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Client's SAM registration lapsed mid-contract and the payment office kicked back the invoice. Now what?

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I do the books for a handful of small firms and keep a calendar of their SAM.gov expiration dates. One slipped through. It's a janitorial client on a federal base contract, and their renewal sat in Submitted while the old registration expired. They're active again now, but the invoice we put in during the gap came back rejected with a note that the entity wasn't active.

The owner is convinced the contracting officer can terminate them over this, or that the work they did during the gap is never getting paid. I've read the renewal threads here, but they're all about getting the renewal done, not what happens to a contract that's already running.

Does a lapse in SAM registration put the contract or the payment for that period at risk, or do we just resubmit the invoice now that the registration is active again?

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asked Darlene S. Bookkeeper for several small contractors · Wichita, KS · 44 rep

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Resubmit it. The rejection is a payment hold, not a forfeit. FAR 52.204-13(c) requires the contractor to stay registered in SAM during performance and through final payment, and FAR 52.232-33(d) says that when the contractor's SAM information isn't right, the government doesn't have to pay until it's fixed and the invoice is treated as not proper for prompt payment. Once the record shows Active again, that condition is gone and the work from the gap is still billable.

We had this exact thing on a VA order. Renewal sat in Submitted, the invoice bounced, and once the record went Active we put in a fresh invoice with a new number and date and it paid on the normal cycle. Don't just reopen the old one. FAR 32.905(b)(1)(ii) wants the invoice dated close to when you send it.

Two things to know:

  • Prompt payment interest doesn't run for the gap, because an invoice that isn't proper doesn't start the clock.
  • 52.204-13(c) puts liability for bad SAM data on the contractor, so check that the UEI and banking info in the renewed record match the contract before you resubmit.

On termination, nothing in 52.204-13 makes a lapse an automatic default, and once the record is Active the clause is being met again. I'd still send the contracting officer a short note saying the registration lapsed, the date it went Active again, and that the invoice is going back in. Better they hear it from you than from the payment office.

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answered Lorena D. Owner, medical supplies distributor · Lakeland, FL · 10 rep
This is solid advice. We had a similar situation where the payment office held an invoice due to a lapsed SAM registration, and getting it reactivated and resubmitting resolved it. The key is fixing the SAM record promptly. · Priya S. ·
The new invoice number and date was the part I was missing, I'd have just resent the old one. Checking the banking info in the renewed record against the contract before it goes back in tomorrow. · Darlene S. ·
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Your client's client can use the System for Award Management (SAM) Exclusions database to check for contractor compliance, not just the active registration status. Lorena is right about the invoice. The contracting officer and the payment office check SAM.gov for an active registration. A lapse means the system flags the contractor as ineligible for payments or new awards during that period. The key is getting it active again and then resubmitting the invoice. I always advise my clients to set up calendar reminders for their SAM renewal at 60 and 30 days out, and to check the status weekly in the last month. It's a free registration, but a lapsed one can cause headaches.

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answered Luis A. Verified vendorSDVOSB founder, court reporting and legal support · San Antonio, TX · 358 rep

Your answer

Sign up to answerCite the FAR clause or procurement code where you can.

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