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    Is there anything in the FAR that would preclude realigning the unused value of the exercised option years 2 and 3, $1,580,000 to the unexercised option year 4 so it can be exercised?


    Answer

    Based on discussions with you for clarification we determined you have a sole source requirements contract with a NTE task order value of $5.4M. To date you have obligated $3,555,951 worth of task orders and have issued modifications to increase the basic contract and option year values to reflect increased work in those years. You had no orders for option years 2 and 3 and your goal is to realign the value of option year 4 (Now $0 due to previous realignments to cover increased work in the base and option year 1 requirements). You now want to execute a modification to change option year 4 from the now realigned $0 to $1,594,049 to reflect the remaining maximum order value of the requirements contract of $5.4M. The remaining $250,000 is slated to be reserved for a possible 6 month extension of service.

    Question: Is there anything in the FAR that would preclude realigning the unused value of the exercised option years 2 and 3, $1,580,000 to the unexercised option year 4 so it can be exercised?

    You may execute a supplemental agreement to modify option year 4 task order maximum to reflect up to the remaining task order maximum of $1,594,049, which will leave $250,000 for a possible extension of service. FAR 43.103 (a) describes this type of modification. Although you are not exceeding the maximum contract order of $5.4 Million, a Justification and Approval (J&A) may be appropriate for the modification under a sole source in accordance with FAR 6.303. Also, be sure  to use the appropriate year of R&D funding to accomplish your objectives in support of your customer in accordance with the DoD Financial Management Regulation.  Recommend that you further consult with your program attorney and financial manager to assure all Organizational policies have also been considered.


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