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illzoni

GSA TO with Options Beyond K Period

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Situation:

PCO awarded TO to Acme Inc in February of this year with base period through 30 September and four 1-year option periods.

I was named ACO in April.

It’s now time to start the paperwork to exercise the option period beginning 1 October.

I was just notified by Acme Inc their GSA K expired 31 July and they have a new contract number under a different DUNS and Cage, as well as now being Acme LLC (a subsidiary of Acme Inc).

I’ve read references at GSA, Ask A Professor, and here at Wifcon.

GSA pretty clearly says I can’t exercise the option:

“26. Options on Orders Placed Against GSA Multiple Award Schedule (MAS) Contracts Options may be included on orders placed against GSA Multiple Award Schedule (MAS)contracts, provided that the options are clearly stated in the requirement and are evaluated as part of the ordering activity's best value determination. Such options may be exercised on GSA Schedule contract orders, provided that:

Funds are available;

The requirement covered by the option fulfills an existing government need;

Prior to exercising an option, the ordering activity ensures that it is still in the government's best interest, i.e., that the option is the most advantageous method of fulfilling the government's need, price, and other factors considered; and

The options do not extend beyond the period of the Schedule contract, including option year periods
.

The length of the order and the risk to the ordering activity could be considered as part of the overall evaluation of best value.”

(I
bolded
for emphasis)

Ask A Professor is not useful, as I could only find an old reply (2007) that didn’t apply to these circumstances well.

Here at Wifcon I found a lot of information, some of which applies very well. In particular, Those Pesky IDIQ Contracts Again (http://www.wifcon.co...2&showentry=644) addresses key issues regarding the Indefinite Delivery and Ordering clauses. However, as the pertinent basic K is expired, I don’t have access to it and can’t review those clauses and their all-important dates. I could assume from GSA’s guidance quoted/bolded above, those dates would not permit me to exercise.

I suppose since it’s a TO against a GSA contract, their rules prevail. But I’m stubborn and that doesn’t make any sense! That policy would essentially make lame ducks out of any GSA contract holders with less than the desired service contract term (often 5 years) remaining. Or is this simply a limitation of placing TOs against GSA contracts we all need to live with?

Thanks.

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It appears that you understand the rule and its application to your facts. What does the fact that you are stubborn have to do with anything? The rule merely provides that a contract is finished when it's finished, and you can't issue or extend any task orders under it when it's finished. Why do you say that the rule doesn't make sense? It may be inconvenient, but it makes perfect sense.

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But the rule doesn't necessarily make a lame duck out of a contract holder. Individual option periods are 5 years and generally the total possible period for a Schedule is 15 years. So only a lame duck if in the last available option period. Unfortunately you can find instances out there where the option was exercised even though the underlying contract had expired simply because no one checked.

In your case, when Acme Inc formed Acme LLC, did it transfer or assign any Acme Inc assets to Acme LLC? Could it do so with the contract? Would the PCO agree to it if legally possible based on the way Acme LLC was formed? Not a lawyer so no clue if it's possible but worth asking. Otherwise I guess you are stuck with using the Option to Extend Services clause (hope it's in the TO) to get yourself the time to recompete.

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I would do a quick competition among Acme and two or more other Schedule holders who you anticipate will respond. Evaluate capability, experience, past performance and price. You might have to extend Acme's order a few weeks but that's the easit and quickest thing to do.

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But the rule doesn't necessarily make a lame duck out of a contract holder. Individual option periods are 5 years and generally the total possible period for a Schedule is 15 years. So only a lame duck if in the last available option period. Unfortunately you can find instances out there where the option was exercised even though the underlying contract had expired simply because no one checked.

In your case, when Acme Inc formed Acme LLC, did it transfer or assign any Acme Inc assets to Acme LLC? Could it do so with the contract? Would the PCO agree to it if legally possible based on the way Acme LLC was formed? Not a lawyer so no clue if it's possible but worth asking. Otherwise I guess you are stuck with using the Option to Extend Services clause (hope it's in the TO) to get yourself the time to recompete.

Actually, the normal period for a Schedule contract is 20 years. A 5yr base with 3-5yr options.

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I know this is a little late, but couldn't help but chime in. Opinions galore in the area of exercising options on a TO when its GSA Contract is dead. One of the better arguments in favor of it can be seen here: http://interact.gsa.gov/wiki/options-schedule-orders. I also agree that one CAN exercise options on a TO after its GSA Contract is dead. After all, the GSA contract contains 52.216-22 INDEFINITE QUANTITY (DEVIATION I—JAN 1994) (I assume , Vern, it is an authorized deviation). Para (d) states "(d) Any order issued during the effective period of this contract and not completed within that period shall be completed by the Contractor within the time specified in the order. The contract shall govern the Contractor's and Government's rights and obligations with respect to that order to the same extent as if the order were completed during the contract's effective period." So, the question is: A Task Order "with options" is still an "order" is it not? Exercising an option is certainly not considered a NEW order right? Clearly the clause allows you to complete the order. The only gray area then is price.

