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rios0311

Option to Extend the Term not Exercised on Time - Now What?

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My question is why is it subject to CICA? It was already competed once.

Why is it subject to CICA? The answer should be apparent. According to FAR 6.001, CICA applies to "all acquisitions" except those listed in FAR 6.001. What you want to do is an acquisition -- see the definition in FAR 2.101( b ) -- on a sole source basis. You have come up with the term "direct award" in an apparent attempt to avoid saying sole source.

Forget about the "it" that you mentioned. "It" does not exist. It never has. The thing that was competed was an option that was not exercised and cannot be exercised now. "It" -- what you want to do now, a contract for performance during the period June 25 or thereabouts through June 26 or thereabouts next year -- has not been competed.

Among the exceptions in FAR 6.001, paragraph ( c ) includes "priced options that were evaluated as part of the initial competition (see 17.207(f)), that are within the scope and under the terms of an existing contract." Need I say more? There is no existing contract. There has not been one for 45 days. Moreover, what you want to do now would not be under the terms of that contract even if it did still exist. So CICA applies. Really. It's that simple. I see no other exception in 6.001 that covers what you want to do.

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When I wrote my post #25, I was responding to Don Acquisition's post #20. I had not seen the 4 responses that followed because they had carried over into page 2.

Amthomf, yes, each POP is under the SAT. Thanks. Vern, I am in a position where I could attempt your suggestion, which is what I wanted to do, but a closer look at the contract revealed that none of the options were priced. I think there are too many issues with the contract to extend it. Since the requirement is between $15k and $25k per year, I've placed the required notice in a public place. I need to display the notice for 10 days. Once the 10 days is up I'll award a 1 year contract to the previous contractor and I'll compete a new one with options later down the line.

Vern, your feedback helps a lot. I appreciate it and I appreciate everyone elses feedback too.

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I found a GAO case that involved a case very similar to the one the OP mentioned. In Comp. Gen Decision B-219136, the National Park Service (NPS) retroactively exercised an option to extend Ticketron's contract that expired four months previously. Ticketcenter, a competitor, protested NPS' decision because it was not in compliance with CICA. The findings of the case were as follows:

“We agree with Ticketcenter that this attempt was improper. Upon expiration of Tickettron’s contract, neither the Government nor Ticketron was obligated by any of the contract terms; Ticketron no longer was bound to provide visitor reservation services, and the Government no longer was bound to pay Tickettron commissions for such services. The unexercised option provisions were part of the contract and, thus, necessarily expired when the contractual relationship was terminated. Thus, the attempted retroactive extension of Ticketron’s contract was not an extension at all. There was no contract to extend, but the noncompetitive creation of a new contractual relationship with Ticketron.”

In the OP's case, if you were to "resurrect" the expired contract option at this point, you would need to comply with CICA. You could just extend the contract and hope and pray that no one would be any the wiser, but the FAR does provide the tools for handling the situation. Whether you would get a protest is dependent on how competitive your market is and which companies are paying attention; though, in my opinion, extending the contract without any sort of justification is an ethical abandonment.

If you competed the initial term of the contract, you could extend the term of the contract through a logical follow-on long enough to recompete your requirement, see FAR 16.505(B)(2)©. However, you would need to make a sufficient argument that the extension is in the best interest of the Government in terms of economy and efficiency. I think you'd have a reasonable justification based upon the information you provided.

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Amthomf, yes, each POP is under the SAT.

a closer look at the contract revealed that none of the options were priced.

...the requirement is between $15k and $25k per year...

That would have been nice to know up front.

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Joel, my apologies for not providing sufficient information up front. I asked the question to gain knowledge on what options I might have in the future when similar situations arise, and to see if there was any way of "fixing" this contract (there isn't). I don't usually work anything this small, but it landed on my desk so I thought I'd ask.

Thanks for the GAO reference, Metteec.

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Here's my take on the notices required under option period contracts and proper exercise of options...

As far as CICA is concerned, the entire period of performance should be competed up front, right? Therefore, if something lapses in the middle due to administrative oversight, how does that affect CICA? It doesn't. It would not be a violation of CICA to either modify/exercise the option or award a new contract to complete the term of the original.

What is the intent of 52.217-9? It's to protect the government's right to unilaterally exercise the option(s). If the contractor is willing to accept bilateral exercise of an option, why would anyone believe it wasn't legal?

