CBCA Opinion Provides Clarity on Anti-Assignment Act’s Murky “Operation of Law” Exception

Bass Berry & Sims – The Anti-Assignment Act, referring to both the Assignment of Contracts Act and Assignment of Claims Act, which prohibits the assignment of government contracts and claims, respectively, has had a fairly uneven applicatory history. In a recent case, the CBCA did its best to clarify the legislation’s “operation of law” exception as it relates to contractor mergers and acquisitions. The CBCA sided with the government contractor, agreeing that following a merger, the surviving entity was entitled to perform on the former entity’s contract, by “operation of law,” regardless of an alleged misrepresentation.