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Option Period per 52.217-9


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14 hours ago, Guardian said:

As a CO, I think the safest bet is to have it signed by both parties and forego the authority of 52.217-9.

Safe?  Or are you giving up Government rights already established in the contract?  If you’re giving up rights, what are you receiving as consideration in return from the contractor?  What authority do you have to give away something that already belongs to the Government?

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3 hours ago, Retreadfed said:

Have what signed by both parties?

The contract modification extending the term of the contract, thereby obligating funds for nine of the ten CLINs associated with the upcoming one-year performance period.

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Guardian,

If you are as certain of your position as you say you are, you should exercise the nine CLINs unilaterally.  

Do you want the contractor to sign the modification to show that it concurs with the non-exercise of the tenth CLIN?  In essence, then, you would be re-negotiating the option to delete the tenth CLIN while leaving the others unchanged.

But if you are as certain in your position as you say you are, you don’t need the contractor’s signature to exercise only nine of the option two CLINs.

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4 hours ago, Retreadfed said:

Aren't you still exercising an option? 

Base on the definition of an option under FAR 2.101 that Jamaal so appropriately drew our attention to, I would say no--

"'Option'" means a unilateral right [emphasis added] in a contract by which, for a specified time, the Government may elect to purchase additional supplies or services called for by the contract, or may elect to extend the term of the contract.

if we are now seeking the contractor's signature, I would contend it's no longer an "option" under the FAR's definition.

2 hours ago, ji20874 said:

If you are as certain of your position as you say you are, you should exercise the nine CLINs unilaterally. 

If you go back and re-read what I wrote, you will find that I am not that certain.  I am not sure why are saying this.  I have been consistent throughout this thread and simply never said that.

Guardian said:  "If I had a definite unwavering answer, I would not have brought it to WIFCon."

The whole point of me starting this thread was to get answers, not promote any one assertion.  I think I, as well as others, including yourself, have insinuated that this issue might present more than one solution, with no single one necessarily being the unquestionably right way to proceed.

2 hours ago, ji20874 said:

Do you want the contractor to sign the modification to show that it concurs with the non-exercise of the tenth CLIN? 

Yes. 

2 hours ago, ji20874 said:

In essence, then, you would be re-negotiating the option to delete the tenth CLIN while leaving the others unchanged.

No, as I stated to Retread above, by issuing the mod bilaterally, I am no longer exercising an option, which per se is a unilateral action.  Why would you have to delete the unexercised CLIN?  It can remain in the contract.  By the contract's very terms, the Government never beared any obligation to exercise it.  If a CO wants to delete it perhaps because its existence somehow screws up its local accounting system, then sure, go ahead and delete it.

7 hours ago, jwomack said:

Safe?  Or are you giving up Government rights already established in the contract?  If you’re giving up rights, what are you receiving as consideration in return from the contractor?  What authority do you have to give away something that already belongs to the Government?

Yes, safe.  If the contractor signs off on it, then there is no question of an impending dispute.  Sure, in a sense we are relinquishing our unilateral right to exercise that one option.  However, we are not thereby removing the clause 52.217-9 and our ability to exercise subsequent options under the unilateral authority provided for by that clause.  What is the agency getting in return?  How about peace of mind, knowing that a dispute over its not having exercised one of the CLINs isn't waiting around the corner?   What else would you want as a CO or do you think the Government might deserve?  What authority, you ask, do I have to "give away something that already belongs to the Government"?  Well, let's see--according to several of my attorney friends who I meet with weekly as part of my professional group, I have quite a bit of discretion to do this among other things under my certificate of appointment.  COs often have more than one way to proceed with a particular contract action.

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Hey, everybody, see this thread from 2011. 

It may be that the parties could agree to bilaterally add the option year at a reduced scope, if it wouldn’t affect the original competition. 17.207 (f) is addressing the scope of the competition among other aspects. Your situation involves a change to or partial termination of the option year services, which were likely described as 10 specific CLINs with a total price for the option years. You don’t know if the CLIN to be deleted would impact the price of the remaining work. 

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10 hours ago, Guardian said:

Sure, in a sense we are relinquishing our unilateral right to exercise that one option....What is the agency getting in return?  How about peace of mind, knowing that a dispute over its not having exercised one of the CLINs isn't waiting around the corner?

Gaining “peace of mind” due to ineptness, i.e., the inability to properly interpret how options work, does not equate to the Government receiving consideration.

 

10 hours ago, Guardian said:

What authority, you ask, do I have to "give away something that already belongs to the Government"?  Well, let's see--according to several of my attorney friends who I meet with weekly as part of my professional group, I have quite a bit of discretion to do this among other things under my certificate of appointment. 

