SAM Registration Delays Affecting Federal Contractors: US DoD Issues Class Deviation to Address

On September 8, 2022, the Department of Defense (“DoD”) issued a class deviation, DARS 2022-O0009, to “mitigate delays” encountered by federal contractors in their registration in the System for Award Management (“SAM”). These delays have occurred “due to changes in entity validation processes and a significant increase in entities requesting a unique entity identifier at SAM.” Importantly, this deviation, if applied by the contracting officer, will allow contractors “to not be actively registered in SAM until 30 days after award or the date of its first invoice, whichever comes first.”

Generally, under Federal Acquisition Regulation (“FAR”) Part 4.1102(a), “offerors and quoters are required to be registered in SAM at the time an offer or quotation is submitted in order to comply with the annual representations and certifications requirements.” (An exception to this requirement includes “contracts awarded without providing for full and open competition due to unusual or compelling urgency” (FAR 4.1102(a)(5)).)

This deviation allows contracting officers to characterize procurements under this exception and apply the procedures in FAR 4.1103(b), which requires the contractor “to be registered in SAM within 30 days after contract award, or at least three days prior to submission of the first invoice, whichever occurs first.” However, if the invoice event occurs before the 30 days after the contract award event, the deviation seems to grant offerors an extra three days to be SAM-registered because the deviation requires registration by “the date of its first invoice” and not “three days prior to submission of the first invoice,” as provided in FAR 4.1103(b).

Contracting officers can only apply this deviation if “an offeror can prove it has initiated or attempted to start the SAM registration process.” Moreover, contracting officers may only apply this deviation in “new solicitations when award is expected by October 31, 2022,” and, for existing solicitations, contracting officers may amend the solicitation. Contracting officers will implement this deviation by including FAR provision 52.204-7, Alternate I.

The deviation also requires the contracting officer, when using this deviation, to:

• Use a copy of the ticket (with ticket number and date) the offeror has submitted to SAM’s Federal Service Desk (FSD) as the offeror’s proof of its initiation or attempt to start the SAM registration process;
• Provide the FSD ticket number to their Service/Agency SAM lead in accordance with established SAM ticket escalation procedures so that Defense Pricing and Contracting (Contracting eBusiness) may prioritize the ticket for action with the SAM Program Office;
• Ensure the offeror has provided responses for the required FAR and DFARS provisions for the solicitation that would normally be captured in the annual representations and certifications section of a SAM registration (see FAR 4.1202 and DFARS 204.1202, or FAR 12.301(b)(2) if using commercial procedures);
• If using the Procurement Integrated Enterprise Environment (PIEE) solicitation module to receive offers, ensure an alternate method is provided for offerors to submit their proposals or quotes (e.g., an email address), as the PIEE solicitation module requires the offeror be actively registered in SAM in order to submit a proposal or quote through the module;
• Monitor the contractor’s completion of registration as soon as possible after award to ensure contract performance, administration, receipt, and invoicing processes are not impacted; and
• Delay reporting the award to the Federal Procurement Data System until the contractor is actively registered in SAM so the contract action report will not fail processing.

Although this deviation exists, the contracting officer has the discretion whether to apply it, and the deviation advises contracting officers “to apply this deviation thoughtfully on a case-by-case basis as the acquisition strategy and internal contracting business processes allow.”