FAR 42.1202—Responsibility for executing agreements.
Plain-English Summary
FAR 42.1202 tells the Government how to decide which contracting officer is responsible for processing and executing novation agreements and change-of-name agreements when a contractor’s business changes hands or its legal name changes. The section covers three decision paths: first, when affected contracts are already assigned to an administrative contracting officer (ACO); second, when no affected contracts are assigned to an ACO; and third, when there are multiple transferors involved in the same transaction. It also introduces the key concept of the “largest unsettled dollar balance,” meaning the combined unbilled amount plus billed-but-unpaid amount, as the fallback measure for choosing the responsible contracting officer. In practice, this rule is about administrative control and efficiency: it ensures one Government official is clearly accountable for reviewing the transaction, coordinating the required documentation, and executing the agreement. For contractors, it matters because the wrong point of contact can delay novation or name-change processing, which can affect payment, contract administration, and continuity of performance. For agencies, it helps avoid duplicate reviews and conflicting decisions across multiple contracts or organizational units.
Key Rules
ACO controls if assigned
If any affected contracts are already assigned to an ACO, that ACO is generally the responsible contracting officer for the novation or change-of-name agreement. This ties responsibility to the official already administering the contracts.
Corporate-office ACO exception
If the affected contracts are spread across more than one plant or division of the transferor, the responsible contracting officer is the ACO responsible for the corporate office. This centralizes responsibility when the transaction affects multiple parts of the contractor’s organization.
Largest unsettled balance fallback
If none of the affected contracts are assigned to an ACO, the responsible contracting officer is the one handling the largest unsettled dollar balance of the transferor’s contracts. The unsettled balance includes both unbilled amounts and billed-but-unpaid amounts.
Multiple transferors rule
When more than one transferor is involved, the responsible contracting officer is the ACO administering the largest unsettled dollar balance. This ensures one lead official is selected based on the largest Government exposure.
Agency designation if no ACO
If multiple transferors are involved and none of the affected contracts are assigned to an ACO, the contracting officer or ACO designated by the agency with the largest unsettled dollar balance becomes responsible. This gives the agency a formal way to assign the lead official.
Responsibilities
Contracting Officer
Determine which contracting officer is responsible for processing and executing the novation or change-of-name agreement using the hierarchy in this section. The contracting officer selected under these rules must coordinate the review, execution, and administrative handling of the agreement.
Administrative Contracting Officer (ACO)
Serve as the responsible contracting officer when affected contracts are assigned to that ACO, or when the ACO responsible for the corporate office is the proper lead under the multi-plant or multi-division rule. The ACO must manage the agreement for the contracts under its administration.
Agency
If no affected contracts are assigned to an ACO and multiple transferors are involved, designate the contracting officer or ACO responsible for the transaction when required by the largest unsettled balance rule. The agency must ensure a clear lead official is identified.
Transferor
Provide the information needed to identify affected contracts, including which contracts are assigned to an ACO and the amounts needed to calculate the largest unsettled dollar balance. The transferor must support the Government’s determination of the responsible contracting officer.
Practical Implications
This section is mainly an internal Government assignment rule, but it directly affects how fast a novation or name change gets processed. Contractors should identify the correct lead contracting officer early to avoid delays.
The biggest practical pitfall is assuming the local contracting officer for one contract is automatically the right official. The actual responsible official may be an ACO, a corporate-office ACO, or the office handling the largest unsettled balance.
Calculating the largest unsettled dollar balance correctly matters. Parties should include both unbilled amounts and billed-but-unpaid amounts, because leaving out either can point the transaction to the wrong office.
When multiple transferors are involved, the lead official is not chosen by convenience; it is tied to the largest unsettled balance and, if applicable, agency designation. This can require coordination across several contracts and agencies.
For contractors, the practical takeaway is to gather a complete contract list, identify ACO assignments, and prepare balance data before submitting the novation or change-of-name package. Doing so reduces back-and-forth and helps the Government route the action correctly the first time.
Official Regulatory Text
The contracting officer responsible for processing and executing novation and change-of-name agreements shall be determined as follows: (a) If any of the affected contracts held by the transferor have been assigned to an administrative contracting officer (ACO) (see 2.1 and 42.202 ), the responsible contracting officer shall be- (1) This ACO; or (2) The ACO responsible for the corporate office, if affected contracts are in more than one plant or division of the transferor. (b) If none of the affected contracts held by the transferor have been assigned to an ACO, the contracting officer responsible for the largest unsettled (unbilled plus billed but unpaid) dollar balance of contracts shall be the responsible contracting officer. (c) If several transferors are involved, the responsible contracting officer shall be- (1) The ACO administering the largest unsettled dollar balance; or (2) The contracting officer (or ACO) designated by the agency having the largest unsettled dollar balance, if none of the affected contracts have been assigned to an ACO.