Other Forms This is a list of forms from GSA and other agencies that are frequently used by GSA employees.Visit gov to find state tax exemption forms and/or links directly to state websites.
Other Forms This is a list of forms from GSA and other agencies that are frequently used by GSA employees.Visit gov to find state tax exemption forms and/or links directly to state websites. When deemed to be in its interest, however, the Government may waive the statutory prohibitions in the Anti-Assignment Acts. Ordinarily, the Government waives such a prohibition on assignment, and thus consents to the transfer, by a contracting officer’s execution of a novation agreement. If, however, a prohibited transfer occurs without a novation, then “the original contractor remains under contractual obligation to the Government, and the contract may be terminated for reasons of default, should the original contractor not perform.” FAR 42.1204(c).
Likewise, there are federal statutes that refer to the assignability of national park contracts or leases, copyrights, trademarks, Indian contracts, oil or gas leases on public land, patents, federal pensions, social security benefits, and pay for members of the armed forces.
The federal anti assignment statutes’ intent is to protect the government.
According to 31 USCS § 3727, an assignment of any part of a claim against the United States Government may be made only after a claim is allowed, the amount of the claim is decided, and a warrant for payment of the claim has been issued.
Moreover, the assignment shall specify the warrant, must be made freely, and must be attested by 2 witnesses.
Thus, a stock purchase is a viable transaction structure for those looking to buy or sell an interest in an entity holding federal government contracts, and is unlikely to require a novation. Further, even when courts do recognize the assignment by operation of law exception to the Anti-Assignment Acts, they have not always applied the exception with a reliable degree of consistency. Ultimately, the contracting officer is given a wide range of discretion in consenting to transactions in which he or she deems that Government consent is required. Some contractors deal with the risk that the contracting officer may reject the novation request by subcontracting all of the work to the potential acquirer or to hold certain funds in escrow pending execution of the novation agreement.
Mergers, Consolidations and Reorganizations For other corporate transactions, such as mergers, consolidations, and reorganizations, the issue is much more complicated. As such, it is best for the parties to be proactive in contacting the relevant contracting officers and always address in the transaction the possibility of a delayed or adverse action.
In fact, case law has developed that excludes the need for government consent for assignments that occur by operation of law. For instance, in , the Supreme Court recognized that mergers and consolidations functioned like other assignments by operation of law: We cannot believe that Congress intended to discourage, hinder or obstruct the orderly merger or consolidation of corporations as the various states might authorize for the public interest.  “By operation of law” is simply “[t]he means by which a right or a liability is created for a party regardless of the party's actual intent.” OPERATION OF LAW, Black's Law Dictionary (10th ed.
There is no probability that the United States could suffer injury in respect of outstanding claims from such union of interests and certainly the result would not be more deleterious than would follow their passing to heirs, devisees, assignees in bankruptcy, or receivers, all of which changes of ownership have been declared without the ambit of the statute.
The Anti-Assignment Acts are made up of: (1) the Assignment of Contracts Act, which prohibits the assignment of government contracts, and (2) the Assignment of Claims Act, which prohibits the assignment of claims against the United States. Examples of such transactions include: (i) sale of assets with a provision for assuming liabilities; (ii) transfer of assets incident to a merger or corporate consolidation; and (iii) incorporation of a proprietorship or partnership, or formation of a partnership. Given the purposes of the Anti-Assignment Acts, requiring a novation for certain asset sales is fitting. Moreover, the possibility of fraud and multiple claims may exist as both the seller and the acquirer may later demand payment from the Government, without the Government fully knowing who owns the rights under the contract.
Specifically, the Assignment of Claims Act provides that an assignment of a claim against the Government may be made only after the claim is allowed, the amount of the claim is decided, and a warrant for payment has been issued. It is important to note that the regulations expressly contemplate transactions involving a transfer of all of a contractor’s assets, or all of the assets necessary to perform the contract. For instance, when government contracts are included in asset deals, the acquirer is not the original party to the agreement, and it may not have the assets or experience required to adequately perform, which is contrary to what the Government originally bargained for. Stock Purchase Another common way to structure a transaction is through the purchase of stock, partnership interest, or membership interest.