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Novation and Change of Name

Novation and Change of Name Agreements

Novation and Change of Name Agreements, as outlined in FAR 42.12, describe the procedures necessary to request that the government recognize a name change or a successor in interest to a contract (Novation). If a GSA Schedule contractor legally changes their name, or the contractor’s assets are transferred to another entity, the contractor must notify the responsible government Contracting Officer immediately using the following procedures. A contract modification cannot be issued to recognize a Novation or Change-of-Name Agreement without submission of the required information.

Determining the agency responsible for executing your Novation or Change-of-Name:

  1. If the transferor has contracts (not task/purchase orders issued under the GSA Schedule) with other government agencies in addition to the GSA Schedule contract, the agency responsible for processing the Novation or Change-of-Name Agreement modification is the agency with the largest unsettled (unbilled plus billed but unpaid) dollar balance of contract obligations.
  1. If the largest unsettled dollar balance is from task/purchase orders utilizing a GSA Schedule contract, GSA is the agency responsible for processing the Novation or Change-of-Name Agreement modification.
  1. If the transferor has multiple GSA Schedule contracts, the Contracting Officer for the specific GSA Schedule contract with the largest unsettled task order dollar balance is the contracting officer responsible for processing the Novation or Change-of-Name Agreement modification.
  1. When a Novation or Change-of-Name Agreement has been processed by another government agency or a different GSA office and needs to be recognized for a GSA Schedule contract, submit the following:
    • A request to recognize the Novation or Change-of-Name Agreement modification processed by the other agency/GSA office.
    • A copy of the SF-30 signed by the responsible contracting officer.
    • A copy of the Novation or Change-of-Name Agreement signed by the responsible contracting officer.

Which is Appropriate: A Novation Agreement or a Change of Name Agreement?

A Change-of-Name Agreement applies when:

  • Only a change in the contractor’s name is involved
  • Contractual rights and obligations remain unaffected

A Change-of-Name Agreement is needed to:

  • Recognize a legal change of the business name
  • Recognize a legal change of the “Doing Business As” name, even if the legal business name remains unchanged

A Novation Agreement applies when:

  • Transfer of all of the contractor’s assets has occurred
  • Transfer of the entire portion of assets involved in the performance of the contract has occurred

A Novation Agreement is needed to:

  • Recognize a third party as the successor in interest to the government contract
  • Recognize the transfer of the related assets

A Novation Agreement is not needed when:

  • There is a change of ownership due to a stock purchase
  • There is no legal change in the contracting party
  • The contracting party remains in control of assets and is the party performing the contract

Novation Agreement Checklist

Required Documents:

You may not have all of these documents, but each must be addressed:

  • 3 signed originals of the Novation Agreement
    • A sample of the Novation Agreement
    • If the incorporating State does not require a corporate seal, include a statement to that effect on a separate page
  • Document describing the proposed transaction (Asset Purchase Agreement, memorandum of understanding, etc.)
    • The effective date of the transfer from this document should be reflected in the Novation Agreement paragraph (a)(2) and in the attorney opinion letter.
  • Authenticated copy of instrument effecting asset transfer (bill of sale, certificate of merger, contract, deed, court decree, etc.)
  • List of contracts affected. Must reflect:
    • Contract Number and type
    • Name and address of contracting office
    • Total dollar value
    • Approximate unpaid balance
  • Attorney opinion letters (for both transferee and transferor)
    • Must include a statement that the transfer was properly affected under the applicable state law
    • Must state the effective date of the transfer
    • Letter should be addressed to the attention of the government Contracting Officer
  • Authenticated copy of the transferee’s certificate and articles of incorporation if a corporation was formed to receive assets.
    • If the corporation was formed for a purpose other than to receive the transferor’s assets, include a statement to that effect.
  • Certified copy of Board Resolutions (for both transferee and transferor) authorizing transfer of assets
    • If either company does not have a Board of Directors, include a statement to this effect and include a copy of the appropriate company’s Articles of Incorporation to confirm that the company elected not to have a Board of Directors
  • Certified copy of Stockholder Meeting Minutes (for both transferee and transferor) approving transfer of assets
  • Balance Sheets (for both transferee and transferor)
    • Need copies that were dated both immediately before transfer and immediately after transfer
    • Include independent auditor report if available
  • Evidence of any security clearance requirements (if required)
  • Consent of sureties if bonds are used (if required)

A GSA Schedule contractor, with at least 50 full-time employees and a federal contract (or subcontract) worth more than $50,000, must maintain an Affirmative Action Program (AAP) for each of its establishments and include all employees.

Responsibility Determination

The transferee must be registered in the System for Award Management (SAM) database.

Capability to Perform

  • A copy of price list from award or subsequent modification that Transferee will use.
    • If the Transferee is planning to use a different price list, submit two copies of the new commercial catalog/price list
  • Certification that no change has occurred in the Commercial Sales Practices since the original award or subsequent modification, or
  • Complete and submit a Commercial Sales Practices Format if the commercial sales practices of the transferee are different from those of the transferor
  • If the Transferee is a large business, a commercial subcontracting plan must be submitted with the novation documents. The contract will not be novated without an approved Subcontracting Plan. Subcontracting Plan template is available in Attachment 13 to the solicitation.

Change of Name Agreement Checklist

Required Documents:

You may not have all of these documents, but each must be addressed:

  • 3 signed originals of the Change-of-Name Agreement
    • A sample of the Change of Name Agreement
    • If the incorporating State does not require a corporate seal, include a statement to that effect on a separate page
  • Authenticated document by the state effecting the name change
    • The effective date of the transfer from this document should be reflected in the Change-of-Name Agreement paragraph (a)(2) and in the attorney opinion letter.
  • Attorney opinion letters
    • Must include a statement that the transfer was properly affected under the applicable state law
    • Must state the effective date of the transfer
  • List of contracts affected. Must reflect:
    • Contract Number and type
    • Name and address of contracting office
    • Total dollar value
    • Approximate unpaid balance