New SAM Registration Questions Attempt to Remedy Small Business Contract Spending Issue

SAM REGISTRATION
SAM REGISTRATION
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Yes it is true.  The GSA has made more amendments to the System for Award Management (SAM) registration.  In what seems like a positive move for small businesses is currently only resulting in confused calls and uninformed contractors. SAM has been sending out emails to registered government contractors about 4 new questions incorporated into the SAM registration.  These four new questions were added on November 1st, 2014 to the Federal Acquisition Regulations in FAR Subpart 4.18 – Commercial and Government Entity Code (CAGE).  These new questions are without question an answer to the on-going small business contracts issue.  As stated presented by politicians, activists and movements like the Small Business League, small business contracts are still being awarded to large businesses and they are finding proof.

Recently, the Small Business Administration (SBA) along with several other federal agencies have been under the spotlight for awarding contracts that are specifically set-aside for small businesses instead to large corporations.  After investing the numbers at the Federal Procurement Data System (FPDS), federal officials have found out a horrible truth.  All the speculation was right. Small business contracts are in fact being awarded to large businesses and the SBA has done nothing to fix it. The government does not want to go public on this issue because that would create too much of an uproar.  So they decide to quietly add these few questions as a soft fix to a much larger, lingering issue.

There must be a reason why the SBA has had 3 different Small Business Administrators in the past year and 3 months. You do the math, the system is broken. If you think I’m wrong here is a breakdown of small business spending developed by the American Small Business League using only data released by the Federal Procurement Data System from 2011 : http://www.asbl.com/images/ANC8aFY2011.pdf.  The data shows more that $2.6 billion dollars in small business contracts being awarded to 100 different large business government contractors.  These are the issues the SBA wants to push under the rug and hide. The problem is that all facts have surfaced and the American small business community does not wish to be fooled any longer.

These new questions will hopefully help remedy part of the problem by distinguishing if a business is actually small, or if it is just a small company owned by a large corporation.  Businesses that lie about their business title can receive a fine between $10,000 and $100,000 depending on the severity of the error according to the FAR 31 1352-(C) in the Reps and Certs section.

This is the email that SAM is circulating to their 500,000 plus users:

 

Subject: New Requirement for Commercial and Government Entity

Effective November 1, 2014, a new Federal Acquisition Regulation (FAR) Subpart 4.18 – Commercial and Government Entity Code (CAGE) requires you to answer questions about your entity’s ownership in order to maintain an active registration in SAM. To better understand how this impacts your entity registration, please carefully read the following four sections: 

1. Ownership of Offeror Questions
2. Ownership of Offeror Definitions
3. Immediate Owner and Highest-Level Owner CAGE Codes
4. Prepared Now to Report Your Owner’s CAGE Code(s)

1. Ownership of Offeror Questions

The new Ownership of Offeror questions are in the “Core Data” section of your entity registration. Once you pass the “CAGE or NCAGE Code” page, you will see a new page called CAGE Ownership Details.

On this new page, SAM will present you with a series of questions to determine if another entity owns or controls the entity you are registering. If you state you have an owner, you must provide the CAGE Code for that owner. SAM will then verify your owner’s CAGE Code with the Defense Logistics Agency (DLA) CAGE database.

The responses you provide on this page will be used to complete a new FAR provision (FAR 52.204-17 Ownership or Control of Offeror) which you will certify to in the “Representations and Certifications” section of your entity registration.

There are two levels of ownership questions you will have to answer on the following page: Immediate Owner (if applicable) and Highest-Level Owner (if applicable). When reading the definitions below, remember the entity registration you are updating is considered the potential Offeror.

2. Ownership of Offeror Definitions

An Immediate Owner means an entity, other than the offeror, that has direct control of the offeror. Indicators of control include, but are not limited to, one or more of the following: Ownership or interlocking management, identity of interests among family members, shared facilities and equipment, and the common use of employees.

The Highest-Level Owner means the entity that owns or controls an immediate owner of the offeror, or that owns or controls one or more entities that control an immediate owner of the offeror. No entity owns or exercises control of the highest level owner.

3. Immediate Owner and Highest-Level Owner CAGE Codes

If you answered that you do have either an Immediate Owner and/or a Highest-Level Owner, you must provide your owner’s CAGE Code as part of your registration update. You will not be able to continue beyond the CAGE Ownership Details page without doing so.

a. If you know your owner’s CAGE Code, you must enter and verify it in SAM on the CAGE Ownership Details page. SAM will show you the Legal Business Name and Physical Address associated with the CAGE Code you provided so you can confirm you are identifying the correct entity as your owner.

b. If you don’t know your owner’s CAGE Code, you can search the CAGE database for it using the DLA Business Identification Number Cross-Reference System (BINCS) search page (https://www.dlis.dla.mil/bincs/begin_search.aspx). Then, you must enter and verify your owner’s CAGE Code in SAM on the CAGE Ownership Details page.

c. If your owner’s CAGE Code is not in BINCS, your owner must get a CAGE Code assigned in one of two ways: 1) They can either register in SAM and a CAGE Code will be assigned during processing, or 2) If your owner does not intend to do business with the U.S. Federal Government directly and FAR Subpart 4.18 does not require them to register in SAM, they will need to request one from the DLA CAGE Branch directly by completing their request on-line (http://www.dla.mil/CAGECodeRequestOrUpdate, this capability will be active on November 1, 2014). If your owner has difficulty completing their request on-line and needs assistance, please contact the DLA Customer Interaction Center at dlacontactcenter@dla.mil or call Commercial 1-877-352-2255 or DSN 661-7766.

d. If your owner is located outside the U.S. or its territories and does not have an NATO CAGE (NCAGE) Code searchable in BINCS, they need to request an NCAGE Code using the NCAGE Request Tool (https://eportal.nspa.nato.int/AC135Public/scage/CageList.aspx). You can complete your current update without your owner’s NCAGE Code: you get a 90-day grace period from the date you submit your registration. However, once your international owner’s NCAGE Code has been assigned and appears in BINCS, you must log back into SAM, update your entity registration, and provide your owner’s NCAGE Code on the CAGE Ownership Details page. If you do not update your entity’s registration to provide your owner’s NCAGE Code within 90 days, your entity’s registration will expire.

4. Get Prepared Now To Report Your Owner’s CAGE Code(s)

We recommend that you prepare yourself now to answer the Ownership of Offeror questions by identifying if you have either an Immediate or Highest-Level Owner and making sure you know their CAGE Codes. If you have any questions about this new requirement, please contact the Federal Service Desk (www.fsd.gov) (FSD) at 1-866-606-8220 (Monday – Friday 8 a.m. to 8 p.m. ET).

 

Businesses that need help with correcting their SAM registration and making sure their business or businesses are complaint with the law can call the Contractor Hotline at 1(877) 252-2700 to speak with a live Acquisition Specialist about fixing your government registration.

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