Subpart 42.12
Novation and Change-of-Name Agreements
FAR Subpart 42.12 ensures government contracts remain valid and enforceable when contractors undergo ownership transfers or name changes by requiring formal novation or change-of-name agreements.
Overview
FAR Subpart 42.12 covers the procedures and requirements for handling novation and change-of-name agreements in government contracts. Novation agreements are necessary when a contractor transfers its assets or business to another entity, requiring the government to recognize the new entity as the successor in interest. Change-of-name agreements are used when a contractor changes its legal name without a change in ownership. This subpart outlines the responsibilities of contracting officers, the steps for processing these agreements, and the documentation required to ensure continuity and legal compliance in contract administration.
Key Rules
- Responsibility for Executing Agreements
- Contracting officers are responsible for executing novation and change-of-name agreements to ensure proper legal recognition of the new entity or name.
- Processing Agreements
- Specific procedures must be followed to process and approve these agreements, including verification of documentation and coordination with affected parties.
- Applicability of Novation Agreements
- Novation agreements apply when there is a transfer of assets or business, while change-of-name agreements apply only to legal name changes without ownership change.
- Agreement to Recognize Contractor’s Change of Name
- The government must formally recognize a contractor’s change of name to maintain contract validity and enforceability.
Responsibilities
- Contracting Officers: Must review, process, and execute appropriate agreements, ensuring all required documentation is obtained and legal requirements are met.
- Contractors: Must notify the government of any business transfers or name changes and provide necessary supporting documentation.
- Agencies: Oversee compliance and ensure proper contract administration during organizational changes.
Practical Implications
- This subpart ensures that contracts remain enforceable and properly administered when a contractor undergoes significant organizational changes. Failure to comply can result in contract disputes, payment delays, or loss of contract rights. Contractors and contracting officers must be diligent in timely notification, documentation, and execution of required agreements to avoid administrative and legal complications.