If the TO options included out year pricing that followed its GSA contract out year option's prices (and that GSA contract option was never exercised OR it was exercised with lower prices), the TO's option prices (when exercised) could never be above its GSA contract's price when it (the GSA Contract) was last alive OR (if GSA Contract Option was exercised with lower prices) above its then current GSA Contract pricing. Usually (not always) if price is a significantly important factor, the TO prices will be far enough below its GSA Contract prices to not be concerned with this pricing gray area. That's enough outta me. Happy Halloween everyone!

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I know this is a little late, but couldn't help but chime in. Opinions galore in the area of exercising options on a TO when its GSA Contract is dead. One of the better arguments in favor of it can be seen here: http://interact.gsa....schedule-orders. I also agree that one CAN exercise options on a TO after its GSA Contract is dead. After all, the GSA contract contains 52.216-22 INDEFINITE QUANTITY (DEVIATION I—JAN 1994) (I assume , Vern, it is an authorized deviation). Para (d) states "(d) Any order issued during the effective period of this contract and not completed within that period shall be completed by the Contractor within the time specified in the order. The contract shall govern the Contractor's and Government's rights and obligations with respect to that order to the same extent as if the order were completed during the contract's effective period." So, the question is: A Task Order "with options" is still an "order" is it not? Exercising an option is certainly not considered a NEW order right? Clearly the clause allows you to complete the order. The only gray area then is price.

If the TO options included out year pricing that followed its GSA contract out year option's prices (and that GSA contract option was never exercised OR it was exercised with lower prices), the TO's option prices (when exercised) could never be above its GSA contract's price when it (the GSA Contract) was last alive OR (if GSA Contract Option was exercised with lower prices) above its then current GSA Contract pricing. Usually (not always) if price is a significantly important factor, the TO prices will be far enough below its GSA Contract prices to not be concerned with this pricing gray area. That's enough outta me. Happy Halloween everyone!

The passage you quoted states "Any order issued during the effective period of this contract and not completed within that period shall be completed by the Contractor within the time specified in the order." I agree that if the base period or option period is issued during the effective period of the contract then the contractor can continue performing until said period ends, even after the contract period of performance expires. However, if the contract's period of performance expired no new options can be exercised.

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The passage you quoted states "Any order issued during the effective period of this contract and not completed within that period shall be completed by the Contractor within the time specified in the order." I agree that if the base period or option period is issued during the effective period of the contract then the contractor can continue performing until said period ends, even after the contract period of performance expires. However, if the contract's period of performance expired no new options can be exercised.

I assume then you disagree with the post at http://interact.gsa.gov/wiki/options-schedule-orders, and your rationale for said disagreement?

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I don't understand why GSA has made this policy, which appears to restrict the powers set forth in FAR 52.216-22. FAR 52.216-22 clearly states that a task order's option can be exercised before the expiration of the Master IDIQ Contract, and that the completion of the period of performance of the task order with its option shall be completed "within the time specified in the [task] order" (FAR 52.216-22(d). So it is possible for a task order's options to continue on and be completed AFTER the expiration of the Master IDIQ Contract.

But the GSA MAS Desk Reference at http://www.gsa.gov/portal/category/100755 restricts this or goes against this by stating that task/delivery order's options can only be exercised provided, among other things, that:

"The [task/delivery order's] Options do not extend beyond the period of the Schedule contract, including option year periods."

What is the rationale behind this GSA policy? It appears to have no foundation or correlation the FAR. Can anyone shed light on this?

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I don't understand why GSA has made this policy, which appears to restrict the powers set forth in FAR 52.216-22. FAR 52.216-22 clearly states that a task order's option can be exercised before the expiration of the Master IDIQ Contract, and that the completion of the period of performance of the task order with its option shall be completed "within the time specified in the [task] order" (FAR 52.216-22(d). So it is possible for a task order's options to continue on and be completed AFTER the expiration of the Master IDIQ Contract.

But the GSA MAS Desk Reference at http://www.gsa.gov/portal/category/100755 restricts this or goes against this by stating that task/delivery order's options can only be exercised provided, among other things, that:

"The [task/delivery order's] Options do not extend beyond the period of the Schedule contract, including option year periods."

What is the rationale behind this GSA policy? It appears to have no foundation or correlation the FAR. Can anyone shed light on this?

Each GSA FSS contract has a potential life of 20 years. What the guide is saying is that you should not have a task order with options that go beyond the 20th year. While that is counter to the clause which we both appear to covet, one has to compromise . Otherwise one could issue a task order with a base period of one year and 40 one year options. : )

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"Otherwise one could issue a task order with a base period of one year and 40 one year options. : )"

This statement may not be accurate across the Federal acquisition landscape. In DOD, knowledge based service aquisitions can not exceed 3 years and non-knowledge based service or supply (material) acquisitions can not exceed 5 years (base and options included). This applies to orders under the GSA FSS schedule, open-market and sole source requirements. Please check with your agency guidelines.

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What is hard to understand is that we continue to get these kinds of questions despite all of the use of GSA MAS/FSS contracts over the last 20 years and all of the online information about them. Why are we still getting so many questions about options? Are people simply coming here instead of doing their own research because it's easier, or is the available information unintelligible?

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Another side-effect of this situation is that if you attempt to do a "call" on a BPA or exercise an option on a contract that is no longer active, the FPDS-NG record will reject the input. I know that back when I worked for the Army (just a few years ago), if FPDS-NG rejected the input, PD2 would not allow you to process the action.

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