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FAR and DFARS › FAR Part 42: Contract Administration and Audit Services › Subpart 42.9

FAR 42.902 Procedures.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section tells agencies what to do when they learn a contractor has filed for bankruptcy. It requires them to notify the right offices, figure out how much the Government might be owed, protect the Government's money and property, and give contract details to the Government's lawyers. It matters to contractors because it means the Government will review open contracts and take steps to protect its interests during the bankruptcy.

Applies to: Agencies and contracting officers when a contractor is in bankruptcy proceedings

What it requires

  • Furnish the bankruptcy notice to legal counsel and other appropriate agency offices and affected buying activities
  • Determine the amount of the Government's potential claim against the contractor, including reviewing contracts not closed out
  • Take actions necessary to protect the Government's financial interests and safeguard Government property
  • Furnish pertinent contract information to the legal counsel representing the Government

Key terms: bankruptcy proceedings · potential claim · contracting officer · legal counsel · closed out

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

(a) When notified of bankruptcy proceedings, agencies shall, as a minimum—

(1) Furnish the notice of bankruptcy to legal counsel and other appropriate agency offices (e.g., contracting, financial, property) and affected buying activities;

(2) Determine the amount of the Government's potential claim against the contractor (in assessing this impact, identify and review any contracts that have not been closed out, including those physically completed or terminated);

(3) Take actions necessary to protect the Government's financial interests and safeguard Government property; and

(4) Furnish pertinent contract information to the legal counsel representing the Government.

(b) The contracting officer shall consult the legal counsel, whenever possible, prior to taking any action regarding the contractor's bankruptcy proceedings.

← 42.901 General. · 42.903 Solicitation provision and contract clause. →

Rule changes for FAR Part 42

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 42.902 Procedures · SpendQuery