Government contractors must be registered in the System for Award Management (SAM) and complete required representations and certifications annually. FAR 52.204-7 requires bidders, with some limited exceptions, to be registered in SAM at the time of bid and to continue to be registered until time of award, during performance, and through final payment. Recently, the Government Accountability Office (GAO) addressed the issue of whether a bidder’s failure to have an active registration in SAM at time of bid renders the bid nonresponsive and ineligible for award in Master Pavement Line Corp., B-419111 (Dec. 16, 2020). GAO concluded that SAM registration is a matter of responsibility not bid responsiveness.
In that case, the Federal Highway Administration (FHWA) issued an Invitation for Bids (IFB) for the repair of signs and guiderails, as well as other safety repairs. The IFB included a checklist for bid submission that advised that bidders had to be registered in SAM prior to contract award. Master Pavement submitted a timely bid and was the apparent low bidder.
FHWA rejected Master Pavement’s bid as nonresponsive because Master Pavement did not have a current SAM registration. Master Pavement’s SAM registration had expired back in 2013. Master Pavement asked FHWA to reconsider its decision to reject Master Pavement’s bid, noting that it had submitted its SAM registration for processing two days after bid opening. Master Pavement’s SAM registration ultimately was reactivated the same day that FHWA denied Master Pavement’s request for reconsideration. Master Pavement then filed a protest with GAO.
Master Pavement argued that the IFB contained conflicting instructions about when bidders had to be registered in SAM because the checklist advised that bidders had to be actively listed in SAM prior to contract award while FAR 52.204-7 required registration at time of bid. It also argued that its failure to possess an active SAM registration at bid opening should have been waived by the agency as a minor informality since it was in fact registered in SAM shortly after bid opening and prior to award. FHWA, on the other hand, argued that the bid was nonresponsive because Master Pavement did not have an active SAM registration when it submitted its bid as required by FAR 52.204-7. FHWA also argued that Master Pavement’s challenge to the IFB terms was untimely as challenges to the terms of an IFB have to be filed prior to bid submission.
GAO found that the IFB language was conflicting, but agreed with FHWA that the protest was untimely. However, GAO found that FHWA improperly rejected Master Pavement’s bid as nonresponsive. As GAO explained, a responsive bid is one that, if accepted by the Government as submitted, will obligate the contractor to perform the exact thing called for in the solicitation. Unless something on the face of the bid, limits, reduces or modifies the bidder’s obligation to perform in accordance with the terms of the solicitation, the bid is responsive.
FAR 14.405 requires the procuring agency to either waive or give the bidder the opportunity to cure immaterial defects in a bid (i.e., defects that have a negligible effect on price, quantity, quality, or delivery). GAO found that the failure to be registered in SAM and complete the annual representations and certifications was an immaterial defect that did not impact the responsiveness of the bid. Instead, it was a matter of contractor responsibility. Therefore, according to GAO, FHWA should have given Mater Pavement the opportunity to cure the failure after bid opening.
While GAO concluded that the failure to be registered in SAM does not render a bid nonresponsive, this does not mean that a bidder should wait to register in SAM. First, the bidder may not have time to become registered in SAM before the agency wants to make an award decision. Second, SAM registration and completion of the representations and certifications is a matter of contractor responsibility. A bidder who is not registered may be found nonresponsible by the procuring agency. Bidders who are not responsible are ineligible for contract award.