FAR 42.1203—Processing agreements.
Plain-English Summary
FAR 42.1203 explains how the Government processes requests to recognize a successor in interest to a contract, including novation agreements and change-of-name agreements. It covers who must submit the request, what information the contracting officer must gather, how affected offices are notified, the 30-day comment and objection period, and how the Government decides whether recognition is in its interest. It also addresses the relationship between novation and other remedies for asset transfers, the need to identify separate liability-assumption agreements, legal review by Government counsel, and the post-execution distribution and contract-file documentation requirements. In practice, this section is the procedural roadmap for ensuring that a contract transfer or corporate name change is properly documented, legally sufficient, and communicated across all affected contracting and administration offices. It matters because an improper or incomplete novation process can create disputes over who is responsible for performance, payment, liabilities, and contract administration.
Key Rules
Written request required
If a contractor wants the Government to recognize a successor in interest or a name change, it must submit a written request to the responsible contracting officer. If the contract was awarded under the AbilityOne procedures in subpart 8.7, the contractor must use the special procedures in 8.716 instead.
CO gathers needed information
The contracting officer must identify what information is needed to evaluate the proposed novation or name change and request that the contractor provide it. The required information should include the items listed in FAR 42.1204(e) and (f) for novations or 42.1205(a) for name changes, as applicable.
Affected offices must be notified
For a proposed successor-in-interest agreement, the contracting officer must notify each affected contract administration office and contracting office and provide a list of all affected contracts. Those offices must be given 30 days to submit comments or objections, and any submission should include supporting documentation.
Government interest and responsibility review
After receiving the necessary information, the contracting officer must decide whether recognizing the successor is in the Government’s interest. The decision must consider comments from affected offices, the proposed successor’s responsibility under FAR subpart 9.1, and any other factor that could impair satisfactory performance.
Novation does not solve all issues
Executing a novation agreement does not prevent the contracting officer from using other available methods to resolve separate issues arising from the transfer of contractor assets, including how costs are treated.
Separate liability agreements must be identified
If the transferor and transferee have a separate agreement allocating liabilities, such as for long-term incentive compensation, CAS noncompliances, environmental cleanup, or final overhead costs, that agreement should be specifically referenced in the novation agreement.
Legal review is mandatory
Before a novation or change-of-name agreement is executed, the responsible contracting officer must ensure Government counsel has reviewed the agreement for legal sufficiency.
Post-execution distribution and file actions
After execution, the contracting officer must send signed copies of the agreement to both parties and keep a signed copy in the case file. The contracting officer must also prepare an SF 30 summarizing the agreement, attach a complete list of affected contracts, retain the original in the file, and distribute signed copies to the parties and to each involved contract administration or contracting office for further distribution.
Responsibilities
Contractor
Submit a written request to the responsible contracting officer if it wants the Government to recognize a successor in interest or a name change. Provide the information the contracting officer requests to evaluate the proposed agreement, and support any comments or objections it submits regarding the transfer.
Responsible Contracting Officer
Receive and process the request; identify and request the information needed to evaluate the proposed novation or name change; notify affected contract administration and contracting offices; request comments or objections within 30 days; evaluate whether recognition is in the Government’s interest; ensure Government counsel reviews the agreement; execute and distribute the agreement; prepare and distribute the SF 30; and maintain the required records in the case file.
Contract Administration Offices
Review the proposed transfer for its impact on administered contracts, submit comments or objections within 30 days if appropriate, and provide supporting documentation. After receiving the SF 30 and attached list, distribute the information further as needed within their offices.
Affected Contracting Offices
Review the proposed transfer for contracts under their responsibility, submit comments or objections within 30 days if appropriate, and provide supporting documentation. After receiving the SF 30 and attached list, take further appropriate distribution actions.
Government Counsel
Review the proposed novation or change-of-name agreement for legal sufficiency before execution.
Transferor
Receive a signed copy of the executed novation or change-of-name agreement and the SF 30 with the attached list of affected contracts.
Transferee
Receive a signed copy of the executed novation or change-of-name agreement and the SF 30 with the attached list of affected contracts.
Practical Implications
This section is the core workflow for corporate acquisitions, mergers, asset sales, and legal name changes that affect federal contracts, so contractors should start early and assemble complete documentation before asking for recognition.
A common pitfall is failing to identify all affected contracts and offices, which can delay review, create inconsistent administration, or leave some contracts outside the novation package.
Another frequent issue is treating a novation as a cure-all; the rule makes clear that separate asset-transfer or liability issues may still need to be handled through other contracting actions or agreements.
Contracting officers should pay close attention to responsibility and performance risk, because the Government is not required to recognize a successor if the proposed transferee raises concerns under FAR subpart 9.1 or otherwise appears unable to perform.
Documentation discipline matters: counsel review, signed copies, the SF 30, and the complete contract list all need to be in the file and distributed correctly to avoid later disputes over who holds the contract and who is responsible for administration.
Official Regulatory Text
(a) If a contractor wishes the Government to recognize a successor in interest to its contracts or a name change, the contractor must submit a written request to the responsible contracting officer (see 42.1202 ). If the contractor received its contract under subpart 8.7 under 41 U.S.C. chapter 85, Committee for Purchase from People Who Are Blind or Severely Disabled, use the procedures at 8.716 instead. (b) The responsible contracting officer shall- (1) Identify and request that the contractor submit the information necessary to evaluate the proposed agreement for recognizing a successor in interest or a name change. This information should include the items identified in 42.1204 (e) and (f) or 42.1205 (a), as applicable; (2) Notify each contract administration office and contracting office affected by a proposed agreement for recognizing a successor in interest, and provide those offices with a list of all affected contracts; and (3) Request submission of any comments or objections to the proposed transfer within 30 days after notification. Any submission should be accompanied by supporting documentation. (c) Upon receipt of the necessary information, the responsible contracting officer shall determine whether or not it is in the Government’s interest to recognize the proposed successor in interest on the basis of- (1) The comments received from the affected contract administration offices and contracting offices; (2) The proposed successor’s responsibility under subpart 9.1 , Responsible Prospective Contractors; and (3) Any factor relating to the proposed successor’s performance of contracts with the Government that the Government determines would impair the proposed successor’s ability to perform the contract satisfactorily. (d) The execution of a novation agreement does not preclude the use of any other method available to the contracting officer to resolve any other issues related to a transfer of contractor assets, including the treatment of costs. (e) Any separate agreement between the transferor and transferee regarding the assumption of liabilities ( e.g., long-term incentive compensation plans, cost accounting standards noncompliances, environmental cleanup costs, and final overhead costs) should be referenced specifically in the novation agreement. (f) Before novation and change-of-name agreements are executed, the responsible contracting officer shall ensure that Government counsel has reviewed them for legal sufficiency. (g) The responsible contracting officer shall- (1) Forward a signed copy of the executed novation or change-of-name agreement to the transferor and to the transferee; and (2) Retain a signed copy in the case file. (h) Following distribution of the agreement, the responsible contracting officer shall- (1) Prepare a Standard Form 30 , Amendment of Solicitation/Modification of Contract, incorporating a summary of the agreement and attaching a complete list of contracts affected; (2) Retain the original Standard Form 30 with the attached list in the case file; (3) Send a signed copy of the Standard Form 30 , with attached list to the transferor and to the transferee; and (4) Send a copy of this Standard Form 30 with attached list to each contract administration office or contracting office involved, which shall be responsible for further appropriate distribution.