Overview
This section mandates that the contract administration office proactively assess the consequences of a contractor's bankruptcy to safeguard the Government’s interests.
Key Rules
- Mandatory Action: The contract administration office is required to take "prompt action" upon learning of a contractor bankruptcy.
- Impact Assessment: The primary objective is to determine how the bankruptcy filing will specifically affect Government contracts and operations.
- Protection of Interests: The overarching goal of these actions is the mitigation of risk and the protection of the Government’s legal and financial positions.
Practical Implications
- Contracting Officers must coordinate immediately with legal counsel and financial analysts to evaluate the status of ongoing deliverables and Government-furnished property.
- Failure to act quickly may result in the Government losing its standing as a creditor or facing significant delays in critical program schedules.