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  • Question

    We have an IDIQ Service contract with options awarded two years ago. The contractor has now graduated the 8a program. The contract options were negotiated at the time of award with pre-priced line items. Is the contractor still eligible for the exercising of the options and the task orders for ordering the pre-priced service line items and obligation of the actual funds for those line items? 13 CFR 124.514 Exercise of 8(a) options and modifications, (b)Priced options. The procuring activity contracting officer may exercise a priced option to an 8(a) contract whether the concern that received the award has graduated or been terminated from the 8(a) BD program or is no longer eligible if to do so is in the best interests of the Government. BUT does the FAR agree?


    Answer

    FAR 19.804-6(b), states, "An 8(a) contractor may continue to accept new orders under the contract, even if it exits the 8(a) program, or becomes other than small for the NAICS code assigned to the contract." 

    FAR 19-816(a), states, "except as provided in paragraph (c) of this section, when a contractor exits the 8(a) program, it is no longer eligible to receive new 8(a) contracts.  However, the contractor remains under contractual obligation to complete existing contracts, and any priced options that may be exercises."

    So, yes the FAR is consistent with the SBA in this matter.



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