When extending a contract is the government required to extend the full scope of the previous POP into the extension period on a firm fixed price contract? Can the scope of work be reduced to transition the a smaller follow-on contract?
Since the exercise of an option is a unilateral right of the government, there are various considerations that must be followed. For instance, FAR 17.207(f) notes that options must be consistent with the terms of the contract and must “… satisfy requirements of Part 6 regarding full and open competition, the option must have been evaluated as part of the initial competition and be exercisable at an amount specified in or reasonably determinable from the terms of the basic contract…”
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The facts that you have described implicate both the fair competition requirements of FAR Part 6 and notions of contract scope. Both of those concepts are dependent upon, and influenced by, the business judgment of the contracting officer. As a consequence, you should consult with more experienced contracting officials and your legal staff.
An additional course of action may exist: rather than exercise the option and then alter the period of performance to six months, you may find it more appropriate to determine if your contract contains the clause at 52.217-8, Option to Extend Services. This clause permits the Government to require continued performance for a total not to exceed 6 months.