Overview
This section establishes a clear hierarchy for determining which government official is responsible for processing and executing novation and change-of-name agreements. The responsibility is primarily determined by whether the contracts are assigned to an Administrative Contracting Officer (ACO) and which office holds the largest financial interest.
Key Rules
- ACO Priority: If any affected contracts are already assigned to an Administrative Contracting Officer (ACO), that ACO (or the Corporate ACO for multiple locations) is the lead for the agreement.
- Dollar Balance Threshold: If no ACO is assigned, responsibility falls to the contracting officer managing the largest unsettled dollar balance (defined as the sum of unbilled amounts and billed but unpaid amounts).
- Multiple Transferors: When multiple selling entities are involved, the ACO with the largest unsettled dollar balance takes the lead; if no ACO exists, the agency with the largest unsettled balance designates the responsible official.
- Centralization: The rules are designed to consolidate the administrative process under a single authority rather than requiring the contractor to negotiate with every individual contracting officer.
Practical Implications
- Streamlined Administration: Contractors undergoing a merger or acquisition only need to interface with one "lead" contracting officer, even if their contracts span multiple agencies or departments.
- Financial Risk Management: By tying responsibility to the "largest unsettled dollar balance," the FAR ensures that the agency with the most significant financial exposure oversees the legal transfer of contract obligations.