FAR 42.900—Scope of subpart.
Plain-English Summary
FAR 42.900 is the scope statement for the bankruptcy subpart, and it tells readers what the subpart is designed to do: set policies and procedures for actions to take when a contractor enters bankruptcy-related proceedings. It specifically covers the contractor’s duty to notify the contracting officer when it files a bankruptcy petition, and it establishes minimum requirements that agencies must follow once a contractor bankruptcy occurs. In practice, this section matters because bankruptcy can affect contract performance, payment, rights in property, and the government’s ability to protect its interests, so the subpart provides an orderly framework for response. Although this section does not itself spell out every procedural step, it signals that both contractors and agencies have defined responsibilities once bankruptcy is in play. It is the gateway provision for the rest of the bankruptcy rules in FAR Subpart 42.9.
Key Rules
Bankruptcy-related procedures
This subpart governs the policies and procedures to follow when a contractor enters proceedings related to bankruptcy. It is intended to guide agency action after a bankruptcy filing, not to address unrelated financial distress.
Contractor notice duty
A contractor must notify the contracting officer when it files a petition for bankruptcy. This notice requirement is a core trigger for agency awareness and response.
Agency minimum actions
The subpart sets minimum requirements for agencies to follow if a contractor becomes bankrupt. Agencies must use the subpart as the baseline for handling the situation and protecting the government’s interests.
Responsibilities
Contractor
Notify the contracting officer upon filing a petition for bankruptcy.
Contracting Officer
Receive the contractor’s bankruptcy notice and take action consistent with the bankruptcy subpart and agency procedures.
Agency
Follow the minimum requirements established by the subpart when a contractor enters bankruptcy proceedings.
Practical Implications
A bankruptcy filing is a formal trigger event, so contractors should not assume the government will learn about it from another source.
Contracting officers need to treat bankruptcy notice as time-sensitive because it can affect performance, payments, and contract administration decisions.
Agencies should have internal procedures ready before a bankruptcy occurs, since the subpart requires minimum actions once the event happens.
A common pitfall is confusing general financial trouble with an actual bankruptcy petition; the notice requirement is tied to filing a petition.
This section is only the scope statement, so users should look to the rest of FAR Subpart 42.9 for the detailed steps and agency requirements.
Official Regulatory Text
This subpart prescribes policies and procedures regarding actions to be taken when a contractor enters into proceedings relating to bankruptcy. It establishes a requirement for the contractor to notify the contracting officer upon filing a petition for bankruptcy. It further establishes minimum requirements for agencies to follow in the event of a contractor bankruptcy.