Attachment 09-DCMA Form 1620_February2017.pdf

DCMA Form 1620 Revised February 2017 pg. 1

GUARANTY AGREEMENT

(Applicable to One or More Government Contracts)

The undersigned ___________________________________________(Guarantor’s legal name) whose principal office is located at _____________________________________

__________________________________________________ (address) for itself, its successors and assigns, hereinafter referred to as the Guarantor, hereby issues its Guaranty

Agreement to Defense Contract Management Agency, acting on behalf of the US Government, for the benefit of ____________________________________________________ (bidder or contractor’s name), doing business at __________________________________________

__________________________________________ (address of bidding entity or contractor), hereinafter called the Contractor. The undersigned Guarantor agrees to guarantee to the

Government they will provide the required resources, to include financial support, to the contractor to ensure full, complete and faithful performance of the Contractor on such contracts, according to the terms and conditions thereof and at the time and in the manner provided therein.

In consideration for the Government taking the following action (i.e. award of contract; novation of existing contract; contract financing; granting debt deferment; foregoing financial information on the contractor in conjunction with existing contracts)____________

_______________, the undersigned Guarantor agrees as follows:

1. Guaranty. The Guarantor absolutely guarantees the full, complete and faithful performance by the Contractor of such contracts, as such contracts may be from time to time amended as authorized by its terms, according to the terms and conditions of such contract as so amended, and at the time and in the manner provided therein. The Guarantor agrees to provide the Contractor all necessary and required resources including financing, which are necessary to assure the full, complete and satisfactory performance of such contract.

2. Extension of Time of Performance. Any extension of the time of performance of such contract as so amended shall not release the undersigned Guarantor from liability hereon.

3. Assignment. This instrument shall bind the undersigned Guarantor, its successors and assigns. If any person, firm, corporation, or entity (a “Successor”) other than the prospective contractor becomes obligated to perform the contract, or any part thereof, as a result of a novation of the Contracts or under operation of law, the rights and obligations of the Government and the Guarantor shall remain in effect. If the Successor provides a guaranty which protects the Government’s interests with respect to the assigned

Contracts, the Government will seek to enforce this Guaranty only if, and to the extent, it is unable to enforce the guaranty of the Successor.

4. Default. In the event of termination for default under the terms of covered contract, or in the event of failure, insolvency, default, bankruptcy, arrangement, appoint of receiver of the Contractor or other liquidation of the Contractor, the Guaranty herein shall become absolute.

DCMA Form 1620 Revised February 2017 pg. 2

5. Waiver of Notice. The Guarantor waives notice of default on the part of the Contractor and agrees that its Guaranty shall become absolute without necessity for the giving of such notice.

6. Continuation of Guaranty. Subject to paragraph #10 hereof, the Guaranty herein shall continue until full, complete and faithful performance of such contract(s) as it may be from time to time amended as authorized by its terms.

7. Default Liability. In the event that the Government terminates a Contract for default and awards the uncompleted portion of such contract to another source at a fair and reasonable price, the Guarantor shall be liable for any excess costs incurred by the

Government as a result of such procurement and for the repayment of any unrecouped payments (e.g., partial payments, Progress Payments, or Advance Payments) paid to the

Contractor by the Government. In addition, the Guarantor shall be liable for all costs and expenses paid or incurred by the Government in enforcing this Guaranty. The Contracting Officer representing the Government in connection with such contract shall determine the total costs and expenses, if any, incurred by the Government.

8. Enforcement. This Guaranty Agreement shall inure to the benefit of and may be enforced by the Government. This Guaranty shall be construed and interpreted in accordance with the substantive laws of the United States of America. If Guarantor is a non-US entity, by the execution of this Guaranty, the Guarantor expressly agrees to waive any rights to invoke the jurisdiction of their local national courts and agrees to accept the exclusive jurisdiction of the United States Armed Services Board of Contract Appeals and/or the

United States Court of Federal Claims for the hearing and determination of enforcement and any and all disputes that may arise under this Guaranty.

9. Construction. Nothing in this Guaranty Agreement shall be construed to obligate the Government to take any aforementioned action as it pertains to the Contractor.

10. Coverage, Termination, Waiver, and Expiration.

a. The following contracts are covered by this guaranty (initial, as applicable. Mark “N/A” for those not applicable):

1) This Agreement applies to all contracts already in existence between the Contractor and the Government on or before the Agreement date

_____ 2) This Agreement applies only to the following solicitation(s) and/or contract(s): _______

_____ 3) This Agreement applies to all solicitations and/or contracts entered into on or after the date of the Agreement.

