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  • Question

    How can I avoid putting my Agency at risk for a lapse in critical IT services due to an expiring contract of which I only have 30 days on which to act.


    Answer

    One potential solution to resolve your immediate crisis is to see if clause FAR 52.217-8, Option to Extend Services, was inserted into your contract.  This could potentially allow you to extend your current contract up to 6 months.

    Option to Extend Services (Nov 1999)

    The 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. The option provision may be exercised more than once, but the total extension of performance hereunder shall not exceed 6 months. The Contracting Officer may exercise the option by written notice to the Contractor within ______ [insert the period of time within which the Contracting Officer may exercise the option].

    However, FAR 37.111, Extension of Services and confirmed by case law, Arko Executive Services, Inc. v. U.S., 78 Fed. Cl. 420 (2007), has shown that this clause is intended to be used in circumstances that are out of the Contracting Offices control, such as delays resulting from bid protests or alleged mistakes in bids.  In order to avoid negotiation of short extensions to existing contracts, the contracting officer may include FAR 52.217-8 to allow for the contracting office to extend the current contract at the current rate and limits work to what is currently being performed in the contract in order to allow for a negotiation to end and [potentially] new contractor to start work. 

                Furthermore, when the reason a current contract is expiring without a new one in place is within the control if the Contracting Officer, such as lack of advance acquisition planning, this was addressed in case B-401472, Major Contracting Services, Inc., September 14, 2009 (http://www.gao.gov/decisions/bidpro/401472.htm).  GAO stated that “…the agency's has not provided a reasonable basis for the solesource extension. It is apparent that the Army did not properly plan in advance for its requirement to extend this contract; we do not think that the agency could sit idly by in the face of the circumstances here and not take action to obtain more competition for its requirements.”  In these circumstances, unless the potential 6 month option under FAR 52.217-8 was evaluated as part of the initial award, the Contracting Officer will need to use an authority under FAR 6.302 in order to execute an action.  This will depend on your market research result.  If there is competition, then the extension will need to be competed potentially under urgent and compelling with the J&A done after contract award.  If it is sole source, then you would need to do your J&A in advance.  10 U.S.C. sect. 2304(f)(5)(A) specifically states, “An agency using the urgency exception may restrict competition to the firms it reasonably believes can perform the work in the available time so long as the agency did not create the need for the sole-source award from a lack of advanced planning.”  This is confirmed in FAR 6. 301(c)(1) and FAR 6.301(d).

    In conclusion, not knowing all the circumstances surrounding this procurement, one must also consider is the item under or over SAP.  If at or below SAP, then FAR part 6 does not apply (see FAR 6.001(a)).  However, if the service is considered commercial, one must still consider the requirements at FAR 13.501(a) for further guidance.

     

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