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  • Question

    How does a Name Change only differ from a Novation Agreement? Additionally, The CAR choices are Rerepresentations, Novation or Other Administrative Agreements. I am thinking it is a simple action for name change only versus Novation Agreement.


    Answer

    In simple terms, a Change-of-Name Agreement is needed to recognize when a contractor has a legal change of their business name. A Novation Agreement applies in a number of situations (e.g. contractor sells all or a part of the company and the contract is still ongoing). A Novation Agreement is needed to recognize a third party as the successor in interest to the Government contract and recognize the transfer of any related assets.

    Before we go further with our answer; we are going to assume that your contract is of a kind listed at DFARS 242.202(a)(i) and therefore that contract administration has been retained by the contract office that awarded the contract. If not, then the Change-of-Name agreement should be executed by the cognizant DCMA CAO ESPECIALLY if this contractor has contracts with multiple contracting organizations. Rationale: If you look at FAR 42.302(a)(28) you will see that the contracting officer normally delegates the following contract administration functions to a CAO and (28) is to process novation and change of name agreements. If the contractor does have contracts with other government organizations, ask DCMA to accomplish this action. See the link at FAR 42.203 to find your cognizant CAO (contract administration office).

    Okay, so if this is a contract that wasn’t delegated and this contractor only has this government contract or if multiple contracts they are ONLY with your office, proceed as follows:

    In your instance, you only need to execute a Change-of-Name agreement which is typically a much quicker and less intensive process. You will need to consult the FAR and DFARS; your agency FAR supplement (AFARS) does not have any additional implemental or supplemental language on chang-of-name agreements but you may have policy letters that you have to follow, so you should look into that.

    See FAR 42.1203 Processing agreements. This will give you the initial guidance and overview of what you will have to do. Notice at FAR 42.1203(h) it discusses the contract modification process for this, I’ll talk about the modification more at the end of the answer. Then see FAR 42.1205 Agreement to recognize contractor’s change of name. This will give you a suggested format for the agreement. Then you must go to DFARS 242.1203, this will send you to DFARS PGI 242.1203, follow the 10 steps in the PGI to process the agreement (it includes guidance on the distribution of the modification). DFARS PGI 242.1203(9) will send you to DFARS PGI 204.201 which gives you guidance on how you will fill out and submit the CAR (contract action report). Note: you will select the “Novation or Other Administrative Agreements” choice because this is an “other administrative agreement”.

    Therefore the modification will be an administrative modification (use block 13 B on the SF 30). Rationale is that the change of name agreement itself accomplished and documented all of the legal requirements (same would be true with the novation agreement) and all the modification is doing is changing the name on the cover page of the contract from the old name to the new name.

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