I'm just using their words about "Authority" I believe that if you plan to exercise an option period that you insert the clause into the contract and you cite that clause in the modification. You didn't put 17.207 in the contract you put 52.217-9 in the contract so cite it. The issue I have always come across is that no matter how much sense you seem to make people pushing 60 years old never seem to respect the opinion of something who just turned 30. The cite their years of experience and don't want to admit they have been doing things incorrect for the last 30+ years.