42.903
Solicitation provision and contract clause
Always include the Bankruptcy clause (52.242-13) in solicitations and contracts exceeding the simplified acquisition threshold to protect government interests in case of contractor bankruptcy.
Overview
FAR 42.903 requires contracting officers to include the clause at 52.242-13, Bankruptcy, in all solicitations and contracts that exceed the simplified acquisition threshold. This clause ensures that both parties are aware of their obligations and procedures in the event the contractor files for bankruptcy during contract performance. The regulation is designed to protect the government's interests and establish clear communication protocols if bankruptcy occurs.
Key Rules
- Mandatory Clause Inclusion
- The Bankruptcy clause (52.242-13) must be inserted in all solicitations and contracts above the simplified acquisition threshold.
- Threshold Application
- The requirement applies only to contracts exceeding the simplified acquisition threshold, not to smaller contracts.
Responsibilities
- Contracting Officers: Must ensure the Bankruptcy clause is included in all applicable solicitations and contracts.
- Contractors: Must comply with the requirements of the Bankruptcy clause if included in their contract.
- Agencies: Should oversee compliance with clause inclusion and monitor contractor financial status as needed.
Practical Implications
- This section exists to ensure the government is promptly notified and can take appropriate action if a contractor files for bankruptcy.
- It impacts daily contracting by requiring careful review of solicitation and contract documents for clause inclusion.
- Common pitfalls include failing to include the clause in eligible contracts, which can complicate government response to contractor bankruptcy.