Avoid being among the 120,000 businesses with SAM.gov registration issues.
You must register your company with the federal government’s vendor database to get government contracts. It is called the System for Award Management (SAM). Registration is free. You do not need help to register, but many choose to get assistance to avoid mistakes and better position themselves to market to government customers.
SAM.gov registration issues are much more common than you might think. Shockingly, an analysis from Georgia Tech found that 1 in 5 registrations within SAM contain errors. The university’s research revealed that an estimated 120,000 companies’ records had mistakes. (Keep in mind that figure only relates to live registrations, not including ones that are flagged for review by the government.)
This piece looks at some of the most common mistakes.
Top SAM Registration Issues to Avoid
Mistake #1: Thinking user account creation amounts to registration
Registration is not on an individual basis but on an entity basis. However, an individual must first create a user account to register an entity in SAM.
Typically when new contractors think they are registered but are irretrievable via public search, they have not registered. They have simply created a user account and thought the process was complete.
Mistake #2: Incorrectly identifying the company as disadvantaged
One of the two most problematic SAM.gov registration issues is errant self-certification as a Small Disadvantaged Business (SDB). Regardless if you register this way in error, it is considered misrepresentation and carries penalties. Unfortunately, it is also easy to make this mistake.
Your business must be owned 51 percent or more by economically and socially disadvantaged people to be classified as an SDB. Five percent or more of federal contract money is to go to Small Disadvantaged Businesses, per government objectives.
It is incredibly common for business owners to register incorrectly as SDBs, per the Montana Procurement Technical Assistance Center (PTAC). Be careful, advises PTAC, because the design of the registration confuses many registrants into accidentally stating that they are disadvantaged.
Mistake #3: When entering the number of employees and total receipts, failing to include affiliates
Many companies are small and do not have affiliated businesses, so this concern is irrelevant. However, if you are larger, this miscalculation is the other of the SAM.gov registration issues (along with Mistake #2) that can be the most problematic.
It is also extremely common. In fact, it might even be more likely than not that a company will make this SAM registration mistake. If you are a large business, even if via affiliation, you need to be clear that you are not a small business – as indicated by your staff and receipt numbers.
If you are unsure if you should count another organization as an affiliate, you can look over the Small Business Administration’s rules on the subject.
Mistake #4: Not using the legal business name to register
A DBA (“doing business as”), fictitious name, or trade name is an assumed business name rather than a legal name. That distinction is important because SAM registration can only be completed with your legal business name – so that the contract is valid.
The federal government verifies that your legal business name is correct via the Data Universal Numbering System (DUNS) record from Dun & Bradstreet. Make certain your D&B record is accurate before SAM registration. If it needs correction in D&B, you will have to wait 1-2 business days to register to avoid problems.
Note that sole proprietors should enter their legal business name in the format “[last name], [first name] [middle initial].”
Mistake #5: Failing to respond rapidly and accurately to the CAGE code office
Various SAM.gov registration issues can trigger an email from the Commercial and Government Entity (CAGE) Code office. The subject line of the email will start out “RESPONSE REQUIRED” and include your DUNS number.
This email could arise because a previous building tenant has a registration with a matching physical address or because another company has a similar name to yours. Whatever the case, you must follow the instructions within the CAGE office email exactly – and you have just three business days to do so.
Mistake #6: Incorrect completion of the Automated Clearing House (ACH) “U.S. Phone” field
Of all the SAM.gov registration issues, this one may occur more often than any other.
People incorrectly put in their number, whether for their personal or business phone, rather than for their bank. It is important to input a number for your bank – specifically for its ACH department or coordinator – rather than entering your phone number. This number is necessary so that the government can resolve any problems that might occur during EFT transfer (so you can get paid).
Mistake #7: Following submission, not following up with an authorized administrator letter
Physical letters that have been officially notarized are now part of the registration process. Since this requirement has only been around since March 2018, neglecting to send the letter is one of the most frequent SAM.gov registration issues.
A partner, officer, executive, or another individual with signatory authority must sign the letter and send it to the Federal Service Desk (FSD). The letter designates the individual who will be the SAM authorized administrator. Once your registration is active, this letter must be received by the FSD within 60 days.
Getting The Help You Need
If you want to form a business relationship with the federal government and secure contracts, the first step is correct SAM registration. While you can complete the registration yourself, it often results in errors such as the above. That’s why a consultant can be invaluable. At Select GCR, our strategic involvement simplifies the overall process and allows business owners to focus efforts on their principal business activities. Contact us today to discover how we can help you.
