Earlier this year, the GSA began replacing the old DUNS numbers with a new, government-created Unique Entity Identifier. Unfortunately, the process has proven to be messy—so messy, in fact, that it has caused major delays in the government’s processing of new SAM registrations.
Because the FAR typically requires an offeror to be registered in SAM on the date it submits a proposal, these SAM processing delays may preclude some companies from competing. Understandably, this has contractors upset. Now, the Department of Defense has stepped in with a temporary solution, but it’s up to contractors to help ensure that DoD contracting officers take advantage of it.
On September 8, 2022, the DoD issued a class deviation to FAR Subpart 4.11, which contains the SAM registration requirements. The class deviation “allow[s] the offeror to not be actively registered in SAM until 30 days after award or the date of its first invoice, whichever comes first,” so long as the offeror “can prove it has initiated or attempted to start the SAM registration process.”
It’s a much-needed exception, not only for “traditional” first-time offerors but joint ventures as well. Under U.S. Small Business Administration regulations, a joint venture must be separately registered in SAM to qualify as a small business. Even if a contractor has been registered in SAM for many years, the contractor cannot use its own SAM registration to bid as a joint venture on a small business set-aside procurement or any socioeconomic subcategory, including 8(a), service-disabled veteran-owned small business, HUBZone, or woman-owned small business. For this reason, the SAM processing delays have tripped up some experienced contractors as well as new entrants to the federal marketplace.
While the DoD’s new exception is powerful, it is also limited in three important ways.
First, the exception isn’t mandatory. Instead, the DoD advises Contracting Officers to “apply this deviation thoughtfully on a case-by-case basis as the acquisition strategy and internal contracting business processes allow.” DoD Contracting Officers have wide discretion to determine whether to use the exception.
Potential offerors should not assume that an individual Contracting Officer will decide to adopt the deviation. Instead, a potential offeror affected by a SAM processing delay should proactively reach out to the Contracting Officer as early as possible in the acquisition process to encourage the Contracting Officer to use the exception. Offerors communicating with Contracting Officers may want to note that a bedrock principle of the FAR is to “promote competition in the acquisition process.” Using the deviation promotes competition by allowing for a broader competitive field.
Second, the exception applies only to DoD procurements. Contracting Officers from non-DoD agencies cannot use the new deviation. Perhaps one or more non-DoD agencies will create a similar deviation, but as of the date of this post, the DoD is the only agency with this authority.
Third, the exception is temporary. The DoD memorandum says that the exception is scheduled to expire on October 31, 2022. Fortunately, the DoD has left itself some wiggle room in case the SAM processing delays aren’t resolved by Halloween. According to the memorandum, the deviation may be “rescinded or extended.” Because these SAM processing delays have been occurring for several months already, it wouldn’t surprise me to see the deviation extended at least until the end of 2022.