Vern Edwards

@C Culham Yes. When I used the phrase "exercise the option" I was referring to the action of the party who has the right of exercise. In a government contract, that's usually the government, not the contractor. So if the government asks for a change to the terms of the contract as a condition of exercising its option, and if the contractor refuses, the government can still exercise the option as it is, and the contractor cannot decline.

@Neil Roberts I didn't mean that the CRS report is malarkey. I meant that the following assertion is malarkey: I sincerely apologize for "malarkey." I should just have said that I disagree. Here's why: The law conditions the creation of new contractual relations and the voluntary extension of current contractual relations upon assent to certain terms. The relevant passage says: FAR 4.2104 states: According to the FAR councils, the law and the regulation are designed to protect citizen privacy and national security. What I understand the statute and regulation to do is prohibit new and extended voluntary relations. New contracts and the exercise of options are voluntary undertakings. With respect to options, any party to a contract is free to seek changes to the terms of an option and to decline to exercise the option if the other party will not agree. A contractor has no contractual right to expect a contract extension that is not contractually required, and neither the statute nor the regulation prohibits a CO from agreeing to an extension to which a contractor is entitled, such as an equitable time adjustment after a contract change or a time extension as compensation for a government breach, such as late GFP. Neither the statute nor the implementing regulation requires existing contractors to accept the new clause. They don't require the termination of a contract in case of refusal. Acceptance is entirely voluntary. Moreover, the statute provides for waivers. I cannot see how the law or the regulation interferes with existing contractual rights. I don't see any breach of contract. I don't see any bad faith or unfair dealing. Do you, Neil? But you might change my mind by making an argument instead of just dropping a 20-page maybe-this-maybe-that report in here and alluding to a vague possibility without explanation. If you think the CRS report points the way to particular possibilities in this matter with respect to contract interference, why don't you tell us about it? I'm eager to read what you have to say.

Malarkey. The CRS report is irrelevant. There is no "taking" issue. It is well established that a contractor has no right to the exercise of an option. See, e.g., Puget Sound Environmental Corp., ASBCA 58828, 16-1 BCA ¶ 56465: Does anyone think that Congress acted in bad faith when it enacted the law or that the FAR Councils act in bad faith when they promulgated the implementing regulations? This is government contracting. Deal with it.

Neither do I, but there must be something, because agencies keep coming up with them.

Ten pages in each of 1,000 expected responses comes to 10,000 pages to be read by the evaluation team. Why don't they just give contracts to all of the 1,000 and let the ordering agencies decide which ones they want to do business with? Honestly, it make me very sad to know that I won't live long enough to see my country have an intelligent contracting process.

The FAR does not impose a duty on the part of contractors to accept the clause. It imposes a duty on contracting officers to either (1) persuade contractors to accept the clause or (2) refrain from exercising an option to extend. The common law of contracts imposes the requirement for consideration.

Let's sort out the issue of consideration. If the parties to an executory contract are going to modify it in a way that is not already provided for by a contract clause, such as the Changes clause, then consideration is required by the common law of contracts. See Keeter Trading Co., Inc. v. U.S., 85 Fed. Cl. 613 (2009): The parties would have to agree on what would constitute adequate consideration.

@Retreadfed I don't think so. FAR says to include the clause in "all" contracts. I think that means what it says, regardless of the date of award. I'm open to being wrong about that, but in light of statute and regulation I need some authoritative reference. As has already been pointed out, FAR 1.108(d) says, "Unless otherwise specified..."

@MBrown Now THAT was a useful post! 👏

The OP asked if any of us has faced a situation similar to the one that he's facing. The closest that I've come is a situation in which a sole source refused to provide certified cost or pricing data. In that case, we got a a waiver. Anybody else?

There is no mention of overlapping periods of performance anywhere in the FAR System. The word "overlapping" does not appear in the FAR. It appears once in the Department of Agriculture FAR Supplement in the phrase "overlapping provisions" and once on the Agency for International Develop FAR supplement in the phrase "overlapping decision phases." The word "concurrent" appears much more frequently, but I'm not going to devote any more time to an inquiry such as the one that initiated this thread, in which the OP provided no background information. Nor will I devote time to searching GAO decisions.

I wonder how many Forum readers know the history of the "technical proposal" concept in Government source selection.

There it is!

Retread, So if the contract is for commercial items the clause may already be in the contract. Okay, got it. And if not, then the clause must be added. Right? Then you said: I don't understand what you mean. What is the implication?

Why are they bothering with a ten page "technical" proposal? It's a waste of time. Are they hiring essay writers? And Phase Two should be Phase One. How are they going to evaluate price?

@C Culham I apologize for being thick about this, but what are you saying?

@Retreadfed See 85 Fed. Reg. 42665, July 14, 2020, Interim Rule, Federal Acquisition Regulation: Prohibition on Contracting With Entities Using Certain Telecommunications and Video Surveillance Services or Equipment, at 42673:

@Retreadfed Retread, I don't think it matters, because FAR 4.2105(b) says: It does not exclude contracts for commercial items. And contracts for commercial items are not among the exceptions in FAR 4.2102(b).

FAR 52.216-22 is supposed to be included in the basic IDIQ contract, and is binding on every task order in accordance with the clause at FAR 52.216-18, Ordering, which is supposed to be included in every IDIQ contract, paragraph (b), which states: "(b) All delivery orders or task orders are subject to the terms and conditions of this contract. In the event of conflict between a delivery order or task order and this contract, the contract shall control."

Wouldn't it be funny if the contractor were refusing to complete the cert and accept the clause because it doesn't want the government to exercise the option?

Read FAR Subpart 4.21, especially 4.2102(c) and 4.2105(b).

Not with respect to this particular issue. Three recommendations: 1. change the contractor's mind (escalate, if necessary), or 2. change your mind --- obtain a waiver IAW FAR 4.2104, or 3. say goodbye to the contractor.

By the way, "no cost extension" sometimes means at no cost to the contractor. See Jess Howard Electric Co., ASBCA 44437, 96-2 BCA 28345: "[The CO] denied a no-cost extension and proposed a 60 day extension at a cost of 1 percent per month plus $350. [The Government] would have granted the extension for consideration, but [the Contractor] declined." In that case the "1 percent per month plus $350" was to be consideration for the extension, which would have been a cost to the contractor.

Good points, help! (And I remember that dinner.)

While we're at it, we should discuss the meaning of "no cost extension" (aka, "no cost time extension"). I interpret "extension" to mean a change to a completion or delivery date in order to accommodate what might otherwise be a late completion or delivery. My understanding of "no cost" is that the contractor gets more time to complete or deliver, but not more money. The term is not indicative of the reason why the extension is at no cost. If you read enough board of contract appeals decisions you'll see that "no cost extensions" are requested, granted, and denied for a wide variety or reasons, which can cause some uncertainty as to the nature of the transaction. There have been cases in which contractors were, in theory, entitled to both more time and more money because of a government-caused delay, but requested a "no cost extension" simply because the delay did not increase the contractor's costs. See e.g., Corbett Technology Co., Inc., ASBCA 49477, 00-1 BCA 30734 (2000): "On 2 August 1990 appellant requested a no-cost extension of time until 15 November 1990. Appellant's practice was to request no-cost extensions if no extra costs were going to be incurred." As a general rule, a CO does not need a contract clause in order to grant a request for a "no cost extension." But the CO must obtain consideration in return if the contractor is not contractually entitled to an extension.