Can the Contractor enter into the CBA agreement in the middle of an option period? Or, does the CBA Agreement take effect when the next option period is exercised?
Let me first assume that you are referring to a contract covered by the Service Contract Act of 1965 and that the contract contains the Federal Acquisition Regulation (FAR) clause at FAR 52.222-41 Service Contract Act of 1965 (Nov 2007). In that clause at sub-paragraph (m) it states:
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"(m) Collective bargaining agreements applicable to service employees. If wages to be paid or fringe benefits to be furnished any service employees employed by the Government Prime Contractor or any subcontractor under the contract are provided for in a collective bargaining agreement which is or will be effective during any period in which the contract is being performed, the Government Prime Contractor shall report such fact to the Contracting Officer, together with full information as to the application and accrual of such wages and fringe benefits, including any prospective increases, to service employees engaged in work on the contract, and a copy of the collective bargaining agreement. Such report shall be made upon commencing performance of the contract, in the case of collective bargaining agreements effective at such time, and in the case of such agreements or provisions or amendments thereof effective at a later time during the period of contract performance such agreements shall be reported promptly after negotiation thereof."
Therefore, the contractor can, of course, enter into a Collective Bargaining Agreement (CBA) at any time before or during contract performance as the clause indicates. The requirement is to "notify the Contracting Officer promptly." The Contracting Officer must then determine the resultant impact to the contract and make any necessary adjustments required. Sub-paragraph (c) "Successor contracts." of the clause does provide some guidance which the Contracting Officer may use in making the determination, however, consultation with legal counsel is also strongly recommended.