We have a contract that was awarded as an 8(a) T&M for a period of three years which is ending at the end of July. The issue is that another office is will be procuring the follow on services for us and has recently advised us that they have revised the procurement stategy and are planning on bundling support service requirements. We have been told to find a temporary solution for about six months. Can we extend the existing contract six months using the continuity of services clause (FAR 52.237-3) even though the contractor has graduated from the 8(a) program? Does FAR 16.6(d)(ii) apply? Or is there a better solution?

We do understand that the true intent of the clause is to transition contractors.

Does your contract contain 52.217-8, Option to Extend Services clause? If so, why not use that?

Since you are extending a T&M contract over the 3 year mark, you may have to receive HCA approval for the T&M based on FAR 16.601( d )( ii ). The clause states "Approved by the head of the contracting activity prior to the execution of the base period when the base period plus any option periods exceeds three years" [emphasis added] but you may have a local policy that requires the approval when you use Option to Extend Services.

I am going to assume, scubamom, that you are new to this work, because if I thought otherwise I'd wonder about you.

Can we extend the existing contract six months using the continuity of services clause (FAR 52.237-3) even though the contractor has graduated from the 8(a) program? Does FAR 16.6(d)(ii) apply?

We do understand that the true intent of the clause is to transition contractors.

As for exercising an option after a firm has graduated from the 8(a) program, see the SBA's rules at 13 CFR ? 124.514, Exercise of 8(a) Options and Modifications:

(a) Unpriced options. The exercise of an unpriced option is considered to be a new contracting action.

(1) If a concern has graduated or been terminated from the 8(a) BD program or is no longer small under the size standard corresponding to the NAICS code for the requirement, negotiations to price the option cannot be entered into and the option cannot be exercised.

(2) If the concern is still a Participant and otherwise eligible for the requirement on a sole source basis, the procuring activity contracting officer may negotiate price and exercise the option provided the option, considered a new contracting action, meets all regulatory requirements, including the procuring activity's offering and SBA's acceptance of the requirement for the 8(a) BD program.

(3) If the estimated fair market price of the option exceeds the applicable threshold amount set forth in ?124.506, the requirement must be competed as a new contract among eligible Participants.

(Priced options. The procuring activity contracting officer may exercise a priced option to an 8(a) contract whether the concern that received the award has graduated or been terminated from the 8(a) BD program or is no longer eligible if to do so is in the best interests of the Government.

Okay?

You seem to have read the Continuity of Services clause. Does it say the CO can extend the contract for 6 months, or does it say 90 days? It says 90 days, doesn't it? Moreover, it doesn't call on the contractor to continue to perform the service, but to provide phase-in services during transition to a new contractor. But then you read it and knew that, too. And FAR 16.601(d) expressly mentions its application to options, doesn't it? Okay, so those questions have been asked and answered.

Are there better solutions? See woops85's post.

Why not just do a new noncompetitive contract? You have good justification - need interim coverage until a new comptitive award is made and it doesn't make sense to compete the bridge effort.

I'm not so sure that the need for interim coverage is, in and of itself, sufficient to justify other than full and open competition. The contract is T&M, but is it also IDIQ? If it is, what is the dollar value of the work? Perhaps individual tasks can be acquired speedily and competitively for six months using simplified acquisition procedures. Is the work commercial? If so, then SAP can be used for acquisitions of up to $6.5 million pursuant to FAR Subpart 13.5. We don't know enough to say that there is good justification for other than full and open competition.

Does your contract contain 52.217-8, Option to Extend Services clause? If so, why not use that?

Since you are extending a T&M contract over the 3 year mark, you may have to receive HCA approval for the T&M based on FAR 16.601( d )( ii ). The clause states "Approved by the head of the contracting activity prior to the execution of the base period when the base period plus any option periods exceeds three years" [emphasis added] but you may have a local policy that requires the approval when you use Option to Extend Services.

The contract does contain the clause 52.217-8 but all options have been exercised. As far as clause 16.601(d)(ii) we do not have local policy.

I am going to assume, scubamom, that you are new to this work, because if I thought otherwise I'd wonder about you.

As for exercising an option after a firm has graduated from the 8(a) program, see the SBA's rules at 13 CFR ? 124.514, Exercise of 8(a) Options and Modifications:

Okay?

You seem to have read the Continuity of Services clause. Does it say the CO can extend the contract for 6 months, or does it say 90 days? It says 90 days, doesn't it? Moreover, it doesn't call on the contractor to continue to perform the service, but to provide phase-in services during transition to a new contractor. But then you read it and knew that, too. And FAR 16.601(d) expressly mentions its application to options, doesn't it? Okay, so those questions have been asked and answered.

Are there better solutions? See woops85's post.

Vern, I am returning to contracting after being away in the private sector for about 8 years. I remembered your website from along time ago and would use it from time to time back then. As far as my question being answered, it has been answered based upon the citation you gave me at 13 CFR 124.514. We will need to look at other temporary options. Thank you all so much for willingness to share your knowledge.

Scubamom:

When you respond to a post, you will see the above quote in the area where you are writing. You can do two things with the above blocked off data. 1) You can delete it and write your response. 2) You can keep it there and write your response under the blocked data. Then just post it.

Bob

I'm not so sure that the need for interim coverage is, in and of itself, sufficient to justify other than full and open competition. The contract is T&M, but is it also IDIQ? If it is, what is the dollar value of the work? Perhaps individual tasks can be acquired speedily and competitively for six months using simplified acquisition procedures. Is the work commercial? If so, then SAP can be used for acquisitions of up to $6.5 million pursuant to FAR Subpart 13.5. We don't know enough to say that there is good justification for other than full and open competition.

As far as the new procurement, since this requirement was in the 8(a) program wouldn't we need to award another 8(a) award? We already have an approval of a firm from SBA when we originally were going to award the follow on contract.

As far as the new procurement, since this requirement was in the 8(a) program wouldn't we need to award another 8(a) award? We already have an approval of a firm from SBA when we originally were going to award the follow on contract.

Here is the FAR coverage on repetitive 8(a) contracts:

Quote

19.804-4 -- Repetitive Acquisitions.

In order for repetitive acquisitions to be awarded through the 8(a) Program, there must be separate offers and acceptances. This allows the SBA to determine?

(a) Whether the requirement should be a competitive 8(a) award;

( A nominated firm?s eligibility, whether or not it is the same firm that performed the previous contract;

( c) The effect that contract award would have on the equitable distribution of 8(a) contracts; and

(d) Whether the requirement should continue under the 8(a) Program.

Unquote

My experience over the years is that the SBA will not release a contract requirement from the 8(a) program: Once an 8(a), always an 8(a)!

My most recent experience is that SBA will not allow competition among 8(a) firms if the prior contract was awarded to the 8(a) contractor on a sole source basis: Once an 8(a) sole source, always an 8(a) sole source!

The contract does contain the clause 52.217-8 but all options have been exercised. As far as clause 16.601(d)(ii) we do not have local policy.

FAR 52.217-9 is the clause that pertains to the option periods that you have already exercised. 52.217-8 is different.