Evaluating pricing for six month option

[br549dewey]

Question: If the GOVT elects to use

52.217-8 -- Option to Extend Services for up to a six month extension, what approvals are needed? If the price for the six months was not previously evaluated, are we looking at posting to FBO, and a J&A?

[Guest Vern Edwards]

Yes, unless you're willing to risk a protest to the GAO. I presume that you have read this entire thread and saw the citation to Major Contracting Services in Post #23.

[br549dewey]

I think a found most of the answer. Here is an excerpt from DAU -

The way to ensure that you will evaluate options is to say so in your solicitation and then do it during the proposal evaluation process using the appropriate FAR (or agency) clauses, depending on which is appropriate for your requirement. To evaluate options is “normal” in the use of options, it would be “unusual” to include an option and not evaluate it (see FAR 52.217-3, but it can be done and there are valid reasons). When you include an option and don’t evaluate it that means you cannot exercise the option “unilaterally” later without a J&A (as noted in your background information from the GAO Case).

On the other end of options is their “exercise” which can be in the same or different fiscal year, or even at the time of award, depending on the clause used in the solicitation. When exercising an option a D&F (not to be confused with the J&A) shall be prepared, in the D&F you must state that the requirement still exists, funds are available and that the option was evaluated at the time of the award (see FAR 17.207© 1 through 5 of all the areas to be addressed in the D&F). If not evaluated (as you pointed out) it is “out of scope.” If the option is considered “Out of Scope” then a J&A is required, or you can issue ANOTHER solicitation to publicize the additional work. If the option is the best alternative it can be considered as the first proposal on the new solicitation. This is why most options are evaluated at the time of award to avoid issuance of a J&A or second solicitation. It is the Competition in Contracting Act (CICA), as implemented in the FAR, that is the problem for the government, the contractor is usually happy to accept the additional work. The Contracting Officer must avoid violations of CICA that’s the reason for the J&A or second solicitation for the “Out of Scope” work to satisfy competition requirements.

[Guest Vern Edwards]

When exercising an option a D&F (not to be confused with the J&A) shall be prepared....

That statement is incorrect. A D&F is not required in order to exercise an option. See the definition of "determination and findings" (D&F) in FAR 1.701 and read the coverage in the rest of FAR Subpart 1.7.

FAR 17.207 requires that the contracting officer make several determinations, but it does not require that he or she prepare a D&F--"a special form of written approval by an authorized official that is required by statute or regulation."

All D&Fs entail the making of determinations, but not all determinations entail the preparation of a D&F.

For examples of a requirement to prepare a D&F see FAR 16.601(d)(1) and FAR 17.502-2[c].

[C Culham]

Caveat – No D&F unless agency supplement to the FAR requires…..

From the DOLAR…..

2917.207 Exercising options.

The contracting officer must use a standardized determination and finding before exercising an option in accordance with FAR 17.207(f).

[br549dewey]

To avoid doing a J&A the price had to be evaluated prior to award. If the price was evaluated, then it should be displayed in the contract as a final, negotiated price for the six months. If not displayed because no price was agreed upon, then you are back to preparing a J&A and having to go through the unavoidable delay while the J&A goes through a long signature chain.

It is tempting to skip the J&A because you are running out of time, but you have are not 'kosher' if you try to use -8 as a "cheap trick" way to add 6 months to the contract.