July 21, 2016


by Tim Griggs, Skyway Operations Manager

A previous article addressed the issue of novation agreements, which involved a business’s sale or restructuring that caused a change to the business information published in the signed contract. Closely related to this concept is the much simpler process involving name changes for the prime contractor. By definition, these situations entail only the contractor’s change of name as the business entity, and comprise no constructive change to the contracted work or compensation. Part 42.12 of the Federal Acquisition Regulation (FAR) also describes the nature and process of these changes.

FAR Part 42.1202, Responsibility for Executing Agreements, covers name change procedures as well as the previously-discussed novation agreements. This section describes which particular contracting officer gets designated as the responsible contracting officer (CO), charged with preparing and signing the name change agreement. As with novation, the issue rests primarily on which CO maintains responsibility for the largest unsettled (unbilled plus billed but unpaid) dollar balance of contracts.

The processes for name changes are the same as those for novation. As described in FAR Part 42.1203, the contractor initiates the action with a written request to the responsible CO. The name change agreement amounts to a simple administrative change, but nevertheless requires a modification to the contract in order to ensure proper administration of all remaining work, invoicing and payments. The Government does not bear any risk from the result of an administrative name change, nor does this process represent any conflict of interest that may preclude the Government’s recognition of the change.

Since name changes do not affect the material nature of the contract or the consideration, FAR Part 42.1204, which specifically addresses novation agreements, does not apply to name change agreements.

However, since it involves an administrative change to the contract that affects all of the remaining work, name change agreements must be reviewed by government counsel in order to ensure legal sufficiency.

42.1205 — Agreement to Recognize Contractors Change of Name, covers instances wherein only the contractor’s name is being changed, and the Government’s and contractor’s rights and obligations remain unaffected. In these cases, the parties shall execute an agreement that reflects the name change.

The contractor shall forward to the responsible CO three signed copies of the Change-of-Name Agreement, and one copy each of the following:

(1) The document effecting the name change, authenticated by a proper official of the State having jurisdiction.

(2) The opinion of the contractor’s legal counsel stating that the change of name was properly effected under applicable law and showing the effective date.

(3) A list of all affected contracts and purchase orders remaining unsettled between the contractor and the Government, showing for each the contract number and type, and name and address of the contracting office. The CO may request the total dollar value as amended and the remaining unpaid balance for each contract.

To assist in preparing the name change agreement, Part 42.1205(b) shows a template with the necessary verbiage and signature blocks.

In conclusion, name change agreements do not materially alter the contract, but because the administrative data must be updated, the responsible CO must still sign a formal agreement that describes the subsequent administrative contract modification.

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