In March 2018, the General Services Administration began requiring notarized letters from entities registering in SAM.gov. SAM is an acronym that stands for the System for Award Management. Anyone seeking to work as a government contractor or receive federal grants must be registered on this website. The regulation was later extended to existing government contractors wishing to renew their registration or make changes. Although it was a measure to deter fraud, this “solution” has backfired and contractors are the ones paying the price.
One of the issues with this new requirement is how long it takes to process the letters. Thousands of letters have been sent to the Federal Service Desk. Many of them are sitting in boxes waiting to be sorted by hand. For those looking to work as federal contractors, the door seems to be closed.
The numbers don’t lie. Within the first week of May, there have actually been zero new SAM registrations completed. Basically, the federal government has shot itself in the foot. They need over $500 billion of work that needs to get done every year. They’ve now made it extremely difficult for themselves to actually get the people and materials required to fulfill their own needs.
This issue doesn’t end at prospective contractors. Those currently working with the federal government are getting an even worse deal. In the U.S., there are many people who rely on government contracts to make a living.
To continue working with the government, all of them will eventually have to renew their SAM registrations. This also requires the letter and this process is also getting backed-up. Many of these small business owners are now left to face delays with no definitive timeline when their payment will be received for work already completed. Last week, there were 5,064 expired SAM registrations.
It might be assuring to think that this is just a long, tedious process. It might a situation being handled diligently, and the Federal Service Desk is doing what they can to help contractors. Sadly, that’s not the case.
“They’re really nonchalant about it. They’re rejecting letters for items that are not missing and they claim that they haven’t received letters that we know are there. It’s all just a big mess,” says Christie Jackson, the Case Manager Department Lead at US Federal Contractor Registration. Since March, she has been working to get answers from the Federal Service Desk for USFCR’s customers.
USFCR is a third-party government contracting firm located in St. Petersburg, Fla. They specialize in managing SAM registrations for companies, and train clients on how to bid for contracts. They’ve been on the forefront of helping businesses who are facing the brunt of these new regulations. According to Jackson, there have been several contractors who have been losing out on millions of dollars. She has also been informed by the FSD that currently, they’re just starting to get to process letters that were submitted in early April.
A Band-Aid “Solution”
To add even more insult to injury, it’s not clear how the notarized letters are supposed to deter fraud. This ordeal began when bank account information on SAM.gov was being changed. Attackers were able to get their victim’s information to access their accounts through phishing. This meant that they used the guise of trustworthy emails to obtain private information from their target.
The problem affected only a few contractors. Imposing new regulations on all government contractors is excessive. SAM.gov only requires a username and password to log in. This issue barely counts as a hacking and looks more like fraud. Again, it was because contractors gave away their own private information that caused this incident.
Such incidents occur with many organizations and there are numerous viable solutions. None of them involve a physical piece of paper that has been signed by a notary. These measures look like they put in place by people with little to no experience in cybersecurity. The GSA’s “solution” is ineffective, and is only causing damage to the federal marketplace. With hurricane season on the horizon and FEMA requiring the help from contractors, the situation looks even bleaker.
Directions for your notarized letter can be found on US Federal Contractor Registration’s website. If you are a contractor in need of assistance in registering, fill out this form to get in contact with USFCR.