GSA Contract Novation

A GSA contract novation agreement is required when a firm or its key assets are sold to a third party. This is because a government contract cannot be assigned or transferred to another party without the government's permission.

When is a Novation Agreement Required?

Once assets have changed, a novation agreement must be negotiated with your contract officer. In addition to compliance issues, contract modifications cannot be approved until the novation is completed. A lack of agreement could also affect future payments on current GSA task orders.

An agreement is required when

• all of the contractor’s assets are transferred to another firm, or
• if the assets involved in performing the contract are transferred  

When is a Novation Agreement Not needed?

A novation agreement is not needed if:

• A change of ownership is due to a stock purchase 
• There is no legal change in the contracting party
• The contracting party remains in control of assets and performing the contract
• When it is not in the Government’s interest to agree to the transfer

Required Documentation for GSA Novation

Under FAR 42.1204, a typical novation package includes:

• Three signed originals of the novation agreement
• Asset transfer documents such as a bill of sale or merger certificate
• Board resolutions and stockholder meeting minutes authorizing the transfer
• Attorney opinion letters confirming the transaction’s legality and effective date
• Balance sheets for both companies before and after the transfer
• A list of affected contracts with contract numbers, values, and contracting offices
• Updated price lists and certifications, including Commercial Sales Practices and subcontracting plan if applicable.

How TurboGSA Helps with GSA Novation

TurboGSA assists contractors and their attorneys in preparing and submitting a complete GSA novation package that satisfies all FAR 42.1204 requirements.
We ensure the transferee is recognized as a responsible contractor under FAR 9.1, manage communications with GSA, and handle post-novation updates such as:

• Modifying price lists
• Updating GSA Advantage and eLibrary listings
• Ensuring a seamless transition to maintain contract eligibility and payment continuity

For expert help completing your GSA novation agreement, contact TurboGSA today.