Further, what does it really matter if the contract has expired or is 'dead'? Of course the government is at risk during this period. However, if the contractor is willing to continue performance and accept bilateral modification to exercise the option, what law is being violated?

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What does it matter if the contract has expired or is "dead"? See Washington National Arena Limited Partnership, B-219136, 65 Comp. Gen. 25 (1985):

The record shows, as [the protester] alleges, that the original contract term was extended to January 25, 1985, by issuance of amendment 2 to the contract. While there remained options under the contract which could be exercised by NPS [the National Park Service] to extend the contract term further, neither NPS nor the record indicates that NPS ever exercised another option before the contract ended on the amended January 25, 1985, expiration date. NPS states in its report that it did extend the contract term to January 25, 1986…. NPS neglects to state in its report, however, that this modification, in the form of amendment 3 showing a January 25, 1985, effective date, was not executed by NPS and [the contractor] until June 10, 1985, more than 4 months after [the contractor’s] contract had expired. In other words, amendment 3 appears to have been an attempt by NPS to revive [the contractor’s] expired contract by retroactively extending and modifying it.

We agree with [the protester] that this attempt was improper. Upon expiration of [the contractor’s] contract, neither the government nor [the contractor] was obligated by any of the contract terms; [the contractor] no longer was bound to provide visitor reservation services, and the government no longer was bound to pay [the contractor] commissions for such services. The unexercised option provisions were part of the contract and, thus, necessarily expired when the contractual relationship was terminated. Thus, the attempted retroactive extension of [the contractor’s] contract was not an extension at all—there was no contract to extend—but the noncompetitive creation of a new contractual relationship with [the contractor].

Under CICA, agencies are required to “obtain full and open competition through the use of competitive procedures” in procuring property or services. 41 U.S.C. § 253. [Now 41 U.S.C. § 3301.] Certain exemptions from the competition requirement are listed, but it does not appear from the record, and NPS does not argue, that any of these exemptions would apply to justify a noncompetitive award to [the contractor] under the circumstances here. Consequently, we sustain the protest on the ground that NPS should have conducted a competitive procurement for these visitor reservation services. [Emphasis added.]

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Perfect reference. It's exactly what I was looking for. It answers all of my questions. Thanks Metteec and Vern.

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I don't agree either. I think there should be an exception that allows for the reinstatement (as opposed to extension) of contracts when due to an administrative error, the contract's period of performance is allowed to end prior to exercising an option. Of course, this delusion of mine would require that the contractor agrees to the reinstatement and the contract's pricing, terms and end-date all remain unchanged. I still fail to see the value in competing the action again when nothing material has changed.

I wonder if anyone will be sucessful in persuading GAO to reconsider their 1985 position. Not to reverse their findings, but to apply new rationale to future instances.

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But - for the instant situation, it appears that 1) you did not have previously evaluated competitive pricing for the option years and 2) you have some flexibilty in obtaining services for the next period because the scope of one year's services is apparently within the simplified acquisition threshold. Thus, can't you use part 13 streamlined methods to effectively "reinstate" this contractor for one year, using a new contract? Yes, you would still have to compete follow on years.

As for "an administrative error", it would seem to me that somebody didn't do their job. I just dont have the same background or perspective to accept that nobody is responsible to track or administer a contract or should know that the performance period is up or soon to be up. Responsbility should include accountability and associated consequences.

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Exactly. My question is why is it subject to CICA? It was already competed once. What value is obtained by holding an additional competition for the same exact services that, were it not for an administrative error, would be provided by the original awardee? The only period of performance that would change would be the period that should be in effect. It would be shortenend. The contract end date would not change, hence the contractor would not obtain additional work.

Thanks for trying Don. I think I'm just digging for the original intent of the Act. Was it meant to apply to situations such as the one I described? No answer required. Thanks!

Read cited GAO opine. This may help. "Where a contract for visitor reservation services has expired, the contractual relationship which existed is terminated and the issuance of an amendment 4 months after the expiration date to retroactively extend and modify the contract as if it had not expired amounts to a contract award without competition, contrary to the requirements of the Competition in Contracting Act. A protest challenging the amendment is sustained, therefore, and GAO recommends that a competitive procurement for the requirement be conducted" (65 Comp. Gen. 25 (Comp.Gen.), 25, 1985 WL 50837, 1).

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charles:

You have arrived late for dinner. The case you have quoted, Washington National Arena Limited Partnership, was previously discussed in posts #28 and #32. Yours is post #39.

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