Federal Acquisition Regulation: Clarification of System for Award Management Preaward Registration Requirements

<RULE> DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION <CFR>48 CFR Part 52</CFR> <DEPDOC>[FAC 2025-01, FAR Case 2023-018; Item II; Docket No. FAR-2023-0018; Sequence No. 1]</DEPDOC> <RIN>RIN 9000-AO66</RIN> <SUBJECT>Federal Acquisition Regulation: Clarification of System for Award Management Preaward Registration Requirements</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). <HD SOURCE="HED">ACTION:</HD> Interim rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> DoD, GSA, and NASA are issuing an interim rule amending the Federal Acquisition Regulation (FAR) to clarify System for Award Management preaward registration requirements. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> <E T="03">Effective date:</E> November 12, 2024. <E T="03">Comment date:</E> Interested parties should submit written comments to the Regulatory Secretariat Division at the address shown below on or before January 13, 2025, to be considered in the formation of the final rule. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> Submit comments in response to FAC 2025-01, FAR Case 2023-018 to the Federal eRulemaking portal at <E T="03">https://www.regulations.gov</E> by searching for “FAR Case 2023-018”. Select the link “Comment Now” that corresponds with “FAR Case 2023-018”. Follow the instructions provided on the “Comment Now” screen. Please include your name, company name (if any), and “FAR Case 2023-018” on your attached document. If your comment cannot be submitted using <E T="03">https://www.regulations.gov,</E> call or email the points of contact in the <E T="02">FOR FURTHER INFORMATION CONTACT</E> section of this document for alternate instructions. <E T="03">Instructions:</E> Please submit comments only and cite “FAR Case 2023-018” in all correspondence related to this case. Comments received generally will be posted without change to <E T="03">https://www.regulations.gov,</E> including any personal and/or business confidential information provided. Public comments may be submitted as an individual, as an organization, or anonymously (see frequently asked questions at <E T="03">https://www.regulations.gov/faq</E> ). To confirm receipt of your comment(s), please check <E T="03">https://www.regulations.gov,</E> approximately two to three days after submission to verify posting. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> For clarification of content, contact Mr. Benjamin Collins, Procurement Analyst, at 850-826-0058 or by email at <E T="03">benjamin.collins@gsa.gov.</E> For information pertaining to status or publication schedules, or alternative instructions for submitting comments if <E T="03">https://www.regulations.gov</E> cannot be used, contact the Regulatory Secretariat Division at 202-501-4755 or <E T="03">GSARegSec@gsa.gov.</E> Please cite FAC 2025-01, FAR Case 2023-018. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> This interim rule revises the solicitation provision at FAR 52.204-7, System for Award Management, to clarify the System for Award Management (SAM) preaward registration requirements in paragraph (b)(1) of the provision. DoD, GSA, and NASA published a final rule in the <E T="04">Federal Register</E> at 83 FR 48691 on September 26, 2018, to update instructions for registration in SAM and correct an inconsistency involving timing of registration. One of the updates to the provision at FAR 52.204-7, System for Award Management, included language that has been construed in some cases as levying a requirement for offerors to maintain a continuous, uninterrupted, registration during the entirety of the preaward process. This interim rule clarifies that the offeror must be registered at time of offer submission and at time of contract award, but would not be required to be registered at every moment in between those two points. <HD SOURCE="HD1">II. Discussion and Analysis</HD> Prior to the issuance of the September 26, 2018 rule, the FAR required registration in SAM at contract award in some instances ( <E T="03">e.g.,</E> FAR 4.1102 and 52.204-7) and at the point of offer submission in others ( <E T="03">e.g.,</E> FAR 52.204-8). The rule aimed to correct these inconsistencies. FAR 52.204-7(b)(1) was changed from “By submission of an offer, the offeror acknowledges the requirement that a prospective awardee shall be registered in the SAM database prior to award, during performance . . .” to “An Offeror is required to be registered in SAM when submitting an offer or quotation, and shall continue to be registered until time of award, during performance . . . .” The predominant FAR text changes