42.1203 Processing agreements
Source: FAR 42.1203 on acquisition.gov
FAR 42.1203 establishes detailed procedures and documentation requirements for processing novation and change-of-name agreements to ensure proper recognition of contract successors and protect Government interests.
Overview
FAR 42.1203 outlines the procedures for processing novation and change-of-name agreements when a contractor requests the Government to recognize a successor in interest or a name change. The section details the steps contractors and contracting officers must follow, including submission of written requests, information requirements, notifications, legal review, and documentation. It ensures that all affected parties are informed and that the Government’s interests are protected during contract transfers or name changes.
Key Rules
- Contractor Request
- Contractors must submit a written request to the responsible contracting officer for recognition of a successor or a name change, unless the contract falls under specific exceptions (e.g., subpart 8.7).
- Information Submission and Evaluation
- Contracting officers must request and evaluate necessary information, notify affected offices, and solicit comments or objections within 30 days.
- Government Interest Determination
- The contracting officer must determine if recognizing the successor is in the Government’s interest, considering responsibility and performance factors.
- Legal Review and Documentation
- Agreements must be reviewed by Government counsel for legal sufficiency, executed, and properly distributed and filed using Standard Form 30.
Responsibilities
- Contracting Officers: Request and evaluate information, notify affected parties, ensure legal review, execute and distribute agreements, and maintain documentation.
- Contractors: Submit written requests and required information, reference liability agreements in novation documents.
- Agencies: Oversee compliance, provide comments or objections, and ensure proper distribution of documents.
Practical Implications
- This section ensures orderly and transparent processing of contract transfers and name changes, protecting Government interests and clarifying responsibilities. Failure to follow these procedures can delay recognition of successors or name changes, potentially impacting contract performance and payment.
(a) If a contractor wishes the Government to recognize a successor in interest to its contracts or a name change, the contractor must submit a written request to the responsible contracting officer (see 42.1202). If the contractor received its contract under subpart 8.7 under 41 U.S.C. chapter 85, Committee for Purchase from People Who Are Blind or Severely Disabled, use the procedures at 8.716 instead.
(b) The responsible contracting officer shall-
(1) Identify and request that the contractor submit the information necessary to evaluate the proposed agreement for recognizing a successor in interest or a name change. This information should include the items identified in 42.1204(e) and (f) or 42.1205(a), as applicable;
(2) Notify each contract administration office and contracting office affected by a proposed agreement for recognizing a successor in interest, and provide those offices with a list of all affected contracts; and
(3) Request submission of any comments or objections to the proposed transfer within 30 days after notification. Any submission should be accompanied by supporting documentation.
(c) Upon receipt of the necessary information, the responsible contracting officer shall determine whether or not it is in the Government’s interest to recognize the proposed successor in interest on the basis of-
(1) The comments received from the affected contract administration offices and contracting offices;
(2) The proposed successor’s responsibility under subpart 9.1, Responsible Prospective Contractors; and
(3) Any factor relating to the proposed successor’s performance of contracts with the Government that the Government determines would impair the proposed successor’s ability to perform the contract satisfactorily.
(d) The execution of a novation agreement does not preclude the use of any other method available to the contracting officer to resolve any other issues related to a transfer of contractor assets, including the treatment of costs.
(e) Any separate agreement between the transferor and transferee regarding the assumption of liabilities (e.g., long-term incentive compensation plans, cost accounting standards noncompliances, environmental cleanup costs, and final overhead costs) should be referenced specifically in the novation agreement.
(f) Before novation and change-of-name agreements are executed, the responsible contracting officer shall ensure that Government counsel has reviewed them for legal sufficiency.
(g) The responsible contracting officer shall-
(1) Forward a signed copy of the executed novation or change-of-name agreement to the transferor and to the transferee; and
(2) Retain a signed copy in the case file.
(h) Following distribution of the agreement, the responsible contracting officer shall-
(1) Prepare a https://www.gsa.gov/forms-library/amendment-solicitationmodification-contract" target="_blank">Standard Form 30, Amendment of Solicitation/Modification of Contract, incorporating a summary of the agreement and attaching a complete list of contracts affected;
(2) Retain the original https://www.gsa.gov/forms-library/amendment-solicitationmodification-contract" target="_blank">Standard Form 30 with the attached list in the case file;
(3) Send a signed copy of the https://www.gsa.gov/forms-library/amendment-solicitationmodification-contract" target="_blank">Standard Form 30, with attached list to the transferor and to the transferee; and
(4) Send a copy of this https://www.gsa.gov/forms-library/amendment-solicitationmodification-contract" target="_blank">Standard Form 30 with attached list to each contract administration office or contracting office involved, which shall be responsible for further appropriate distribution.