A Commercial and Government Entity (CAGE) code is a 5-character unique identifier that the government uses for a variety of purposes in awarding and administering contracts. Under new rules that took effect on November 1, 2014, government contractors owned by other entities will have to obtain and disclose the CAGE codes of their immediate and highest-level owners. In many cases, the immediate and highest-level owners of contractors are purely commercial companies and in the past have not been required to obtain CAGE codes. The new requirements apply to all immediate and highest-level owners, even those that do not perform government work. The new rules also make clear that immediate and highest-level owners that are foreign entities are not exempted from these requirements.
The new rules require a contractor to disclose its own CAGE code and also the CAGE codes of its immediate and highest-level owners (if applicable) both in the System for Award Management (SAM) and also to the Contracting Officer before award for contract actions exceeding the micro purchase threshold. The terms “immediate owner” and “highest-level owner” are defined in the new rules as follows:
Immediate owner means an entity, other than the offeror, that has direct control of the offeror. Indicators of direct control include, but are not limited to, one or more of the following: Ownership or interlocking management, identity of interests among family members, shared facilities and equipment, and the common use of employees.
Highest-level owner means the entity that owns or controls an immediate owner of the offeror, or that owns or controls one or more entities that control an immediate owner of the offeror. No entity owns or exercises control of the highest-level owner.
For companies impacted by this regulatory development, the new rules provide guidance on how to obtain a CAGE code through SAM registration and other methods.