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  • Question

    Can I have a task order contract that includes a base 5 year ordering period and an option period for an additional 5 years?


    Answer

    Based on current regulations, your interpretation is correct.  As you cited in DFARS 217.204(e)(i), the ordering period of a task order/delivery order contract may be for any period up to 5 years (base period), may be extended for one or more periods via option exercise, and shall not exceed 10 years unless approved by the head of the agency.  In other words, your scenario of a 5-year base plus an options(s) of 5 more years would be an appropriate and valid acquisition strategy.  Additionally, there are examples where the head of the agency has determined that exceptional circumstances require more than the 10 year period such as GSA who routinely have Multiple Award IDIQ contracts with a 5 year base and three 5 year options.
     
    For your scenario of 5 year base plus 5 year option(s), you would need to obtain approval at a level no lower than the Chief of the Contracting Office (CCO) prior to solicitation and supported by the appropriate justifications and documentation as per NMCARS 5217.204(e).  If you deemed it necessary for your contract term to exceed 10 years, that approval would be from the Assistant Secretary of the Navy for Research, Development and Acquisition (ASN(RDA)).  Keep in mind, just because a 10 year term is allowed by regulations doesn’t mean the multiple levels that will review and approve your J&A will agree.
     
    If you are interested, there is an older blog post on the Where in Federal Contracting site that provides some background, history and analysis about reality versus myth on the five-year limit on government contracts.  http://www.wifcon.com/anal/analfiveyear.htm
     
    As always, we encourage you to work with your contracting and legal office as well as referencing your agency specific regulations for any acquisition as we don't have all the facts or access to the contract files.


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