52.242-13 Bankruptcy
Source: FAR 52.242-13 on acquisition.gov
Contractors must promptly notify the contracting officer in writing within five days if they enter bankruptcy proceedings, including specific details about the filing and affected contracts.
Overview
FAR 52.242-13, Bankruptcy, requires contractors to promptly notify the contracting officer if they enter into bankruptcy proceedings. This clause ensures that the government is informed of any bankruptcy actions that could impact contract performance or payment. The notification must be in writing, sent by certified mail or an authorized electronic method, and provided within five days of the initiation of bankruptcy proceedings. The notification must include the date of the bankruptcy filing, the court where the petition was filed, and a list of all government contracts (with contract numbers and contracting offices) for which final payment has not been made. This requirement remains in effect until final payment under the contract is completed.
Key Rules
- Notification Requirement
- Contractors must notify the contracting officer in writing within five days of entering bankruptcy proceedings.
- Notification Content
- The notification must include the filing date, court identity, and a list of all affected government contracts and offices.
- Method of Notification
- Notification must be sent by certified mail or an authorized electronic commerce method.
- Duration of Obligation
- The obligation to notify remains until final payment under the contract.
Responsibilities
- Contracting Officers: Must monitor for bankruptcy notifications and assess contract risk or necessary actions.
- Contractors: Must provide timely, complete written notification of bankruptcy proceedings as specified.
- Agencies: Should ensure compliance and maintain oversight of contracts potentially affected by bankruptcy.
Practical Implications
- This clause protects the government's interests by ensuring early awareness of contractor financial distress.
- Contractors must have procedures in place to identify and report bankruptcy events quickly.
- Failure to comply can result in contract complications or potential default actions.
As prescribed in 42.903 , insert the following clause:
Bankruptcy (July 1995)
In the event the contractor enters into proceedings relating to bankruptcy, whether voluntary or involuntary, the contractor agrees to furnish, by certified mail or electronic commerce method authorized by the contract, written notification of the bankruptcy to the contracting officer responsible for administering the contract. This notification shall be furnished within fivedays of the initiation of the proceedings relating to bankruptcy filing. This notification shall include the date on which the bankruptcy petition was filed, the identity of the court in which the bankruptcy petition was filed, and a listing of government contract numbers and contracting offices for all government contracts against which final payment has not been made. This obligation remains in effect until final payment under this contract.
(End of clause)