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ContractSpecialistTJohn

Option to Extend Procedures

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A multiple award schedule Blanket Purchase Agreement that has a Four one year options on the contract.  The contract has expired and the option was not exercised.  Would a termination for convenience letter need to be created?  My thoughts are that the option is not an obligation and no termination for convenience is required.  What procedures do you use to close out a MAS BPA where the options were not exercised.  

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Is this a good understanding of your question?....  You have an MAS BPA that has options left but the MAS contract on which the BPA was awarded has expired.

This GSA website (http://www.gsa.gov/portal/content/200549) may help.  Look at the answer under "Is there a time limit on the length of a BPA established under a GSA Schedule contract?"  You will find the answer to include the following: " An ordering activity that establishes a BPA shall conduct an annual review to determine, among other factors, whether the Schedule contract, upon which the BPA was established, is still in effect, and whether the BPA still represents the best value."  I would simply state in a brief memo to the file that a review was done prior to exercising the option and it was discovered that the GSA contract is no longer in effect and therefore the option was not exercised. 

This is also covered under FAR 8.405-3(e), Review of BPAs

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CS TJohn,  failure to exercise an option is not a termination for convenience or otherwise.  The contract simply ends.  You would close-out the contract BPA in the same way you would close-out a contract or BPA that did not contain options.

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1 hour ago, ContractSpecialistTJohn said:

The contract has expired and the option was not exercised.  Would a termination for convenience letter need to be created?

No. Reference FAR 13.303-7 - your BPA is considered "complete."

1 hour ago, ContractSpecialistTJohn said:

What procedures do you use to close out a MAS BPA where the options were not exercised.  

Are you talking about the BPA itself (which is an agreement, not a contract) or the orders issued under the BPA?  In any case, the answer to this question depends on your agency - reference FAR 4.804-1(a)(1).

Lastly, the subject for this thread is quite misleading.  You're asking questions relating to BPA Closeouts or Terminations not "Option to Extend Procedures"...

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3 hours ago, ContractSpecialistTJohn said:

Would a termination for convenience letter need to be created?

 

No, a termination for convenience is not appropriate.  Simply follow the closeout procedures in the FAR and applicable to your agency.

 

BPA

Blanket purchase agreements do not require termination because the government can simply decide not to place orders against it (BSG Constr. Servs., Inc., ENGBCA 6127, 95-1 BCA ¶ 27,250).

 

Option Not Exercised

When a contract has expired due to option not being exercised a contractor is generally not entitled to recovery when an option is not exercised (Dixon Pest Control, Inc., ASBCA 41042, 92-1 BCA ¶ 24,609; D&S Mfg. Co., Inc., ASBCA 32865, 87-1 BCA ¶ 19,351; Sierra Rock v. Regents of Univ. of Cal., EBCA C-9705223, 99-2 BCA ¶ 30,507).

 

Although not directly related to the OP (IDIQ)

When the required minimum quantity under and indefinite delivery/indefinite quantity contract has been ordered a termination for convenience is not applicable (J. Cooper & Assocs., Inc. v. United States, 53 Fed. Ck, 8 (2002), aff’d, 65 Fed. Appx. 731 (Fed. Cir. 2003). 

 

Source: Administration of Government Contracts, 4th Ed, Cibinic, Nash, and Nagle.

 

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