If you run your business from your home (or your car, or your neighborhood coffee shop) while using a virtual office space as an address and mail drop, this post is for you. Your company’s physical address may not pass muster, which could delay your ability to register in SAM.gov and start winning government contracts.
Why? The short answer is that registration in SAM.gov requires a physical address, which the government interprets to mean (at a minimum) an exclusive office or desk in a co-working/shared office space.
As background, successful SAM registration or renewal requires that the Defense Logistics Agency (DLA) assign your entity a Commercial and Government Entity (CAGE) code. The CAGE rules state that entities must have a “physical address,” not just a mailing address. This has always excluded PO Boxes and commercial mailbox services, but in the past, DLA has accepted co-working/virtual office addresses without digging too deeply. Recently, this seems to have changed. As DLA explained in a recent email to a client:
Unfortunately our department has strengthened our requirements for physical address validation. In order for us to accept a virtual office type location as a valid physical address for your company, you must have an exclusive office or desk number clearly reflected on your lease agreement. We no longer accept co-working or shared office spaces where you have the option to purchase non-exclusive meeting space on an as needed basis. We no longer accept mail/phone virtual services only and now require a designated/assigned office or desk number that is used exclusively by your company. In order to use the virtual office address, you must upgrade to a dedicated office or desk and be able to provide an updated lease agreement reflecting the change.
So, if you’re planning on registering on SAM.gov, you have a few options – none of which are perfect.
First, you could do what DLA wants – contract with a co-working or virtual office space for an exclusive desk or office. This has the advantage of allowing you to keep your home address out of the public record, but the disadvantage of being far more expensive than the purely virtual services you’re paying for now.
Second, you can use your home address. DLA’s rules are clear that a home office (at the home of an officer or board member) is an acceptable physical address. The obvious advantage here is that this option is free. But, it does expose your home address to public search.
Whatever you do, don’t decide to skirt the rules. You probably won’t get away with it. And, even if you sneak one by DLA this time, they will re-review your CAGE information every year when you renew your SAM.gov validation – if an issue with your addresses causes a delay in renewal, the consequences could be dire.
So, before you decide to register on SAM.gov, figure out which option is right for you, and be sure to get your ducks in a row.