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    However, it is not clear to me if exercising a -8 requires creating a new set of CLINs or whether the PoP for the option period preceding the -8 can just be extended. Given that a -8 might not be exercised at the end of the final option period, I am not sure how you would add CLINs for the -8 prior to exercising them... or what quantities to include since the PoP cannot be anticipated in advance. Because the pricing of the preceding option period is applies to the -8, which is why I included all that information at the start, and the clause talks about "extending", it seems to me the PoP of the existing CLINs can be extended. Would the answer depend on the length of the PoP of the preceding option period; e.g. not all PoP's are 12 months? Someone pointed out that there could be fiscal law concerns should a PoP exceed 12 months. In practice: 1) I have extended only IDIQ/Requirements contracts. Funding is at the task order level... so the color of money is not a concern. Also, USACE funds are civil works and does not expire. If a new PR&C were required, perhaps a new set of CLINs would also be required. Or could funds merely be added to the existing PR&C? 2) When a CLIN price has been adjusted due to the incorporation of new wage determination... we have retroactively modified the contract to add a CLIN for the lump sum difference after the PoP is complete and we know exactly how many services were performed and what we owe. If we had to calculate this in advance, I guess new CLINs would have to be added at the new price? In summary: extend current CLINs PoP or add a new set of CLINs; is there a fiscal issue with extending the PoP on certain types of contracts; are there nuances to civil works monies that offer flexibility that OMA and other funds do not?


    Answer

    Read FAR 37.111 Extension of Services to understand the purpose and basis for using FAR Clause 52-217-8, Option to Extend Services.  It states the following:

                  Award of contracts for recurring and continuing service requirements are often                   delayed due to circumstances beyond the control of contracting offices. Examples               of circumstances causing such delays are bid protests and alleged mistakes in                   bid.  In order to avoid negotiation of short extensions to existing contracts, the                     contracting officer may include an option clause (see 17.208(f)) in solicitations                     and contracts which will enable the Government to require continued performance               of any services within the limits and at the rates specified in the contract.                             However, these rates may be adjusted only as a result of revisions to prevailing                   labor rates provided by the Secretary of Labor. The option provision may be                         exercised more than once, but the total extension of performance thereunder shall               not exceed 6 months.

    Based on your background information, sounds like you've taken appropriate steps such as including the dash 8 clause and associated verbiage for evaluating the option in the solicitation.  I, also, agree with you that the rates to be used for the "continued performance" under the dash 8 clause should be the current rates in effect at the time of the extension. With regard to whether or not a new CLIN needs to be established for exercising the dash 8, I have not seen it done that way.  Normally, as you've already stated, the current rates that are in effect are used for the dash 8 extension, so the existing CLIN is just extended. 

    However, the GAO decision in Major Contracting Services, B-401472 (2009), created quite a bit of controversy about this very topic ( (namely, should a separate dash 8 CLIN be created for pricing purposes).  In fact, this GAO case was the reason that many agencies, such as yours, started including verbiage in the solicitation concerning the evaluation of the dash 8 option.  The GAO stated that agencies must either evaluate the Dash 8 clause at time of award or do a J&A and evaluate price at the time the agency exercises the option.  Despite the GAO case, DoD has not come out with any overarching policy to clarify proper usage of the dash 8 or the mechanics of how it should work contractually (such as the CLIN structure). 

    In terms of the funding part of your question, “No year” funds remain available until expended (or rescinded and taken back by Congress). So clearly, no year funds offer greater flexibility.

    Funds have to be in the Current Phase of their Appropriation Life-Cycle in order to be obligated for new work.  In addition, OMA funds are only Current for one year, although for service contracts that year could be 12-months that cross fiscal years (ref: 10 USC 2410a). RDT&E is incrementally funded for efforts that will occur for either of the two years of its Current Phase. For both RDT&E and Procurement funded service contracts, the PoP cannot extend past the last day of the appropriation's Current Phase.

    If the only thing that is being done is extending the PoP to allow the contractor more time to complete the current work (i.e. no new work), then simply adding USACE funds, which are for civil works and do not expire, to an existing CLIN makes sense.  However, if the reason for the PoP extension, is to allow time for unanticipated, additional work (i.e. new) to be completed, creating a new CLIN that defines that new work with its associated PoP is appropriate in order to be able to track the work against the funds for audit purposes.

    Bottom line: I think whatever you decide to do will be fine as long as it's reasonable and consistent with the solicitation and the contract.  One question I think is just as important to ask is what's the reason driving your agency to extend the services with the dash 8 clause under the existing contract.  The FAR verbiage is pretty clear that it's supposed to be used for circumstances beyond the control of the buying office.  If the circumstances are for reasons not beyond your office's control, then such an extension might be construed as out of scope in which case a J&A would also be needed.  Finally, any decision regarding the CLINs on the contract need to also take into consideration your Service policy, agency policy letters, and ultimately your Contracting Officer.

     

     

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