1) Can we increase the scope back to the original or a portion thereof?
2) Are you aware of any GAO cases concerning this?
The courts usually look at what was in the minds of the parties to the contract as well as what was in the minds of the competition at the time of award. That being said it would appear increasing it back to what it originally was would be considered in scope. Before exercising the second option you have to make sure the price is still good compared to the market or you should be going out with a new solicitation. If you are talking about doing the increase back to the original for the first option you will have to do this as a bilateral mod and the price could go up or it may go down depending on the market and what your contract is for or if there has been a loss of learning. This could also be the case if it is for the second option year.
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At the moment I have not found a GAO case that basically matches this situation, but I would guess they have had at least one if not more cases like this sometime in the past.