_____ 4) This Agreement applies only to Debt Deferment requests on the following contract(s) and/or debt identified in Demand Letter(s) or Contracting Officer’s Final Decision(s) dated:

DCMA Form 1620 Revised February 2017 pg. 3

b. The Guaranty Agreement is a continuing guaranty and shall remain in full force and effect until the later of (1) the performance in full of the guaranteed obligations, or under the guaranteed contracts. (2) the termination of all continuing obligations and commitments of the Contractor under the guaranteed contracts. In the case of termination of the continuing commitments of the Contractor on any guaranteed contract, the termination notices must be given in writing citing the affected contracts.

c. In the event that all of the contracts covered by this Guaranty Agreement have been satisfactorily completed by the Contractor including all continuing commitments of the Contractor under the contracts, the Guarantor may request the cognizant Government Contracting Officer for this Guaranty Agreement to issue a written notice which states that this Guaranty Agreement is considered to have expired.

d. Failure on the Government’s part to acknowledge this Guaranty has no effect on its legal status -- the Guaranty is binding and enforceable upon delivery to the US Government.

Executed on ____________________ [date].

On behalf of: ______________________________________________ (Guarantor name)

By _____________________________________

(Signature)

(Printed Name & Title)

(Business Address)

Witness _______________________________ ___________________________ (printed name and title)

Witness _______________________________ __________________________ (printed name and title)

If the Guarantor is a corporate entity, complete the following:

I, ________________________________________________________, certify that I am a duly appointed Secretary of the Corporation named as Guarantor herein; that __________________ who signed this Agreement on behalf of the Guarantor, was then ________________________

(identify position title) of said Corporation; and that said Agreement was duly signed for and on behalf of said Corporation by authority of its governing body, and is within the scope of its corporate powers.

DCMA Form 1620 Revised February 2017 pg. 4

{Corporate Seal, if applicable}

(signature)

Receipt of a copy of the above Guaranty Agreement is acknowledged.

THE UNITED STATES OF AMERICA

By ______________________________________

(signature)

(Printed name of Government official accepting the Guaranty)

(address of Government official)

DCMA Form 1620 Revised February 2017 pg. 5

INSTRUCTIONS

This form can be used for either business guarantors or personal guarantors and for US entities or non- US entities. It can be modified to reflect the identity and relationship of the parties. The substantive parts (Paragraphs 1-10) should not be modified without review by DCMA General Counsel (GC).

Preamble portion –

In this portion, the guarantor needs to identify themselves, who they are issuing a guaranty for, and for what reason the guaranty is being proffered. The blank lines in the preamble section allow for all of these matters to be addressed.

Paragraph 10 –

This is the next section which requires modification. The guarantor selects each applicable choice by initialing next to it and indicating which ones are not applicable by placing “N/A” in the line preceding the statement. More than one option may be applicable.

So let’s look at each statement more in depth:

1) This Agreement applies to all contracts already in existence between the Contractor and the Government on or before the Agreement date

If the guarantor initials this statement, it means that the guaranty applies to ALL contracts already in existence. This would be the desirable choice if the guaranty is not intended to cover any future contracts.

This would be a common choice in novation reviews, debt deferments, contract financing reviews. It is not anticipated that this would be the only selection when conducting a pre-award analysis since this language would not address contracts entered into after the date of the Guaranty.

2) This Agreement applies only to the following solicitation(s) and/or contract(s):

By initialing only this choice, the guarantor is limiting their guaranty to the solicitation/contract numbers specifically listed in blank space. This would appropriately be used if the guarantor is seeking to only guaranty specific solicitations/contracts. Though possible to see this choice in almost any situation where a guaranty is sought, it will be most common in the pre-award guaranty situation.

3) This Agreement applies to all solicitations and/or contracts entered into on or after the date of the Agreement.

By choosing this option, the guarantor is indicating that they want to guaranty any solicitations/contracts that the named contractor will enter into from the date of signing forward. This choice would be most common in the case of a contractor who is doing ongoing business with the government and a parent company wants to guaranty their performance from this point forward. This would also be an appropriate selection in a pre-award situation, though not necessary. It would also be common in a contract financing situation.

4) This Agreement applies only to Debt Deferment requests on the following contract(s) and/or debt identified in Demand Letter(s) or Contracting Officer’s Final Decision(s) dated:

This option would be used when the only thing being considered is a debt deferment package. When a contractor requests a debt deferment, the cognizant contracting officer must determine whether it is in the government’s best interest to grant such a deferment, pending outcome of a dispute. The two considerations are 1) will requiring a contractor to pay at this time cause a significant financial hardship on the contractor, potentially damaging the industrial base for the government, or 2) if we grant the deferment, DCMA Form 1620 Revised February 2017 pg. 6 will the contractor still be viable at the time of dispute resolution in order for the government to collect. The guaranty could be sought if the contractor’s financials are unavailable or if they indicate a concern for any of the aforementioned considerations. The guaranty would then allow the government to consider the debt deferment request with the confidence they will be able to collect the amounts due at a future date.

Other miscellaneous considerations –

Corporate Seals – if the guarantor is a corporation and uses a corporate seal, they should “seal” the document. If not, remove the placeholder.

Acknowledgement by the Government – the Guaranty is legally binding once the Guarantor signs it.

Failure by Government official to acknowledge receipt of the document does not alter the enforceability of the Guaranty. While the signature of a Contracting Officer is preferred, any Government employee can acknowledge receipt.