Is the "status quo" a legally sufficient standing to exercise the final option to pay the contractor? We (the newbies) want to tell them no. The work is not needed on the Option CLIN, therefore should not be exercised just to pay them as ‘we’ did in the past. I have searched for case law in GAO for anything that says "status quo" means I have to do it that way, but I cannot find anything. IF we can or should exercise the option CLIN to pay them to be “status quo”, what is my legal standing that will allow that just so they can get paid even though the AF will not get the reports that the CLIN was intended to provide.
Generally, if an option is not exercised, the contractor is not due any compensation. However, if an option is exercised and the contractor provides a service or supply then payment is due. If the contractor does not provide either a service or supply, then they are not due compensation. To complete the contract or task/delivery order, there needs to be offer, acceptance, and consideration (by both parties).
In answer to your immediate question about 'Status Quo" arrangements, that is not covered by the FAR or DFARS. You are correct, that is a legal term and your questions would best be answered by your local or program legal office attorney.