Option Exercise Likelihood

[earbinov]

I've spent hours searching for some form of an answer to the forthcoming question, and I haven't been able to find a single thread, blog post, article, or other artifact which touches upon this: 

Broadly speaking, what is the likelihood of the Government exercising an option period for contracts that have option period? For the sake of simplicity, let's say that we're only talking about service contracts, and so I'm referring to options vis-a-vis FAR 52.217-9 (as opposed to option quantities or extending services a la FAR 52.217-8, etc.). 

I'm a former Contract Specialist and in my own experience, I saw that in the vast majority of cases, if there was an option period in play, it was exercised. I only spent about two years in the role, so my experience is admittedly limited, so I'm curious to hear from the perspectives of others who have been in this industry a while. 

If you were to hazard a guess as to the % likelihood that any given option would be exercised, what would you guess - 75%? 85%? 90% or more? Curious to people's thoughts on this. 

[Guest Vern Edwards]

Given good performance by the contractor, good relations with government officials, a continuing need for the same service, continued funding, and reasonable option pricing, then I'd say the likelihood is at least 95 percent. Why wouldn't they exercise the option with those givens? Who wants to conduct a new procurement?

[policyguy]

In my experience funding was a main concern on whether or no not an option would be exercised especially if there was a Continuing Resolution.

[Gordon Shumway]

8 hours ago, Vern Edwards said:

Who wants to conduct a new procurement?

This. If the customer still needs the services, and there hasn't been a solicitation on the street for what you do, for the office you do it for, your option is probably going to get exercised. I'd say 99%...