52.217-4 is the evaluation of base and options exercised at time of award, however does that mean we cannot exercise the unevaluated options later? i.e. There are a base and four options. We evaluate Base Item and Option Item 0001 and award them. Can we exercise the unevaluated options (options items 0002, 0003, and 0004) with in the allowable time of the solicitation per 52.217-7 -- Option for Increased Quantity -- Separately Priced Line Item.
First of all, please note that both 52.217-4 and 52.217-5 are not clauses, they are provisions that would only go in your solicitation, not the resultant contract. It seems, based on what you have described that you would need BOTH provisions, 52.217-4 and 52.217-5, in your solicitation. The conditions at the prescription for 52.217-4 seem to fit the conditions you have described relative to the first option that you intend to exercise upon contract award. In addition, including 52.217-5 seems to fit the conditions relative to the subsequent options (0002, 0003, and 0004). However, please note that 52.217-5 does not say that the Government will not evaluate the options, it says the Government “will evaluate offers for award purposes by adding the total price for all options to the total price for the basic requirement……[but] will not obligate the Government to exercise the option(s).”
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In short, the options MUST be evaluated at some point. Prior to exercising any of them, in accordance with FAR 17.207(c)(3), it must be determined (among other factors) that “the exercise of the option is the most advantageous method of fulfilling the Government’s need, price and other factors (see paragraphs (d) and (e) of this section) considered.” This determination cannot be made if the options have not been evaluated.
If you are simply going to put the additional options on contract with a not-to-exceed price specified and try to evaluate and negotiate firm prices prior to exercising them, that would require a bilateral modification and you don’t really have a true “option.” Finally, FAR 17.206(b) does allow for not evaluating option quantities in specific scenarios where it would not be in the Government’s best interest, but it requires a determination to be approved at a level above the contracting officer. Additionally, the sample circumstance provided in such a scenario would still require that the option prices be determined to be fair and reasonable IF in fact they did end up being exercised in accordance with the already mentioned requirements of 17.207.
As always, keep in mind that this answer is strictly advisory in nature and you should be sure to consult your contracting officer and program attorney regarding your question, as they are most familiar with your specific acquisition.