| Authority/Reference(s) | |
|---|---|
| Revision Date | September 3, 2024 |
Policy
A Novation Assignment Agreement is a legal contract that transfers the contractual obligations of one party (assignor) to a third party (assignee).
This policy does not apply to open enrollment contracts, which are non-competitive with no guarantee of utilization. Changes in business entity to an open enrollment contractor will result in termination for convenience. The new business entity may submit an application for a new open enrollment contract.
Novation Assignment Agreements can be the result of a change in business entity status, such as a company merger or acquisition, or when the contractor requests to transfer an existing contract to a successor. The assignee must be willing to agree to all the terms of the existing contract. Consult with the Department of Family and Protective Services (DFPS) Legal if a Novation Assignment Agreement is appropriate.
New business formations require compliance with Legal Entities that May Contract with DFPS.
DFPS must evaluate the change in risk when completing a Novation Assignment Agreement. The proposed replacement contractor must complete an Internal Control Structure Questionnaire (ICSQ) to facilitate this evaluation.
DFPS contract management systems must reflect contractual closeout of the original agreement and creation of the new contractual agreement with its own unique contract identifier.
Note: Novation Assignment Agreements are referred to as contract reassignments by the Texas a Health and Human Services (HHS) Procurement and Contracting Services (PCS) staff. Communication between DFPS and HHS on a Novation Assignment Agreement should include that the request is for a contract reassignment.