Given that options are used to obtain prices in a competive environment for purchasing "more of the same," can a contract for Air Craft contain an option for the simulator for that Air Craft? Basically how far can the definition on an option be stretched? Can it all be considered a contract for a weapons system and since the simulator is part of the weapons system can the option then be considered more of the same? Or is this a bridge too far?
You are correct--normally options are used to obtain prices in a competitive environment for purchasing "more of the same". However, FAR 17.202(c)(3)(ii) does permit the use of an option if competition for the option is impracticable once the initial contract is awarded. FAR 17.205(a) requires the contracting officer include written justification in the contract file. The contracting officer determination should follow FAR 17.2. Prior to including an option, it is prudent to consider if it is reasonable that the Government will exercise the option. Will the option be the most advantageous method of fulfilling the Government's need for a simulator when that need arises, i.e. a new solicitation at that time would not produce a better price or entail additional competition? Options generally obligate the contractor to a firm pricing structure in out years. Is it reasonable that offerors could develop a firm price for a simulator prior to development of the weapon system? The most important limitation on the use of options is the provision that they should not be used if adequate competition can be obtained when the future requirements are ascertained.
Open full Question Details
You state that you are writing a RFP, do you have an approved Acquisition Plan? Your approved Acquisition Plan must include approval of a simulator and an option. You must also consider how the option will be evaluated in the Evaluation Criteria in Section M. An option should not be included in an RFP as a afterthought--it should be included in the acquisition strategy process prior to writing the RFP.