Novation of MAS Schedule
Started by Drewj · Jul 9, 2024 · 2 replies
- DOriginal post
Drewj
Jul 9, 2024 · 1y ago
So We're trying to novate our FSS contract to a new entity and it has multiple awarded tasks. We know the general steps. I'd like to talk to someone who has been through this process so we can get a sense of how this works in practice.
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Fara Fasat
Jul 11, 2024 · 1y ago
The first step in the process is -- do you need a novation. "Do a novation' is usually the automatic response from the government whenever there is a change, but a novation is often not required. For example, if a legal entity is bought by another entity, usually in a purchase of all of its stock, but it remains the same legal entity as a subsidiary of the new owner, then a novation is not required. Look at 42.1204(b).
There are other times when a novation is not required that the FAR does not address. This is when there is a corporate merger or conversion, and the performing entity remains essentially the same. There is also a situation known as a 'statutory merger or consolidation' that may not require a novation. These are more complicated and you need to contact a lawyer to review the case law and help determine if a novation is required. Be aware that your CO may not understand these, and will just default to 'do a novation.' It may take come convincing.
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Vern Edwards
Jul 11, 2024 · 1y ago
@Drewj Novation is one of the most confusing topics in government contracting. Prepare yourself. You may get a hurricane of confusing responses to your inquiry.
The personal experiences with various agency offices of the people who are going to respond to you will likely be all over the map.
Here are some professional websites (attorneys, consultants) that might be of help. The sheer number of such websites should be taken as a hint as to how confusing the process can be—to both contractors and government personnel.
Good luck.
"Novation Agreements Under Federal Contracts"
"Novation and Recertification Requirements: A Post-Closing Guide for GovCon M&A Deals"
"More Novation Complexity In Gov’t Contracts M&A?"
https://www.insidegovernmentcontracts.com/2018/12/more-novation-complexity-in-govt-contracts-ma/
"Novation and Change of Name Agreements"
https://www.cbh.com/guide/articles/novation-and-change-of-name-agreements-guidance/
"Contract Novation Agreement: Everything You Need to Know"
https://www.upcounsel.com/contract-novation-agreement
"CAN YOU SELL A GOVERNMENT CONTRACT: ASSIGNMENT, NOVATION, CHANGE OF NAME AND ASSIGNMENT OF CLAIMS"
"Novation Agreements – Prime U.S. Government Contracts Whitepaper"
https://info.redstonegci.com/en-us/whitepaper-novation-agreements-prime-us-contracts