Avoid Unnecessary Headaches with the Government Contract Novation Process.
- When Novating a Federal Contract, Increase the Chance of Business Sales Getting Contracting Officer Approval
- Avoid Violating the Anti-Assignment Act When Executing a Government Novation Contract
- Our FAR Novation Contract Law Lawyers Help Federal Contractors and Companies in ALL STATES
- Does your purchase or sale impact your small business status ? There are all important considerations for the future.
- Get a Free Initial Consultation. 1-866-601-5518.
The Federal Acquisition Regulations (FAR Novation Agreements) do not Mandate that the Government is always obliged to approve your novation agreement. The last thing you want to experience is that after substantial negotiations with the buyer or seller, the contracting officer disapproves the novation .
With law offices in Washington, DC and in Denver Colorado, At Watson & Associates, LLC experienced federal attorneys frequently help clients nationwide to navigate through the confusing process. The goal is to help make the buying or selling transition a lot smoother while satisfying the contracting officer’s needs.
Government Contract Novation Legal Representation & FAR Novation Consulting Services
- Assessment of facts involved with your purchase and sale for potential violation of government contract law
- Oversight of state attorney transactions for FAR 42.12 compliance
- Preparation of documents in compliance with FAR novation clause requirements
- A-Z Government contract novation consulting services
- GSA novation agreement matters and settlement solutions
- Help with your novation in contract documents when buying or selling a business
- Filing Pre-novation Contract 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 law lawyers help clients to develop and propose a more acceptable novation contract agreement package to the contracting officer. FAR 42.12 has specific requirements for novation of government contracts.
- Get help from beginning to end
- We work with state attorneys to make FAR novation agreement rules are in order
- Assess your case to see if and when is a novation agreement required
- Avoid costly mistakes with asset transfers and Anti-Assignment Act violations
- Prompt turnarounds when novating a contract
What Can You Do to Minimize the Possibility of the Contracting Officer’s Disapproval of Request for Novation of The 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. CO’s don’t want to be surprised with a request for approval.
- When you submit your, 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
As federal novation of contract attorneys, we help in all aspects of the contract novation process.
Novation of Government Contract & Avoid Potential Conflict of Interest?
One of the things that the CO must do when deciding whether to approve your request to novate is to assess whether there is a potential conflict of interest under FAR 9.5 clause. If there is, and it cannot be resolved, and there is a still a decision that it is in the best interest of the government to approve the novation of government contract, then you would want to submit a request for a waiver under FAR 9.503 .
Discover Potential Pitfalls in the Government Contracting Process and Avoid Them
There is more to the novation of government contracts process than simply filling out forms. We help with the following:
- Making sure that your small business status is still in place
- Assessing whether your asset purchase and transfers are really true assets in the government’s eyes (this is one area where government attorneys scrutinize your purchase and sale transactions.)
Our federal government novation consulting team of attorneys can help with the assessment of 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 agreement
Is a FAR Novation of Contract Required?
Under federal procurement laws, the FAR 42.12 contract novation meaning may be somewhat different than in the commercial sector. To novate a government contract is appropriate when the party to contract somehow assigns their obligations under a current federal contract to a new party. In government contracting, the agency refers to the new part as a successor in interest.
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 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 novation contract. When there is such a potential problem, the value of the sale of the business may be impacted.
What happens of 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 Agreement?
Obviously, FAR 42.12 suggests that your 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 stock purchase agreement, you should, by all means, seek 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.
To speak with a FAR novation consulting attorney, call Watson & Associates’ consulting team at 1-866-601-5518.
Does Your Executed Business Sales Documents Bind the Federal Government?
When you executed a buy-sell agreement or an asset purchase agreement, the executed agreement does not automatically force the contracting officer to approve the novation? The agency will only approve your private sale or purchase when it is in the best interest of the government.
- You should always include the contracting officer in the loop from the beginning. This also includes GSA novation agreements
- There are a few ways to reduce risk if the contracting officer does not approve your contract novation
Common Issues With Government Contract Novation Law
A Novation is Not just a Transfer Agreement and Purchase of Assets :One common requirement that is missed involves the transfer itself. Many government contractors may think that only an asset purchase agreement is required to demonstrate the sale/purchase of assets in a novation. However, this is not the case. Among other requirements, a copy of the instrument effecting the transfer of assets; e.g., bill of sale, certificate of merger, contract, deed, agreement, or court decree must be provided. This requirement is in addition to the actual transfer agreement / asset purchase agreement.
- You must also have a novation agreement separate from the Asset Purchase Agreement.
- Some companies make huge mistakes and may impair their small business status when they purchase part of a company.
How Does a Attorney Fit In to the Novation Process ?
Given these FAR requirements and a laundry list of other critical aspects of the novation process, a federal contract novation agreement request will be denied without the approval of an attorney through an Attorney Opinion Letter stating all requirements have been met.
When you have decide to engage in the purchase or sale of a business with federal government contracts, you want to first make sure that your asset purchase agreement meets the FAR 42.12 requirements.
In order for a government contract novation attorney to ensure all requirements are met, he or she should be involved in the drafting of such documents and ensuring throughout the buying and selling process that nothing critical is overlooked.
Problematic Oversights Are Not the Only Things Commonly Missed in Government Contract Novations
Where a novation is to a company with a particular small business designation, such as HUBZone, 8(a), woman-owned, service-disabled veteran owned etc., under §125.18(e)(1), which describe the effects of a post-award novation or merger, a procuring agency may “count the options or orders issued pursuant to the contract, from that point forward, towards its goals.
Contact Our Government Novation Contract Law Firm
For help with FAR 42.12 requirements, call Watson’s government contract novation contract law firm at 1-866-601-5518 for immediate help.