You need new attorney friends and a better professional group if this is the advice they're giving you.

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16 hours ago, Guardian said:

Base on the definition of an option under FAR 2.101 that Jamaal so appropriately drew our attention to, I would say no

If you are not exercising an option, is the acquisition of the additional services you require a new procurement?

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1 hour ago, Retreadfed said:

If you are not exercising an option, is the acquisition of the additional services you require a new procurement?

If a reasonable, prudent person considers it out of scope :).

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10 hours ago, Retreadfed said:

If you are not exercising an option, is the acquisition of the additional services you require a new procurement?

 

9 hours ago, Guardian said:

If a reasonable, prudent person considers it out of scope :).

 

11 hours ago, PepeTheFrog said:

*deleted the whole thing, PepeTheFrog responded to the wrong question because this thread and OP is incoherent*

 

Apparently nobody read Vern Edwards comment in the thread I referenced above. He basically explained how you can bilaterally descope  the option and how it should (not) affect the scope of the competition.  That is what 17.207(f) is concerned about. 

Edited by joel hoffman
Editorial Correction: Added the word “not” in front of “affect”
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46 minutes ago, Guardian said:

If a reasonable, prudent person considers it out of scope :)

Do you?  Remember there are two concepts of "scope."  One relates to the scope of the original competition, which is the scope test that GAO would use.  The other is whether the change is the type that the parties to the contract could have anticipated.  This is the test used by the appeals boards to determine if a change is a cardinal change.

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2 minutes ago, Retreadfed said:

Do you?  Remember there are two concepts of "scope."  One relates to the scope of the original competition, which is the scope test that GAO would use.  The other is whether the change is the type that the parties to the contract could have anticipated.  This is the test used by the appeals boards to determine if a change is a cardinal change.

Read Vern’s  post . That thread involves a situation similar to this scenario. 

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There would be absolutely nothing wrong in exercising the option then deleting a CLIN but that would be wasteful and involve needless extra steps. There is no cardinal change in reducing the scope by one CLIN out of ten. 

I do think that the contracting officer still must evaluate whether adding the work,  either by exercising the option as is or by bilaterally modifying the option,  would be in the government’s best interest or whether a new procurement would be a better value- per 17.207. 

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3 hours ago, PepeTheFrog said:

*deleted the whole thing, PepeTheFrog responded to the wrong question because this thread and OP is incoherent*

 

I agree with you, Pepe. This thread wasn’t started under “Beginner’s “ Topic Area and led us all tortuously to what the actual scenario and resulting question was. 

The gist is this: ‘Can I unilaterally exercise the option to award one less CLIN because that effort hasn’t been funded for the next option period?’

Why Guardian beat around the bush so long to explain the scenario doesn’t make any sense to me. 

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56 minutes ago, joel hoffman said:

There would be absolutely nothing wrong in exercising the option then deleting a CLIN but that would be wasteful and involve needless extra steps. There is no cardinal change in reducing the scope by one CLIN out of ten. 

I do think that the contracting officer still must evaluate whether adding the work,  either by exercising the option as is or by bilaterally modifying the option,  would be in the government’s best interest or whether a new procurement would be a better value- per 17.207. 

Joel,

How would I exercise all ten CLINs if I only have a funding commitment for nine (Anti-deficiency Act violation?) and no authority to incrementally fund?  Sounds like you prefer exercising nine out of ten CLINs per 52.217-9 over a bilateral mod because of potential scope issues.  How was your sailing trip by the way?

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14 hours ago, Guardian said:

Joel,

How would I exercise all ten CLINs if I only have a funding commitment for nine (Anti-deficiency Act violation?) and no authority to incrementally fund?  Sounds like you prefer exercising nine out of ten CLINs per 52.217-9 over a bilateral mod because of potential scope issues.  How was your sailing trip by the way?

Guardian, yep I agree with Vern’s excellent analysis and with bilateral reduction in scope and mod to add the nine CLINs for the next year’s effort.  This would be after complying with 15.207 (c) through (e). 

I mentioned the other alternative only because some hinted that reducing the scope at all might affect the original competition or be considered a cardinal change. If so, then  the government couldn’t add the option and exercise its contractual right to a partial termination for convenience, which makes no sense to me. Of course, the government may partially terminate the scope of work in a contract during performance after award.  The government could also issue a deductive Change during contract performance, as long as it doesn’t make a major change, reprice work for current market conditions, etc. See Verns advice and caveats in the referenced 2011 thread. 

If it can delete work through a partial termination or a Change Order, in accordance with the terms of the contract if the requirements change,  it should be able to make minor deductions bilaterally when adding the option year.

