If you’re interested in becoming a government contractor, you likely have heard the term CAGE code. The Commercial and Government Entity Code, or CAGE Code, is something that every federal contractor needs, but why is this code important and how do you apply for a code? Let’s break down some key facts, benefits and requirements regarding CAGE codes and contracting.
What Is A CAGE Code?
A CAGE code is a five-character alphanumeric unique identifier assigned to entities (businesses) by the Defense Logistics Agency (DLA). This code is used by all United States government agencies to track contractors and ensure compliance with federal procurement requirements.
Who Needs A CAGE Code?
- Your business will need a CAGE code if:
- You plan to bid on federal contracts.
- You want to sell products or services to the Department of Defense (DoD).
- You want to acquire grants or funding from certain federal agencies.
How To Get A CAGE Code?
To do business with any federal agency, business owners must complete their registration in the System for Award Management (SAM). This database includes pertinent information about all government contractors, and you must have an active SAM account to bid on government contracts.
You can complete your SAM registration at SAM.gov, and the government does not charge a fee to register. However, the registration process and SAM renewal process can be quite complicated and take many hours (10 or more) to complete. Therefore, many business owners simply hire a third-party registration service to complete this step.
At Federal Contractor Registry, we can complete your SAM registration (or renewal) quickly and 100% accurately, so that you will be eligible to bid on government contract jobs as soon as possible. Once your SAM registration is approved, a CAGE code is assigned, and you are now eligible to bid on government contracting jobs applicable to your business.
In addition to helping with SAM registration, we also help small businesses sign up with the Small Business Administration (SBA), which offers many helpful services for small business owners who wish to bid on government contracts.
We also can help with tasks such as the SAM notarized letter requirement. In order to initially register in SAM, all business owners must submit a letter listing their Entity Administrator, which is the person who is authorized to make any changes to your SAM account.
Additionally, we also will help you acquire your Unique Entity Identifier (UEI), which is a code needed for SAM registration. In previous years, contractors were asked to provide their DUNS (Data Universal Numbering System) number, but that has been switched to the UEI number. This is a fairly quick process, but you must have your UEI before you can start SAM registration.
Once your SAM registration is complete, you will receive both a CAGE code and a Marketing Partner Identification Number (MPIN). Your CAGE Code is public, and it should be listed on your website as well as on your Capability Statement. However, the MPIN number is a private code that you use to log in to SAM. Never share your MPIN with anyone.
As a side note, your Capability Statement is a document you will need to create. It is much like a resume and includes sections such as Differentiators, Past Performances, Core Competencies, Company Data, and Points of Contact. Your CAGE codes, NAICS codes, PSC codes and other important data should be included in this document.
Can You Transfer A CAGE Code?
This is a common question we are asked after a merger or acquisition as well as when a business name changes. In short, no. A CAGE Code is not transferable from one entity to another in cases such as a merger or acquisition, but it can be with a name change. What happens to the CAGE code depends on the specific circumstances of the business change. Here’s a breakdown of different scenarios:
- Business Name Change (Same Ownership, Same Legal Entity)
If only the business name changes but the legal entity remains the same, the CAGE code can remain active. Supporting documentation (such as a business registration update) may be required.
As a side note, a business owner must update the name in SAM.gov and notify the Defense Logistics Agency (DLA) CAGE Program Office of the change. Typically, once you’ve updated this information in SAM, it automatically will send a notice to the DLA, but it is wise to check with the DLA CAGE Program Office to ensure that the change is made.
Many people mistakenly believe that notifying the DLA is only for government contracts intending to bid on DOD contracts, but DLA’s Logistics Information Services is used by all federal agencies and not just the Department of Defense.
- Mergers & Acquisitions (Change in Ownership/Legal Entity Status)
If a company with a CAGE code is acquired by another entity, the original CAGE code typically does not transfer to the new owner. The acquiring company usually needs to apply for a new CAGE code if it becomes the legal entity responsible for government contracts. The original CAGE code may be marked inactive or linked to the new company in the SAM and CAGE databases.
- Business Restructuring (Spin-Offs, Subsidiaries, Divisions)
If a business creates a subsidiary or a new division, the original CAGE code remains with the original entity. The new business must apply for its own CAGE code if it plans to bid on any government contracting jobs.
- Business Relocation
If a company moves to a new address but remains the same legal entity, the CAGE code remains the same. The business must update its address in SAM.gov, which will update the CAGE database.
Novation Agreements & Government Contracts
If you have existing government contracts, it’s important to determine if a novation agreement is necessary to transfer contract obligations to a new entity. To get started with this process, you will need to contact the procurement agent or contracting officer at the government agency with whom you have a current contract.
A novation agreement ensures that:
- The government agency is aware of and approves the contract transfer.
- The new company assumes all obligations and liabilities of the contract.
- There is no disruption in contract performance.
Novation agreements typically are required when a merger or acquisition. Additionally, if a business is sold or a division of a business that has active government contracts is sold, you will need a novation agreement. If a company restructures and changes its legal identity such as an LLC converting to a corporation, novation agreements will be needed to ensure that you can keep your government contracts.
Need A CAGE Code? Contact FCR Today
We hope this article has provided some helpful information about CAGE codes as well as the importance of SAM registration. If you would like a member of the Federal Contractor Registry team to complete your registration, simply click on the green New Registration tab on our homepage.