities, once registered, are required to review and update their registrations (and Reps and Certs), at least annually, and more frequently if any registration information changes. A registration that has not been reviewed and updated in the prior 13 months will be deemed inactive, and will no longer be valid or able to be relied upon.
FAR 52.204-8 (b) & (d) required offerors to complete the annual Reps & Certs via SAM, if FAR 52.204-7 was included in the solicitation. Offerors further were deemed, by submitting an offer, to verify that the SAM Reps & Certs are current, accurate and complete, except for any changes specifically identified by the offeror in its offer. These requirements, along with the representations required by FAR 52.212-3 pertaining to commercial item offers, generally made SAM registration at the time of offer the de facto requirement. However, FAR 4.1101 and 52.204-7(b)(3) contained language stating that SAM registration was required “prior to award.”
In order to eliminate this facial inconsistency, and address other minor items, the FAR Council (FARC) published a Proposed Rule (81 Fed. Reg. 31895 (5/20/16)) to update the SAM registration instructions. Ten respondents submitted comments on the Proposed Rule, mostly addressing perceived burdens relating to SAM registration. The Final Rule responded to these comments, stressing primarily that the proposed changes do not establish or change the actual SAM registration requirement. Rather, the Final Rule merely clarifies the timing of such registration (i.e., prior to proposal submission, vs. at the time of award).
One commenter suggested an exception for newly-formed joint ventures as a direct result of a procurement opportunity. The Final Rule rejects such suggestion, stating that such exception "is not practicable, because the contracting officer needs to review the annual representations and certifications to evaluate the offers.” The Final Rule further states that “[i]t is also not feasible to rely on the SAM registrations of separate members of the joint venture because the Government collects specific [FAR P]art 19-related joint venture information in the representations and certifications (FAR 52.219-1) part of SAM, and the contracting activity works with [the] Small Business Administration [SBA] to validate that joint ventures meet the requirements of the small business category which they have provided in SAM.” The Final Rule explicitly stated that “[j]oint venture agreements should be in place more than 48-72 hours in advance of proposal submission,” and urged “[o]fferors that are not registered in SAM should apply for registration immediately upon issuance of the solicitation so that there should be time for a joint venture or any other type of business to be registered in SAM at the time of the submission of an offer.”
In responding to another comment, the Final Rule clarified that the SAM registration requirement applies only to proposed primes. Subcontractors and consultants are not required to register in SAM.
The bottom line is that this FAR change eliminates prior inconsistencies, and definitively establishes that offerors must be registered in SAM, and that such registrations must be “active,” at the time of offer submission. Potential offerors, including newly-formed joint ventures, should be sure to timely comply with the SAM registration requirement, so as to avoid disqualification and rejection of their offers. Similarly, an offeror that is already registered in SAM, should expressly review its existing registration and annual Reps & Certs, to ensure that such are fully current, accurate and complete.
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