FAR Novation Agreement Attorneys FAR 42.1204

FAR Novation Agreement & Government Contract Novation Law Lawyers

Does Your Contract Novation Letter to the Contracting Officer Encourage Approval? Do You Have the Legal Expertise on Board to Increase Your Chances of Getting a FAR Novation Approved?

Novating Government Contracts Does Not automatically Mean Approval by the Contracting Officer. You want to avoid dangerous practices such as signed transfers and business sales agreements, and assume that the CO will simply approve the termination.

  • We Help Small, Medium and Large Businesses By Overseeing the Entire Novation Process Under FAR 42.1204
  • Avoid traps in the Anti-Assignment Clause When Novating Government Contracts
  • Does Your Company Still Maintain its Small Business Status After Buying or Selling Your Company ( these are matters we look at on a high level during the government contract law novation process)

IF YOU'RE READY TO HIRE AN ATTORNEY BOOK A CALL HERE

If you are a government contractor seeking to purchase or sell a company that performs federal contracts, developing FAR novation agreements under FAR Subpart 42.12 is one the most important things you must do.

This is true if an asset is purchased or sold. Small businesses, in particular, must understand the risks if the contract novation is not planned and followed up accordingly.

It is essential to have oversight of the moving pieces and various parties involved. The government contract novation agreement lawyers at Watson & Associates, LLC, frequently help small businesses and large defense contractors through the novation in contract process.

Watson & Associates, LLC’s FAR 42.1204 lawyers and government contract novation law firm have decades of experience helping small businesses and federal contractors to get through the novation in contract process. Our goal is to apply the legal requirements of FAR  Subpart 42.12. We help clients throughout the United States. As former government staff members, we understand the contract law novation process and concerns under federal novation contracts.

Tip: The Federal Acquisition Regulations (FAR Novation Agreements) do not mandate that the Government is obligated to approve your contract novation. The last thing you want to experience is that after substantial negotiations with the buyer or seller, the contracting officer disapproves of your novation contracts.

Do you have a government contract novation case in litigation? Having an attorney. that can sift through the issues and adequately represent you in court is critical to losing hundreds of thousands of dollars in a business sale.

When is a novation agreement required? Per federal regulations, a government contract novation is unnecessary when a contractor’s ownership changes as a result of a stock purchase, with no legal change in the contracting party, and when that contracting party remains in control of the assets and is the party performing the contract.
However, whether there is a purchase of assets or a stock purchase, there may be issues related to the change in ownership that should appropriately be addressed in a formal agreement between the contractor and the Government

FAR Novation of Contract Law Attorney Services

The purchase and sale of a company with federal government contracts can be daunting. Besides drafting the FAR novation agreement form, small businesses must consider other aspects of the sale, such as whether the sale can impact the seller under SBA affiliation rules when there is an asset purchase sale. As part of our FAR Subpart 42.1204 novation in contract law services, we  provide:

  • Management and oversight of the purchase and sale process for potential FAR violations.
  • Coordination with state attorneys involved in the buying and selling process.
  • A-Z  federal novation of contract consulting services
  • GSA novation agreement matters and settlement solutions
  • Drafting of FAR novation requirements documents
  • Filing Pre-novation Disputes Act claims against the government as the successor in interest ( Vought Aircraft Co., 95-1 BCA, r 27,421 at 136,666)

At Watson & Associates, LLC our government contract novation agreement lawyers help clients to develop and propose a more acceptable novation agreements package to the contracting officer. FAR SubPart 42.12o4 has specific FAR novation requirements for the novation of government contracts.

  • Avoid costly mistakes with asset transfers and Anti-Assignment Act violations
  • Prompt turnarounds with the federal novation of contract actions
  • A novation requires approval from the CO – it is not automatic

What Can You Do to Minimize the Possibility of the Contracting Officer’s Disapproval of the Request for Novation Contract? 

