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43 Procurement Law. 1 (2007-2008)

handle is hein.journals/procurlw43 and id is 1 raw text is: A Government Contract and Bankruptcy Law Conundrum: Interpretation of the Anti-Assignment Act and Related Matters By PERRY COCKERELL AND ROBERT A. BAEmu Perry Cockerell Robert A. Bartlett The Constitution gives Congress the power to establish uniform Laws on the subject of Bankruptcies throughout the United States.' When it comes to the application of the Anti-Assignment Act' in bankruptcy reorganization proceedings,3 however, this paramount goal of uniformity does not exist. Rather, a fundamental schism has devel- oped among the various federal circuit courts regarding the impact of the Anti-Assignment Act on the process by which a government contractor in financial straits seeks to reorganize or restructure its business operations for the benefit of itself and its creditors. In some circuits, the Anti-Assignment Act has been interpreted to mean that the filing of a bankruptcy reorganization by a contractor will effectively result in the immediate termination of its Perry Cockerell is a partner with Cantey Hanger LLP in Dallas, Texas; Robert A. Bartlett is a partner with McKenna Long & Aldridge LLP in Atlanta, Georgia. federal government contracts. In other circuits, the Act has been interpreted in less draconian fashion to allow the contractor to continue performance of its federal govern- ment contracts conditionally during the course of its reor- ganization-but with no assurance that those contracts will survive the reorganization. It is our view that both of these lines of cases result from a fundamental misunderstanding and misinterpreta- tion of the Anti-Assignment Act and its interplay with the provisions of the Bankruptcy Code that govern the ability of a debtor to continue the performance of its exist- ing contracts during the course of its reorganization,4 and allow a debtor to assume, and, if applicable, assign its existing contracts as part of its reorganization.5 In accepting or failing to reject the concept that the Anti-Assignment Act is applicable law that would excuse the federal government from accepting perfor- mance under a government contract from anyone other than the debtor or debtor-in-possession (a debtor autho- rized to continue to conduct its business after the filing of (continued on page 13) _StCTfQN OF PURUC 6Z NTkACCT LA -,AAWR (CAN PAR'ASSQr_1ATK)rW ' Vf'_-).LUMr- 4.5, NUMWER I - FAil 2On7.

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