centered on ensuring offerors understood registration was required at the point of offer submission versus contract award—as that was the earliest point for assessing compliance. This particular change has proven to be pivotal in recent bid protest decisions by the Government Accountability Office (GAO) ( <E T="03">e.g.,</E> TLS Joint Venture, LLC, B-422275, April 1, 2024) and the United States Court of Federal Claims (COFC) ( <E T="03">e.g., Myriddian, LLC</E> v. <E T="03">The United States</E> , 165 Fed. Cl. 650 (May 23, 2023)). While the nature of the procurements and associated remedies varied, the decisions were uniform in highlighting FAR 52.204-7(b)(1) as requiring an offeror to be registered at the point of offer submission and maintain that registration through contract award. While 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). Other FAR references ( <E T="03">e.g.,</E> FAR 32.1110(a)(1), FAR 52.204-13) allude to a contractor being required to “maintain” registration; however, this is “during contract performance, and through final payment”, which is after contract award. This requirement reflects the need to maintain SAM registration to support contract execution, namely to ensure payments can be mechanized. No other FAR text carries the “continuous” preaward registration language. This rule also updates the provision at FAR 52.204-7, System for Award Management, to remove references to registration requirements applicable after contract award ( <E T="03">i.e.,</E> “during contract performance, and through final payment”). A pointer to FAR clause 52.204-13, System for Award Management Maintenance, has been added in the provision, however, to ensure offerors do not mistakenly perceive the removal of the language as a removal of the requirement if awarded a contract. <HD SOURCE="HD1">III. Applicability to Contracts at or Below the Simplified Acquisition Threshold (SAT) and for Commercial Products (Including Commercially Available Off-the-Shelf (COTS) Items) or for Commercial Services</HD> This rule amends the provision at FAR 52.204-7, System for Award Management. However, this rule does not impose any new requirements on contracts at or below the SAT, for commercial products (including COTS items), or for commercial services. The provision continues to apply to acquisitions at or below the SAT, acquisitions for commercial products (including COTS items), and commercial services. <HD SOURCE="HD1">IV. Expected Impact of the Rule</HD> Offerors are required to be registered in SAM to participate in the Federal marketplace, with some exceptions listed in FAR 4.1102. Registration in SAM will be required upon submission of an offer or quote and at the time of the award as a result of this rule, which amends FAR 52.204-7(b)(1). Offerors will continue to be required to register in SAM to participate in the Federal marketplace. There is no increase in burden. This rule makes clear that a lapse in registration that occurs after offer submission and is corrected before contract award will not render an offeror ineligible for award under FAR 52.204-7(b)(1). The view that such a lapse makes an offeror ineligible has resulted in loss of resources for otherwise successful small business offerors ( <E T="03">e.g.,</E> time and costs of litigation, lost income) and the Government ( <E T="03">e.g.,</E> loss of best-value provider, delays in mission execution via intended contract solution). Ambiguity regarding the perceived intent at FAR 52.204-7(b)(1) has led to disparate agency interpretations and uncertainty in the acquisition community. In practice, contracting officers, in the preaward environment, generally verify registration status of offerors at the points of offer submission and contract award and not the time between those two points. Contracting officers typically do this registration review as part of a broader responsibility and qualification review in SAM ( <E T="03">e.g.,</E> reviewing the entity's status for possible debarment, suspension, proposed debarment, or other Governmentwide exclusion). While the provision at FAR 52.204-7 speaks to offeror responsibilities and does not impose a requirement on agencies to confirm an offeror has been registered at any and all moments between offer submission and award, the recent COFC and GAO decisions make it clear that failure to do so imperils the award decision. In summary, this rule is expected to mitigate the risk of more litigation and mission delays. <HD SOURCE="HD1">V. Executive Orders 12866 and 13563</HD> Executive Orders (E.O.s) 12866 (as amended by E.O. 14094) and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 21k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━