Is SAM.gov registration required to receive Coronavirus State and Local Fiscal Recovery Funds? How can award recipients mitigate award delays caused by Sam.gov registration backlogs?

Yes, a full SAM.gov registration is required of all contractorrs, subrecipients, and beneficiaries receiving Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”), except where explicitly excluded (e.g., individuals and households).[1] In addition, all eligible payees are required to have a Unique Entity Identifier as part of registration and must maintain the SAM.gov registration in active status.[2]

General Requirements

The Code of Federal Regulations, 2 CFR, § 200. 214 restricts federal award recipients from providing subawards to or engaging in contracts with disbarred, suspended, or otherwise excluded and ineligible entities.[3] The SAM.gov registration serves as a tool to help ensure that a recipient is not suspended or disbarred from receiving federal funds.   

Exceptions

CSLFRF Compliance and Reporting Guidance states that recipients should maintain procedures for obtaining information evidencing a given contractor, subrecipient, or beneficiary’s eligibility, including a SAM.gov registration (except with respect to individuals or households for which a SAM.gov registration is not required).[4]

This guidance also provides that individuals and organizations that received CSLFRF funds as end users do not qualify as “subrecipients.” Such individuals and organizations, in this case, are instead characterized as “beneficiaries.” Though the audit requirements of the Single Audit Act and 2 CFR, § 200 (f) do not apply to beneficiaries,[5] organizations that are beneficiaries do not appear to be excluded from the SAM.gov registration requirement.

Suggestions and Action Items to Mitigate Award Delays

To mitigate award delays caused by SAM.gov registration, cities could consider contracting  prior to full clearance of the SAM.gov registration and adding terms and conditions in the contract solicitation and contract requiring a complete SAM.gov registration to be received within an allotted timeframe (e.g., 30, 60, or 90 days).

Executing a contract before the contractor provides support for full SAM.gov registration is a mitigative measure which may speed up the contract award, but which also increases the risk that cities could contract with a party which the federal government has debarred, suspended, or otherwise excluded from participation in federally funded programs. The federal government typically takes these suspension and debarment actions in response to serious problems with a contractor or subrecipient. As a result, the federal government could retroactively render contract expenditures ineligible for reimbursement, if it is later confirmed through the clearance of the SAM.gov registration that the contractor has been excluded from participation in federal programs.

CSLFRF awards, as with most federal grants, require meticulous attention to the many nuances of grant administration. Cities can consider the following proactive measures to help them navigate delays in SAM.gov registration processing:

• Communicate the requirement to potential contractors proactively and emphasize the importance of providing any required documentation in a timely manner.
• Establish robust and documented internal controls for compliance and monitoring of recipient, subrecipient, contractor, and beneficiary relationships.
• Conduct thorough eligibility reviews for all subrecipients, including financial integrity and merit reviews, and pre-award risk assessments.
• Include SAM.gov registration requirements in all contract solicitations, requests for proposals, contracts, documents, and agreements.
• Where reasonable and feasible, consider use of revenue loss funding in which no subrecipient relationship would be established, thereby reducing reporting requirements under the Uniform Guidance.
• Monitor compliance with and completion of all established pre and post award requirements including confirmation of SAM.gov registration.

Municipalities should regularly review Treasury guidance and portals, as sub-regulatory guidance and frequently asked questions will likely reflect the most updated information. Municipalities may also wish to consult with counsel and their accounting team to ensure compliance with federal, state, and local laws.