That would be appropriate as long as 1) it isn’t a cardinal change, 2) it is a minor deduction,  3) it doesn’t affect the original competition,  4) the government doesn’t do it because it failed to do the market research and documented determinations required by 15.207 (c)-(e) before adding the option year. 

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To clarify, I’m not applying the above logic to repricing scenarios, significant revisions to the scope of work, means or methods or adding outside the scope work via the exercise of the option.  

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7 hours ago, joel hoffman said:

Guardian, yep I agree with Vern’s excellent analysis and with bilateral reduction in scope and mod to add the nine CLINs for the next year’s effort.  This would be after complying with 15.207 (c) through (e). 

I mentioned the other alternative only because some hinted that reducing the scope at all might affect the original competition or be considered a cardinal change. If so, then  the government couldn’t add the option and exercise its contractual right to a partial termination for convenience, which makes no sense to me. Of course, the government may partially terminate the scope of work in a contract during performance after award.  The government could also issue a deductive Change during contract performance, as long as it doesn’t make a major change, reprice work for current market conditions, etc. See Verns advice and caveats in the referenced 2011 thread. 

If it can delete work through a partial termination or a Change Order, in accordance with the terms of the contract if the requirements change,  it should be able to make minor deductions bilaterally when adding the option year.

That would be appropriate as long as 1) it isn’t a cardinal change, 2) it is a minor deduction,  3) it doesn’t affect the original competition,  4) the government doesn’t do it because it failed to do the market research and documented determinations required by 15.207 (c)-(e) before adding the option year. 

Excellent response, Joel and a great help!

15 hours ago, joel hoffman said:

Why Guardian beat around the bush so long to explain the scenario doesn’t make any sense to me. 

I started with a fundamental, seemingly elementary question, in hopes of getting answers to more specific questions.  Perhaps that first question wasn't worded as it should have been, but I asked several other good questions along the way that were flat out ignored.  I am not sure why.  I will assume the blame in that I tried to pack too much into one thread.  I too am retiring and going out to enjoy this nice weather.

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Good luck, Guardian. This morning, I read through this thread again as well as the 2011 thread I referenced and Vern Edwards post therein. 

He began with :

“There is no absolute prohibition against the modification of an option prior to or at the the time of its exercise. There are two issues concerning the modification and exercise of options. I will call them the Validity Issue and the Scope of the Contract/Competition Issue.”

He then worked through the two issues and urged caution and prudence. 

I mentioned earlier that one area of ten services now being performed that you have no need or funding for and that you need to delete might not be completely severable and/or the contractor might not want to perform a smaller scope of work. 

 I don’t think that you can UNILATERALLY exercise a portion of the option, affect scope of the competition or expand the scope of the option period.

My advice is to communicate the problem and scenario with the contractor and find out what the impact is (unabsorbed fixed costs? ) and if the contractor can accept the reduction as priced but for the impact, if any. Then work through it bilaterally before extending the term of the contract.

If the contractor wants to reprice the remaining portion of the option, that would be improper and affect the scope of the competition. Then it looks like you would have to re-procure the next year’s services.

Is that clearer?  

 

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3 hours ago, Jamaal Valentine said:

I'm retiring from this thread. My head and heart hurts.

Jamaal, I take it that your solution is to abandon further years of this contract and re-procure for next year.

There is no need and no funding for one of the portions of services. Even if there were funds but not the need, it would involve unnecessary extra work, be wasteful of resources and  costs to exercise the entire option then delete the work by change or partial termination for convenience. 

Work it out ahead of time, within the scope of the competition. Sorry your heart hurts. 

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@joel hoffman I honestly can't make heads or tails out of the details I would need to make a decision (exercise the 9 CLINs and be done). However, I thought Guardian got his/her answer a while ago and that's all that matters to me.

This thread started out confusing and gained momentum with all sorts of opinions and sidebars added in just for fun (often the case here and I'm guilty of it). For example, I don't know where you came up with there being 'no need'...

2 hours ago, joel hoffman said:

There is no need and no funding for one of the portions of services.

I only recall the OP saying they didn't have funding.

It's okay though; Guardian seems satisficed.

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3 hours ago, joel hoffman said:

If the contractor wants to reprice the remaining portion of the option, that would be improper and affect the scope of the competition.

See, CTA, Inc., 00-2 BCA 30947 and see if that affects the above conclusion.

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32 minutes ago, Retreadfed said:

See, CTA, Inc., 00-2 BCA 30947 and see if that affects the above conclusion.

How about a link please. Tried search for that on iPhone iPad and computer.  No luck. 

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