Overview
This subpart outlines the mandatory policies and procedures for government agencies and contractors to follow when a contractor enters bankruptcy proceedings. It specifically focuses on notification requirements and the minimum administrative steps agencies must take to manage the associated risks.
Key Rules
- Notification Requirement: Contractors are legally required to notify the contracting officer (CO) as soon as they file a petition for bankruptcy.
- Agency Compliance: The subpart establishes the baseline actions that federal agencies must implement to handle contract management during a bankruptcy event.
- Scope of Application: These rules apply specifically to proceedings under Title 11 of the United States Code (Bankruptcy) or similar legal proceedings.
Practical Implications
- Risk Mitigation: Early notification allows the government to assess the impact on ongoing projects, protect government-furnished property, and coordinate with legal counsel regarding the automatic stay.
- Administrative Readiness: Agencies must have protocols in place to respond to bankruptcy filings to ensure continuity of operations or to initiate contract termination if necessary.