Can you extend a FFP LOE contract unilaterally using the Extension of Services Clause as a bridge to a competitive contract still in source selection? Our situation fits what is described in FAR 37.111. Basically, we want to keep everything the same but my question is how do I determine "the same" in terms of level of effort and still execute unilaterally? Would we need to get a monthly baseline by taking the previous PoP (6 months) and divide by 6 to get the average number of hours per month so that we can formulate an appropriate and agreeable month or 2-month extension? My thought is that we ask for pricing from the contractor in monthly intervals clearly stating to the contractor we want to extend services at current levels, meaning current labor categories and current monthly hours. We can then specify we want the proposal to remain valid for a period of 6 months so that we can refer back to it still under authority of 52.217-8. This way we can execute a unilateral modification without relying solely on monthly averages as our baseline.
Yes, the clause at FAR 52.217-8 is suited for unilaterally extending your contract for a period of up to six months. You are correct with your intention to "keep everything the same," as the clause states "continued performance of any services within the limits and at the rates specified in the contract." You already know what rates to use, but the "limits" are not as straightforward. Your idea of determining the average number of hours over the past six months of performance is sound and defensible.
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Note that any extension of an existing contract without obtaining full and open competition must be supported by a Justification and Approval per FAR Subpart 6.3. A J&A would not be required for the exercise of an option if the essential terms of the option were agreed upon, and the option was evaluated, at the time of award of the basic contract. However, that is not the case in your situation.