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Subcontractor Change of Ownership under Prime

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When a subcontractor notifies a prime of a change in ownership. What steps are required of the prime to the Govt? Is notice required? novation? or can we simply modified the approved sub to reflect the change in ownership? Do we have to get consent for the new owner/company?

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Sounds like we would have to get consent for the new owner. Related question: what if a subcontractor requests the prime to consent to assign its sub to a 3rd party. Would we have to seek approval from the Govt to assign a sub?

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What is your rationale for saying you would have to get consent for the new owner? Under FAR 52.244-2, consent to subcontract is only required when a prime intends on entering into a specific subcontract under certain conditions. A change in ownership does not necessarily change the identity of the subcontractor so that the subcontract will be with a new entity.

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awayforward:

The FAR is silent on this matter. My advice is to call the CO who granted consent and, for the sake of customer relations, explain the situation and ask what he or she wants you to do.

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Perhaps, I need to elaborate on this less than ideal situation. The change in ownership will likely involve a change in identity. Small company A performing under the IDIQ prime is a staffing company that only wants to concentrate on certain types of business (state and commercial). Company A would like to sell its federal side of the business to a separate and distinct small women owned company B that also has been approved to work under the same IDIQ prime. The principals of both companies are related but I don't think this matters, or does it (a rather typical SBA scenario?) Is the prime contractor obligated to inform the Govt that Company A sold its federal business to Company B (already approved as a subcontractor under the prime also?). Company A will remain as a corporate entity but not pursuing federal work. Clear as mud?

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Awayforward, from what you have written now, it is not the subcontract that should be of concern, but the prime contract. If I understand you correctly, the prime contractor has sold its Federal business segment. You did not say how this sale was structured. If it was an asset sale, you are possibly in novation mode in regard to the prime contract, with that contract being novated from A, the prime to B the subcontractor or a new entity if B sets up A's former segment as a new company. Further, if the prime contract was a set aside, A's former segment and B would now be affiliated. The purchase of the Federal segment would require a new size certification under FAR 52.219-28 by both A and B (and the new company if A's former segment is established that way). If B and its new affiliate are no longer small under the size standard assigned to the IDIQ contract, no further orders under the contract can be counted as awards to a small business.

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Retreadfed-

You have everything wrong. The scenario is about to small business subs. under a prime, and what notification is required by the me regarding the assignment or novation of contracts of the 1 small business sub to another small business sub. I think the solid advice is to inform the CO as a courtesy even though it is not a requirement.

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