Thanks for this interesting discussion. The best place to start for any questions related to options is FAR subpart 17.2. Of special note, be sure to make the determination described at FAR 17.207(c) prior to exercising any option and that it was synopsized (in accordance with FAR part 5) when the contract was originally awarded. The answer to your question about whether or not the customer has to exercise all the CLINs is ‘No.’ Option CLINs are just that, an Option for the Government. But before any option exercise is done, before you document the determination I’ve already mentioned. Additionally, because you are working with a task order contract, you’ll want to find the basic contract under which the orders are being issued. Within that contract, specifically section F - Deliveries or Performance, you should find answers to most of the questions you have regarding option exercise timelines and POPs. You might also want to consult section H, Special Contract Requirements, to see if there are any unique terms and conditions under your contract that may pertain to your questions. Finally, don’t forget to look in section I – Contract Clauses and understand all of the FAR and DFARS clauses from FAR part 17 and DFARS part 217 that may be in your contract. Good luck!
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