Many government contractors are familiar with the System for Award Management (SAM) that recently replace several different government registrations including ORCA and CCR. What many contractors may not be aware of is that the SAM system requires contractors to update their registration at least annually. There has recently been an update published by the Small Business Administration to the Code of Federal Regulations (13 CFR Parts 121, 124, 125, 126, and 127) that not only reiterates this annual recertification but outlines penalties if the certification is fraudulent. The new rule establishes that there is a presumption of loss by the government equal to the value of the contract if this is misrepresented by the business. It also provides that the business will no longer be classified a small business (or other socioeconomic status qualification) if they fail to update SAM at least annually until such time as they update SAM. This revision is a result of the Small Business Jobs Act of 2010. The new rule becomes effective August 27, 2013.
What is significant about this is that a small business, for instance, could fail to be classified as a small business if they don't update the SAM database annually. This could not only affect the business status in proposing for new business but could also affect current business. Say for instance that the business has a contract that was a set-aside for a small business but after a year failed to update SAM. Technically the business is no longer a small business and therefore fraudulently working on that contract that was set-aside for small business.
Recently, we have also noticed problems with some clients with their SAM registration. They didn't notice a problem until they were trying to process an invoice on the Wide Area Workflow (WAWF). The holdup here has a severe impact on your cash flow. I know that as a small business ourselves, we would not tolerate an issue that holds up our Accounts Receivable due to an oversight on our part to register with our clients. So it really makes sense to watch this and keep your registrations current. Or, better yet, have someone like ReliAscent remind you to keep this current.