52.215-19 Notification of Ownership Changes
Source: FAR 52.215-19 on acquisition.gov
Contractors must promptly notify the ACO of ownership changes affecting asset valuation and maintain accurate, accessible asset records to ensure cost transparency and compliance.
Overview
FAR 52.215-19 requires contractors to promptly notify the Administrative Contracting Officer (ACO) in writing of any ownership changes that could affect the valuation of capitalized assets in their accounting records. The clause also mandates notification when asset valuations or other cost changes occur due to ownership changes. Contractors must maintain accurate asset records, provide access to these records, and ensure proper identification and tracking of asset values, depreciation, and amortization before and after ownership changes. Additionally, contractors must flow down the substance of this clause to applicable subcontracts as specified in FAR 15.408(k).
Key Rules
- Notification of Ownership Changes
- Contractors must notify the ACO within 30 days of becoming aware of, or anticipating, ownership changes that could impact asset valuation.
- Notification of Asset Valuation or Cost Changes
- Contractors must notify the ACO within 30 days of any asset valuation or cost changes resulting from ownership changes.
- Asset Record Maintenance
- Contractors must keep current, accurate, and complete inventory records of assets and their costs.
- Access to Records
- Contractors must provide the ACO or their representative with access to asset records upon request.
- Asset Identification and Tracking
- Contractors must accurately identify all assets, their values, depreciation, and useful lives before and after ownership changes.
- Retention of Depreciation/Amortization Schedules
- Contractors must retain and maintain schedules based on pre-ownership change asset records.
- Subcontract Flowdown
- Contractors must include this clause in all subcontracts subject to FAR 15.408(k).
Responsibilities
- Contracting Officers: Monitor contractor compliance and review notifications and asset records.
- Contractors: Notify the ACO of ownership and asset valuation changes, maintain and provide access to accurate records, and flow down requirements to applicable subcontracts.
- Agencies: Ensure oversight and enforcement of these requirements.
Practical Implications
- This clause exists to ensure transparency and accuracy in cost accounting following ownership changes, which can impact contract pricing and allowability of costs.
- Contractors must have robust processes for tracking asset changes and communicating with the ACO.
- Failure to comply can result in audit findings, questioned costs, or contract disputes.
As prescribed in 15.408(k), insert the following clause:
Notification of Ownership Changes (Oct 1997)
(a) The Contractor shall make the following notifications in writing:
(1) When the Contractor becomes aware that a change in its ownership has occurred, or is certain to occur, that could result in changes in the valuation of its capitalized assets in the accounting records, the Contractor shall notify the Administrative Contracting Officer (ACO) within 30 days.
(2) The Contractor shall also notify the ACO within 30 days whenever changes to asset valuations or any other cost changes have occurred or are certain to occur as a result of a change in ownership.
(b) The Contractor shall-
(1) Maintain current, accurate, and complete inventory records of assets and their costs;
(2) Provide the ACO or designated representative ready access to the records upon request;
(3) Ensure that all individual and grouped assets, their capitalized values, accumulated depreciation or amortization, and remaining useful lives are identified accurately before and after each of the Contractor’s ownership changes; and
(4) Retain and continue to maintain depreciation and amortization schedules based on the asset records maintained before each Contractor ownership change.
(c) The Contractor shall include the substance of this clause in all subcontracts under this contract that meet the applicability requirement of FAR 15.408(k).
(End of clause)