Whay Law Firm Helps Contractors Obtain Approval in Contract Novations
The Whay Law Firm is a full-service government contracts law firm dedicated to providing outstanding legal service to businesses whose government contracts are subject to a transfer of the business. Whay Law Firm’s lawyers and trusted advisors have the necessary experience with the contract novation rules set out in FAR 42.1204 to provide your business with the best possible outcome.
Transferring A Government Contract To A Third Party
The Anti-Assignment Act prohibits the transfer of government contracts to a third party. However, in certain situations the Government may consent to such a transfer. The contractor must know under what circumstances a Novation Agreement is required, and he or she must carefully and completely follow the Federal Acquisition Regulation (FAR) rules for contract novation.
When is a Contract Novation Agreement Needed?
When a third party’s interest in a contract arises from a transfer of all the contractor’s assets, or the entire portion of the contractor’s assets that are involved in performing the contract, a Novation Agreement may be required. the Government must consent to the transfer. Even a merger/acquisition or change in ownership through a stock purchase could be cause for a contract novation. Contractors should always consult an experienced government bid lawyer for assistance.
The "Novation Package”
A Novation Package must be submitted to the contracting officer (CO). The required contents of the package includes, but is not limited to:
- The proposed novation agreement
- Documents that describe and authenticate the transfer of the business
- List of the affected contracts with details
- Evidence of the transferee’s capability to perform and appropriate corporate approvals
- Financial statements
- Evidence of security clearance
The novation process should be started as early in the transfer process as possible, beginning with expert legal advice from an experienced and trusted law firm. At Whay Law in Washington DC, we begin working for you immediately. When a transaction closes, we will help contractors determine if a novation(s) is necessary and guide clients through the complex process of obtaining approval. If your firm is anticipating a purchase, merger/ acquisition or transfer, contact Whay Law Firm today.
