Procrastination Has Consequences: How Waiting Until the Last Minute to Renew Their SAM Registration Cost a Contractor Millions

The Government Accountability Office (“GAO”) recently sustained a protest of a contract award because the winning contractor failed to maintain their System for Award Management (“SAM”) registration from the date their proposal was submitted through the date the contract was awarded.  Even though the contractor had a valid SAM registration (1) at the time they submitted their proposal and (2) at the time they were awarded the contract, a one-day gap in registration during the intervening period was sufficient to set aside the contract award.  This was true even though the contractor had a pending renewal application waiting for Government validation and approval.

In TLS Joint Venture, LLC, B-422275, the Navy awarded a contract to Silas Frazier Realty, LLC (“SFR”) for custodial services at the Naval Surface Warfare Center, Carderock Division, in the amount of $4,991,620.  TLS Joint Venture, LLC (“TLS”) protested the award on the grounds that SFR’s SAM registration lapsed between the closure of the solicitation period (September 15, 2023) and the date the Navy awarded the contract to SFR (December 26, 2023).  TLS provided data showing that SFR’s registration lapsed for approximately 24 hours between December 11, 2023, and December 12, 2023.  The GAO sustained the protest based on the plain language of FAR 52.204-7, which “unambiguously requires offerors to maintain their SAM registrations during the evaluation period.”  The GAO rejected the argument that SFR’s pending SAM renewal cured the gap in coverage, because a contractor is not considered registered with SAM until the Government validated the information in the renewal application and marked the contractor’s record as “Active.”

This decision serves as a cautionary tale to government contractors to thoroughly ensure compliance with even the most minute FAR requirements.  In addition, when a contractor requires government action in order to ensure compliance with the FAR (e.g. validation and approval of a SAM renewal), the contractor should build in additional time to allow for Government delays.  Government contracting rules are generally strictly construed, and even a mistake caused by a minor administrative task can have disastrous results.