CSalt

My office deals primarily in FFP environmental remediation service contracts. Environmental remediation typically involves a lot of unknown factors, and unforeseen delays. So we routinely execute a lot of modifications for POP extensions. Lately, I've been requiring a more rigorous analysis from my PMs for the reasons for the delay, and finding out that frequently the delay is due to contractor rework on documents (Work Plans, etc.) necessary for the project. Recently, I recommended to my KO that a POP extension request be denied since there was no excusable delay. She said we couldn't just let the POP expire. When I asked her why not, she couldn't give me an inteligible answer or citation that I could look up. I've asked other KOs on the team, but none of them has a real answer. They just say we can't let the POP expire. The most knowledgeable of them told me "a lawyer told me once, that if the Government lets the POP expire, it effectively waives all of its rights in the contract." I had too much respect for him to tell him how silly that sounded, but it sounded pretty silly. Btw, I've never seen a contract in this office that carried Liquidated Damages, to that's not an issue. So what is the effect of letting the POP expire on a contract when there is no excusable delay?

Joel, Yes, the options are included in the solicitation and the offerors propose prices based on their costs. Thanks for your input. This is useful.

It would only be speculation. I haven't worked with T&D before, and I assume he has. Have you ever seen these types of options in FFP service contracts?

Yes, the solicitation always includes the best information the government has for the site, but that information is never perfect in these types of projects. Until you get in the ground, its just a glorified SWAG. Can you suggest a better way to handle these contingencies other than the unit-priced options we've been using? In years past, we used CPAF contracts for this type of work, but the policy pendulum has swung away from these and we're mandated to issue FFP PB contracts/CTOs for almost everything. I saw FAR 17.200( too, but further down it states "However, it does not preclude the use of options in those contracts." The passage may just be poorly written, but it seems to be saying "you can use options in service, A-E and R&D contracts, but don't worry about any of these rules." I considered telling my boss that the FAR has no opinion on how we write our options, but somehow I don't think that would put a smile on his face.

My office primarily issues FFP service contracts and CTOs for environmental studies, plans, designs, remediation and associated services. Because environmental remediation frequently results in situations where greater contamination is discovered after field work begins, our CTOs have often included Options for increased quantities of services such as excavation that read "Option for addl excavation at a unit price of $54 per cubic foot up to 5000 cubic feet" or "Option for up to 3 additional project meetings at a unit price of $500 per meeting." Our office has recently come under new management and at a recent staff meeting, the new director informed us that these types of options were not appropriate in FFP contracts since they didn't identify a specific price; and that including them effectively converted our FFP contracts into "Time and Materials" contracts. I thought that was wrong and said so and was assigned to research it. I sent him the language below from the FAR that I believe supports these options, but he wasn't fully convinced and has asked me to find examples from outside our command. Note: Part of the reason the issue came up was that some of our contracts incorrectly had options without specific limits (i.e. "additional excavation at $54 per cubic foot" with no maximum expressed) and the option was being treated as perpetually renewable by the customer. Do you see anything wrong these types of option as long as the terms are specified? And are these types of options commonly used for any other types of work. "17.204 Contracts. (a) The contract SHALL specify limits on the purchase of additional ... services, or the overall duration of the term of the contract, including any extension. (f) Contracts MAY express options for increased quantities of ... services in terms of -- (1) Percentage of specific line items, (2) Increase in specific line items; or (3) Additional numbered line items identified as the option." "17.207 Exercise of options. (f) Before exercising an option, the contracting officer SHALL make a written determination ... that exercise is in accordance with the terms of the option, the requirements of [§17.207], and Part 6*. To satisfy ... full and open competition, the option MUST have been evaluated as part of the initial competition and be exercisable at an amount specified in or reasonably determinable from the terms of the basic contract, e.g. -- (1) A specific dollar amount; (2) An amount to be determined by applying provisions (or a formula) provided in the basic contract, but NOT including renegotiation of the price for work in a fixed-price type contract;"