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GAO Finds SAM Registration Requirement to be Minor Informality

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FAR 4.1102 requires offerors to register in the System for Award Management (“SAM”) at the time an offer is submitted to the government, with limited exceptions such as micro-purchases, classified contracts, emergency contacts, and some others.  However, the Government Accountability Office (“GAO”) recently found that an offeror’s failure to renew its SAM registration was not so vital that such an oversight merited excluding the proposal from consideration for the award.

In Master Pavement Line Corporation, B-419111, Dec. 16, 2020, the GAO sustained a protest by a low-bidder whose bid was rejected as nonresponsive for its failure to have an active SAM registration when it submitted its proposal.  Despite its failure to timely renew its lapsed registration, the offeror nonetheless renewed its registration before the agency made an award.  Notwithstanding the offeror’s correction, the agency did not reverse its rejection for non-responsiveness.

In its protest, the offeror set forth two arguments: the first narrowly attacked an ambiguity in the solicitation, while the other broadly attacked the principle that a registration requirement was a material term of the solicitation which could not be corrected after the proposal was submitted.  Interestingly, the GAO sustained the protest on the broader ground while denying the protest on the narrow ground, as the ambiguity was patent and would have had to be addressed in a protest of the solicitation itself, making the protest ground now untimely.

The GAO analyzed whether the offeror’s failure to meet the SAM registration requirement when it submitted its proposal was a material defect or merely a minor informality, curable under FAR 14.405.  If an error is found to be immaterial under FAR 14.405, the contracting officer is required to allow the offeror to cure the defect.  The GAO’s discussion focused heavily on the agency’s determination that the bid was “nonresponsive”, explaining that “registration–or failure to register–in SAM does not affect a firm’s obligation to perform in accordance with the terms of the IFB, . . . is not a matter of responsiveness, but rather a matter of responsibility.”  The GAO went on to define “a responsive bid [as] one that, if accepted by the government as submitted, will obligate the contractor to perform the exact thing called for in the solicitation.”  The GAO further stated that bids are responsive “[u]nless something on the face of the bid, or specifically a part of it, limits, reduces or modifies the bidder’s obligation to perform in accordance with the terms of the solicitation[.]”  Finding that the SAM registration requirement was a matter of “form and not substance”, that it had a “negligible effect on price, quantity, quality, or delivery”, and could be corrected “without being prejudicial to other bidders”, the GAO concluded that the defect was immaterial and fell within the ambit of FAR 14.405’s curability provision.

While technical formalities often justify adverse agency action in the government contracting process, there are some exceptions to the rule as demonstrated by Master Pavement Line Corporation.  Disappointed offerors should consult with counsel in considering their options.  As always, Vandeventer Black’s government contracts attorneys are available to assist you.

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