FAR 2.101(b) defines “Option” to mean a unilateral right in a contract by which, for a specified time, the Government may elect to purchase additional supplies or services called for by the contract, or may elect to extend the term of the contract. Under normal circumstances, you would not be able to exercise the option outside the terms of the contract. In your situation, although you no longer have the right to unilaterally exercise the option, there may be an opportunity to bilaterally exercise the option as well as revise the performance period of the contract. Performance impacts resulting from the COVID pandemic may be considered a “cause beyond the control and without fault or negligence of the Contractor”, or force majeure, and could provide grounds for relief in this case. We would typically see this used relating to Excusable Delays and Default under FAR 52.249-14, FAR 52.212-4(f), FAR 52.213-4(e), FAR 52.249-8, and DFARS 252.219-7009. Although these are referring to “contractor performance delays”, the rules may apply to delays in option period of performances as well if it’s in the interest of the Government. To reiterate flexibility during this time, Office of Management and Budget issued a memo on 20 March 2020, stating that “agencies should be flexible in providing extensions to performance dates if telework or other flexible work solutions, such as virtual work environments, are not possible, or if a contractor is unable to perform in a timely manner due to quarantining, social distancing, or other COVID-19 related interruptions.” Additionally, there are many Defense Pricing and Contracting (DPC) memorandums relating to COVID -19 contracting procedures for your reference as well. Finally, I suggest that you consult with your Contracting Officer and legal office for further guidance. There may be additional requirements/documentation that would need to be completed prior to completing this action.
DAU Acquipedia Article entitled “Options”
Defense Pricing and Contracting (DPC) COVID-19 Website
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