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CAGE and Ownership rule


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On Nov. 1, a new rule goes into effect that will require contractors to disclose in their SAM registration the name and CAGE Code of an "immediate owner" and a "highest-level owner." Unfortunately, the definitions are not clear and we are trying to decipher them.

A large company will have many organisational units such as divisions, branches, business units, etc. (collectively, "divisions"). These divisions are not separate legal entities; their entity is the corporation and the legal contracting entity is the corporation, not the division.

A large corporation may also own several subsidiaries. These subsidiaries are separate legal entities, incorporated and registered in a jurisdiction, but their stock is owned by the corporation. The legal contracting entity is the subsidiary.

Here's the problem: the rule and the discussion in the Federal Register notice do not make it clear whether the disclosure only applies to separate legal entities such as subsidiaries, or whether it applies to all organisational divisions. One would think that only a separate entity could have an "owner", and the FR discussion suggests it only applies to legal entities. However, the definitions and discussion talk about control as well as ownership. Furthermore, a presentation that DLA sent out talks about management offices and locations as being separate entities. There are other statements in the FR discussion that could support either interpretation.

We had a call with DLA to discuss this. At first they didn't understand the distinction. After explaining it to them, they claimed to understand the problem and told us they would get back to us. They have been silent since. Nov. 1 is approaching, and we need to put out clear guidance to all of our SAM registrations.

Do we have anyone here from DLA who can explain what the rule applies to? If not, I'm interested in the opinions of this forum.

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  • 7 months later...

I have also requested clarification and have not received any additional guidance. I believe (my own personal opinion) that the government is wanting to get away from using DUNS as D&B does not have a mid-level "parent" configuration and the government wants to know for large organizations that informal mid-level parent information. They have therefore made the ownership of offeror very broad to fit small companies and very large organizations - leaving interpretation up to the contractors, I guess!

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