Partially Exercise Option Year

[bob7947]

From procure:

Can you exercise an Option Year for just one month or two? Our office will run out of funding before year end.

[MBrown]

I think it would depend on the type of contract and the contract terms.

Look at the GAO decision: In the Matter of: Funding of Maintenance Contract Extending Beyond Fiscal Year, B-259274 (May 22, 1996), also referenced in GAO Red Book, Vol. II, Ch 6. This is a case where the Air Force was held not to have violated ADA or bona fide need when it funded 4 out of 12 months of an option on a severable services contract (i.e., 8 months unfunded). The contract period of performance ran 1 Sep 1994 to 31 Aug 1995. First 4 months crossed fiscal years and used FY94 funds. Additionally, Air Force put language in contract to provide that government's obligation after December 31 was contingent on the availability of funds and required notice from the Contracting Officer that funds had become available and that contractor could continue work.

With that Air Force case in mind, consider that an Option exercise under FAR 52.217-9 is typically unilateral. If you are intending to exercise your option for a lesser period than as stated in the contract, a bi-lateral modification of the option term might be warranted to avoid any claim potential.

Additionally, are you subject to a full funding policy that you need to take into consideration?

[C Culham]

If it is a service contract and FAR 52.217-8 is in the contract then it would seem the shortened extension might be entirely possible.

[procure]

Thank you. Here is another silly question... you have a service contract with Three Option Years given the following scenarios:

1. You don't have funding to exercise Option Year One

2. You will have funding to exercise Option Year Two

Is it possible not to exercise Option Year One, but to exercise Option Year Two?

[Guest Jason Lent]

http://www.wifcon.com/discussion/index.php?/topic/2070-exercising-a-future-option/

For Procure's perusal.