When a change in ownership or a change of GSA contract name occurs, you must submit a Novation using FAR 42.1204 (e) and (f) or if submitting a Name Change you must submit paperwork to incorporate using FAR 42.1205(a).
As soon as assets have changed or name changes, the following procedures must be followed. Note: This checklist is based on this GSA document. It is provided here for general information purposes only. A more current revision may be available on the GSA website.
Here is a publicly available sample GSA Alliant Novation Contract.
Contract modifications cannot be issued for changes until the Novation or Change of Name has been approved. In addition, payment issues may arise if these actions are not done immediately upon change.
Change of Name Agreement
- Executed by Government and contractor
- Recognizes legal change of name
- Contractual rights and obligations undisturbed
- If DBA is changed and LBN remains, still need a Change of Name Agreement
- Executed by transferor, transferee, and Government
- Transferor guarantees performance
- Transferee assumes all obligations and liabilities
- Government recognizes the transfer of contract and related assets
- GSA does NOT novate other agencies contracts – only GSA contracts
Applicability of Novation Agreements
- Transfer of Government contracts to 3rd is party prohibited
- The Government can recognize 3rd party as successor in interest when
- All contractor’s assets are transferred or
- Entire portion of assets involved in performing contract transferred
A Novation is not needed when –
- A change of ownership due to stock purchase
- There is no legal change in the contracting party
- The contracting party remains in control of assets and performing the contract
- When it is not in Government’s interest to concur in transfer
The transferee will be requested to certify their business size status prior to novation.
You must be registered with CCR or ORCA (http://www.sam.gov).
The Contracting Officer must be able to determine the transferee to be a responsible contractor under the requirements of FAR 9.1 prior to the novation agreement being approved.
CHANGE OF NAME REQUIREMENTS *
_____ Three (3) Signed copies of the Change of Name Agreement
One copy of each of the following:
_____ Authenticated document by the State effecting the name change
_____ Legal Counsel opinion stating the transfer was properly effected under applicable law with an effective date
_____ List of all affected contracts and unsettled purchase orders, with the contract number and type, name and address of the contracting office
NOVATION AGREEMENT REQUIREMENT *
_____ Three (3) Signed copies of the Novation Agreement
One copy of each of the following:
_____ Document describing the proposed transaction (purchase/sale agreement, memorandum of understanding)
_____ List of contracts affected reflecting
___ Contract Number and type
___ Name and address of contracting office
___ Total dollar value
___ Approximate unpaid balance
_____ Evidence of the transferee’s capability to perform
_____ Any other relevant information requested by the CO
_____ Authenticated copy of the instrument affecting the transfer of assets (bill of sale, certificate of merger, contract, deed, agreement or court decree)
_____ Certified copy of each resolution of corporate board of directors authorizing the transfer of assets
_____ Certified copy of the minutes of each corporate party’s stockholder meeting necessary to approve the transfer of assets.
_____ Authenticated copy of the transferee’s certificate and article of incorporation if a corporation was formed to receive assets
_____ Opinion of legal counsel of transferor and transferee stating that transfer was properly effected under applicable law and the effective date of transfer
_____ Balance sheets of the transferor and transferee before and after the transfer of assets
_____ Evidence of any security clearance requirements
_____ Consent of sureties if bonds are used, or a statement from the transferor that none are required
*NOTE: You may not have all of these documents, but each must be addressed.