Federal contractors must register in the System for Award Management (SAM) to receive government contracts. This process requires obtaining a Unique Entity ID (UEI) and providing accurate business information. While exemptions exist for micropurchases under $10,000, emergency acquisitions, and certain subcontractors, non-compliance typically results in offer rejection or contract termination. Contracting officers verify registration status through sam.gov, and penalties for misrepresentation can include suspension or debarment. The following sections explore compliance requirements in greater detail.
SAM Registration: Mandatory Requirements and Legal Framework
The System for Award Management (SAM) registration serves as the foundation for all government contracting activities, establishing a standardized process for business identification and verification. Federal law mandates that any entity seeking federal awards or contracts must complete the registration process before submitting proposals or receiving funds.
The registration process requires several critical elements: a valid Unique Entity ID (UEI), accurate business information including legal name and address, and Employer Identification Number. Prior to beginning registration, businesses should first obtain a DUNS number which serves as a prerequisite identifier for the SAM system.
Organizations must maintain compliance with SAM regulations by renewing their registration annually, typically activating within 24 hours after submission.
Meeting these eligibility criteria guarantees organizations can legally participate in government procurement opportunities.
Businesses must verify all information remains consistent across platforms and accurately reflects their current organizational structure to maintain valid registration status. Entities must understand that SAM serves as a centralized registry for all federal vendors seeking to do business with the government.
Exemptions and Exceptions: When SAM Registration Is Not Required
While most entities seeking federal contracts must register with the System for Award Management (SAM), federal acquisition regulations establish specific circumstances where this requirement may be waived or modified.
These exemptions typically apply to specific contract types and specialized procurement processes. Micropurchases below $10,000 and simplified acquisitions between $10,000-$250,000 often qualify for exemptions. Small businesses should ensure they have proper NAICS codes identified to qualify for relevant set-asides even when exemptions apply.
Emergency acquisitions under FAR Subpart 18.2 may bypass standard registration requirements to expedite urgent needs. Additionally, subcontractors below minimal dollar thresholds, foreign entities operating outside U.S. jurisdiction, and participants in certain specialized programs like Other Transaction Authority (OTA) contracts may be exempt. Entities appearing on the SAM exclusion list are prohibited from receiving federal contracts regardless of these exemptions.
Some agencies have authority to issue class deviations through the FAR Council, creating program-specific exemptions for unique circumstances or specialized contract types.
Enforcement Mechanisms and Consequences of Non-Compliance
Federal government contract enforcement relies on a thorough system of verification mechanisms and compliance protocols designed to confirm proper registration with the System for Award Management (SAM).
Contracting officers must verify SAM registration at both offer submission and award stages, using the Unique Entity Identifier (UEI) through sam.gov.
Non-compliance triggers a cascade of consequences. Unregistered entities face offer rejection, payment withholding, and possible contract termination.
Agencies conduct compliance audits to confirm ongoing registration validity, with enforcement actions escalating from administrative remediation to potential suspension or debarment. Proper contract vehicle management is essential for businesses to maintain compliance and avoid these enforcement actions.
Misrepresenting information in SAM profiles can result in civil or criminal charges under the False Claims Act, carrying substantial penalties.
Remediation typically includes a 30-day grace period for registration completion, but systemic violations may permanently disqualify contractors from federal opportunities. The FAR allows exceptions to registration requirements in cases of unusual urgency when immediate contract action is necessary.
Frequently Asked Questions
Can Foreign Contractors Use an American Subsidiary for SAM Registration?
Foreign contractors cannot use an American subsidiary for their own SAM registration. Foreign subsidiaries must register independently in SAM with their own unique identifiers, though both parent and subsidiary can maintain separate registrations.
How Do Merged Companies Handle Existing SAM Registrations?
Merged companies must create new SAM registrations as registration transfer is not permitted. The original UEI becomes inactive post-merger, requiring new entities to obtain a new UEI and complete the registration process.
Will Bankruptcy Affect My Active SAM Registration Status?
Bankruptcy itself doesn’t automatically affect SAM registration status. However, entities must manually update their SAM profile to reflect bankruptcy filings. Maintaining active registration during bankruptcy proceedings is essential to avoid payment disruptions and compliance issues.
Can Multiple Divisions of One Company Register Separately?
Yes, multiple divisions of one company can maintain separate registrations in SAM. Each division requires its own Unique Entity ID and distinct registration for proper division compliance with federal contracting requirements.
Are CAGE Codes Automatically Updated When Company Addresses Change?
CAGE code updates are not automatic when address changes occur. Address change procedures in SAM trigger an eMod modification request, but the CAGE code itself remains unchanged despite the updated company location information.