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I am looking for some guidance on the best way to handle a situation of a client:  a company is considering a sale of one of its subsidiaries which is implementing Government contracts.  The process of  finding a suitor, sale and subsequent novation of existing work is likely to take a year or more.  To continue maximizing commercial value, the company obviously does not want to stop bidding on new work while this whole process is going through.  Questions:  1.  Does the company have the responsibility to disclose in its bids that it is in the process of sale to another contractor?  2. In order avoid issues down the line or the agency finding out of the sale and assigning a high risk, should the company include some information in the proposal?  3. Once the sale goes through, would the Government be willing to open the closed solicitations in order to update the proposals of the said company with new company info? 4.  If you are a CO, would you and what would you prefer to know about the possible sale?

I know there was a thread in regard to the same situation after the sale, but in this case the buyer is yet to be identified.  Many thanks in advance

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Guest Vern Edwards

I'm going to give you the best advice that I possibly can: First, this is not a good forum for those kinds of questions. Second, your client should consult an attorney with knowledge of such matters in the context of government contracting.

I can tell you that the Federal Acquisition Regulation, 48 CFR Ch. 1, does not address the matter of what an offeror should do if it is planning the sale of a subsidiary while it is preparing its offer.

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1. This is a legal question. I'm not a lawyer! But I suspect a lawyer would tell you that the company needs to disclose all facts. Right now, there is an intention to explore a future sale, but no deal. There does not seem to be even an identified buyer. Is the intent to explore a possible future sale a fact? Maybe.

2. What information could the company include at this point? Obviously, as the deal develops there will be more information; but right now? Not much. Just an intent to find a suitor and to explore a possible future sale if the price and terms are right. Seems pretty vague to me.

3 and 4. There are recent bid protests on this topic, having to do with Lockheed, SAIC, and Leidos. And those are just off the top of my head. You should research them.

Hope this helps.

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