As stated before, if your novation does not fall within the purview of what is in the Government’s interest, then the CO does not have to approve your requests.  Things that you can do to increase the chances of getting approved include:

  • Keeping the CO involved in the initial stages of your negotiations with the buyer or seller. COs don’t want to be surprised with a request for approval.
  • When you submit your novation letter, you may want to explain how the transfer of your contract to the buyer or seller would arguably be in the government’s interest.
  • What past performance does the new owner have that the agency should consider?
  • Consider talking about the reduction of risk of non-performance

Potential Pitfalls in the Government Contract Novation Agreement Process Under FAR 42.1204and How to Avoid Them

 There is more to the FAR 42.1204 novation of contracts process than simply filling out forms. We help with the following:

  • Make sure that your small business status is still in place
  • Assess whether your asset purchases and transfers are really true assets in the government’s eyes (this is one area where government contract novation attorneys scrutinize your purchase and sale transactions).
  • Assuming that the contracting officer will approve and not providing for contingency if not approved.

Our federal government contract novation agreement consulting team of attorneys can help assess asset purchase sales and prepare our clients to ultimately get through the buying and selling process.

  • Understand that the contracting officer is not obligated to approve your novation agreement
  • If your company is performing with a joint venture or teaming arrangement, we help with the transfer process.

Important Points and Considerations

What is a Novation Agreement? Novation of a contract means a legal process (drafting and submitting a novation agreement) that transfers contractual rights and obligations from one contractor to another in a government contract. Under federal procurement laws, the FAR 42.12 contract FAR novation meaning in law may be somewhat different than in the commercial sector. To novate a government contract is appropriate when the party to the contract somehow assigns their obligations under a current federal contract to a new party. In government contracting, the agency refers to the new party as a successor in interest.

Novating contracts with teaming agreements and joint venture relationships?

This can be a concern of the contracting officer.  Our government contract novation consulting services look at all of these commonly overlooked issues when we represent companies involved with government novation contracts. 

The Anti-Assignment Act prohibits the sale of government contracts.

In other words, unless the responsible contracting officer decides that it is in the government’s best interest to novate a contract, then the government is not obligated to accept a novation agreement under FAR Suboart 42.12. 

  • If the only asset purchased is a government contract, there could be problems.
  • Contractors fail when the contracting officer is suspect of the actual assets sold.

When you are involved in a purchase and sale of a business, it is important to assess the possibility that option years to existing contracts may not be extended. This is a risk for the buyer of a stock purchase contract. When there is such a potential problem, the value of the sale of the business may be impacted.

What happens if the buyer’s small business status expires? Would the small business status be gone?

Generally no. The rule has been that once you were a small business at the initial bidding and award stage, then you should be fine. The transaction should not impact your status as a small business. 

Does Your Stock Purchase Sale Mean that The Government Has to Approve Your Novation FAR. Agreement Form?

When is a contract novation agreement required? Obviously, FAR 42.1204 suggests that your novation contract agreement is unnecessary when there is a change in the ownership of a contractor as a result of a stock purchase, with no legal change in the contracting party, and when that contracting party remains in control of the assets and is the party performing the contract. However, under the FAR, when you execute a stock purchase agreement, you should, by all means, seek the approval of the contracting officer ahead of time.

  • The key to any approval of a FAR novation agreement is to get the contracting officer involved as soon as possible. Arguably, if the government’s interest in jeopardy, there may be an exception.
  • Remember that approval of your agreement depends on what is in the best interest of the government.

IF YOU'RE READY TO HIRE AN ATTORNEY BOOK A CALL HERE

Contact Our FAR 42.1204  Government Contract Novation Agreement Lawyers 

For help with FAR 42.1204 government contract novation agreement requirements and improving your chances of contracting officer approval when novating a government contract, call Watson’s government contract novation FAR agreement attorneys at 1-866-601-5518 for immediate help. Speak to Theodore Watson.