Sign In
  • Question

    Can we still proceed with the exercise of Option Year 1 of this contract through a bilateral modification, or is the contract expired with no possibility to exercise?


    Answer

    When you look at FAR 17.207(f) it states “Before exercising an option, the contracting officer shall make a written determination for the contract file that exercise is in accordance with the terms of the option, the requirements of this section, and Part 6.”  FAR Part 6 directly relates to the requirements set down by the Competition In Contracting Act (CICA)of 1984.  In your current situation, the base year contract clearly states a completion date of 30 June 2012.  While you gave the contractor notice of your intent to exercise the option (though not the 60 days required by the
    clause), no option was actually exercised prior to the expiration of the base contract.  In reviewing a GAO decision concerning doing an extension beyond the current completion dates and does this violate CICA, the following offers you insight into this aspect: 
     
    On the issue of CICA looking at the 1985 GAO case of Washington National Arena Limited Partnership, B-219136, Oct. 22, 1985.  “Where a contract for visitor reservation services has expired, the contractual relationship which existed is terminated and the issuance of an amendment 4 months after the expiration date to retroactively extend and modify the contract as if it had not expired amounts to a contract award without competition, contrary to the requirements of the Competition in Contracting Act. A protest challenging the amendment is sustained, therefore, and GAO recommends that a competitive procurement for the requirement be conducted.” 
     
    The right to exercise an option is the government’s unilateral right.  However, the option must be executed exactly as it is written.  The referenced GAO decision clearly states that when a contact period is expired and you retroactively extend and modify (which is what a bilateral agreement would be) the contract as if it had not expired without competition you violate CICA.  This decision was also confirmed in another GAO protest DRS Precision Echo, Inc. File: B-284080; B-284080.2 Date: February 14, 2000.

    Open full Question Details