Jump to content
The Wifcon Forums and Blogs

Recommended Posts

2 hours ago, jwomack said:

Lockheed Martin IR Imaging Sys., Inc. v. West, 108 F.3d at 323 “option exercise must be unconditional and in exact accord with terms of contract being renewed”

 

Alliant Techsystems, Inc. v. United States, 178 F.3d 1260, 1275 (Fed. Cir. 1999) “attempt to exercise an option outside its terms does not constitute a valid exercise of option”)

 

Black’s Law 10th.  Breach of contract.  Violation of a contractual obligation by failing to perform one’s own promise, by repudiating it, or by interfering with another party’s performance”

 

Black’s Law 10th.  Material breach.  A breach of contract that is significant enough to permit the aggrieved party to elect to treat the breach as total (rather than partial), thus excusing that party from further performance and affording it the right to sue for damages”

What's your point?  Nothing you have said here is inconsistent with an exercise of an option that is not in strict compliance with the terms of the contract being a material breach of a contract that excuses the contractor from performing in accordance with the invalid exercise of the option.  In this regard, the government has promised the contractor that any exercise of an option will be done as stated in the contract.  An attempted exercise of an option that is not in accordance with the process described in the contract is a failure to perform in accordance with that promise.

Link to comment
Share on other sites

  • Replies 58
  • Created
  • Last Reply

Top Posters In This Topic

1 hour ago, Retreadfed said:

What's your point?  Nothing you have said here is inconsistent with an exercise of an option that is not in strict compliance with the terms of the contract

You cannot "exercise an option that is not in strict compliance with the terms of the contract".  It's impossible and contradictory to the definition of what exercising an option means.  See the Lockheed and Alliant citations provided above.

Link to comment
Share on other sites

3 hours ago, joel hoffman said:

But - I’m not talking about a unilateral “exercise” of an option. Strictly bilateral - the issue is one of in-scope or out-of-scope.  

Much in same context of jwomacks comments.  Options as discussed in the FAR are a unilateral right,  unless so stated in a contract that it shall be bilateral.  As such I believe your comment noted above is off base from the standpoint that I have never seen nor do I believe the FAR guidelines support anything other than the government having a unilateral option right.

Edited to add - Bilaterally the government and a contractor can do anything to a contract bilaterally (mutual agreement) even if out of scope as long as the government adheres to a process consistent in doing so  pursuant to CICA.

Link to comment
Share on other sites

54 minutes ago, jwomack said:

You cannot "exercise an option that is not in strict compliance with the terms of the contract". 

You mean that the government cannot properly exercise an option other than in strict compliance with the terms of the contract.  However, the government will sometimes issue a modification to a contract purporting to exercise an option.  However, that purported exercise of an option has not been accomplished in accordance with the terms of the contract.  In that case, the contractor has a problem.  Does it comply with the purported exercise of the option without objection, comply after objecting and seek an adjustment to the contract price, or does it refuse to perform at all.  If it does either of the first two, what is the basis upon which the government can accept and pay for such performance? 

Link to comment
Share on other sites

1 hour ago, C Culham said:

Much in same context of jwomacks comments.  Options as discussed in the FAR are a unilateral right,  unless so stated in a contract that it shall be bilateral.  As such I believe your comment noted above is off base from the standpoint that I have never seen nor do I believe the FAR guidelines support anything other than the government having a unilateral option right.

Edited to add - Bilaterally the government and a contractor can do anything to a contract bilaterally (mutual agreement) even if out of scope as long as the government adheres to a process consistent in doing so  pursuant to CICA.

Not sure of your point but the government has the unilateral right whether or not to add work or time that is addressed in an option. The contractor normally has no choice to decline as long as there are no changes to the terms and conditions. 

There may be circumstances (some of which ARE addressed in the FAR as I explained earlier) where the parties should or must bilaterally agree to adjustments for various reasons but not to “repricing”. The government doesn’t have the unilateral right to “exercise” an option that is different than that which was proposed, evaluated and accepted in a competitively awarded proposal. 

Yes- of course- if the ultimately added work or period is out of scope of the contract or scope of competition, an exception from full and open competition pursuant to CICA is necessary and requires a supplemental agreement. 

 

Link to comment
Share on other sites

I do believe that the parties may institute in scope changes to future optional line items.  Then the government can exercise those already modified options at the appropriate time.

For instance, if an in-scope change will affect every option year’s efforts similarly, the parties would be wise to implement the change to all of the affected option CLINs, rather than having to implement the same change each time an option is exercised.

Thus, the key is whether or not the change is “in-scope” or not. 

Link to comment
Share on other sites

  • 1 month later...
On ‎7‎/‎22‎/‎2019 at 2:13 PM, joel hoffman said:

17.204 (c) says:” The period shall be set so as to provide the contractor adequate lead time to ensure continuous production.” 

One can’t simply write anything they want, without considering how to provide the contractor adequate lead time to ensure continuous production .  

One shouldn’t simply insert a number of days, without providing context to those days and without providing adequate lead time. 

I feel the most overlooked FAR reference is the very next line which is:

(d)  The period may extend beyond the contract completion date for service contracts.  This is necessary for situations when exercise of option would result in the obligation of funds that are not available in the fiscal year in which the contract would otherwise be completed. 

That not really contradicts but defeats the intent of (c) but is required with fiscal year service contracts.  So many exercise options contingent on availability of funds which to me is an invalid exercise.  How can you unequivocally exercise an option that is based on a future event (the availability of funds). 

 

 

Link to comment
Share on other sites

  • 5 months later...
Guest
This topic is now closed to further replies.
 Share


×
×
  • Create New...