Option Clause

[PATRICK3]

If a contract has 52.217-8 included and was competed on full and open competition, but the vendor now increases that amount, can we do a JOFOC for the difference in amount or do a new contract for those 6 months? The original 52.217-8 was included in the original contract and was evaluated during the solicitation process. It's a FFP contract. 

[Retreadfed]

44 minutes ago, PATRICK3 said:

but the vendor now increases that amount,

What does this mean?

 

45 minutes ago, PATRICK3 said:

The original 52.217-8 was included in the original contract

Also, what do you mean by this?

[PATRICK3]

@Retreadfed the vendor isn't using the last option years pricing anymore and has increased the amount for the next 6 months under that clause. 

 

I'm not sure how else to explain that 52.217-8 was included in the contract. 

[Retreadfed]

13 minutes ago, PATRICK3 said:

the vendor isn't using the last option years pricing anymore and has increased the amount for the next 6 months under that clause. 

Just to be clear, has a new wage determination been issued that covers the six month extension?  If not, what is the vendor's justification for increasing the cost of performance for the option period?

[General.Zhukov]

The pricing in 52.217-8 is typically fixed unless there is some exception like wage determination, or using a more exotic pricing arrangement, etc.  The vendor unilaterally increasing the amount isn't a sufficient justification for an approved JOFOC, unless there is more to the story.

 

[Jamaal Valentine]

BLUF: I cannot answer your single question based on what you wrote. However, I will provide some general information rather than to pepper you with questions. Hopefully, this information gives you something to help yourself research or refine your inquiry.
 

If the government is exercising an option under a contract clause (i.e., 52.217-8), then the terms of that option apply.

Under FAR 52.217-8, “[t]he Government may require continued performance of any services within the limits and at the rates specified in the contract. These rates may be adjusted only as a result of revisions to prevailing labor rates provided by the Secretary of Labor.”

I won’t question your statement that the vendor increased the price, but I will say that if the vendor increased their price, I don’t believe you are operating under FAR 52.217-8.

This brings me to your actually question:

23 hours ago, PATRICK3 said:

can we do a JOFOC for the difference in amount or do a new contract for those 6 months?

Again, 52.217-8 facilitates continued performance of services within the limits and at the rates specified in the contract. The option terms were evaluated and included in the resultant contract. This was presumably done in a way that would satisfy FAR 17.207(f) at the time of exercise. Thus, the ‘JOFOC’ or ‘new contract’ would not be necessary.

Now, the reason you may be considering a JOFOC or new contract is because someone has realized the option exercise is not in accordance with the terms of the option. If that is the case, a JOFOC or new contract may make sense. This makes sense when a change (such as an extension) is beyond the scope of the contract (e.g., terms of an option) and is essentially a new procurement. See Major Contracting Services, Inc., GAO B-401472, at 6, 2009.

[Don Mansfield]

On 7/17/2023 at 9:29 AM, PATRICK3 said:

but the vendor now increases that amount

Did you agree on contract prices or does the vendor control the contract prices?