Overview
This section prescribes the formal procedures a Contracting Officer (CO) must follow to evaluate and execute agreements for recognizing a successor in interest (novation) or a contractor name change. It establishes the administrative workflow, from the initial contractor request through legal review and the final distribution of contract modifications.
Key Rules
- Submission Requirements: Contractors must submit a written request and specific supporting documentation (per FAR 42.1204 or 42.1205) to the responsible CO.
- Internal Notification: The CO must notify all affected contract administration and contracting offices, providing them 30 days to submit comments or objections regarding the proposed transfer.
- Evaluation Criteria: The Government determines if the agreement is in its best interest based on office comments, the successor's "responsibility" (per FAR Subpart 9.1), and any factors that might impair contract performance.
- Liability Referencing: Any separate agreements regarding the assumption of specific liabilities—such as Cost Accounting Standards (CAS) noncompliances, environmental costs, or overhead—must be explicitly referenced in the novation agreement.
- Legal Review: Before execution, all novation and change-of-name agreements must be reviewed by Government counsel for legal sufficiency.
- Formal Documentation: The process is finalized by preparing a Standard Form 30 (SF 30) to modify all affected contracts, incorporating a summary of the agreement and a complete list of impacted contracts.
Practical Implications
- Not an Automatic Right: The Government is not required to recognize a successor in interest; contractors must actively prove that the transfer is in the Government's interest and that the successor is a responsible entity.
- Administrative Lead Time: Contractors should factor in the mandatory 30-day internal government comment period and the time required for legal counsel review when planning corporate restructuring or acquisitions.
- Comprehensive Coverage: A single SF 30 modification is used to update the entire portfolio of affected contracts, ensuring consistency across various agencies and buying activities.