Sign In
  • Question

    My questions are, can I exercise the option on the contract coming close to the $50 million threshold early without exercising the options for the three other contracts? If so, will I still be able to exercise the options on the three remaining contracts in 2013 once the base period has ended? If this is not possible and we must exercise all of the options early, would the remaining value on the three other contracts transfer to the option period?


    Answer

    Yes, you can exercise the option for one contractor without concurrently doing so for the others. The requirements for exercising an option are unique to each contract, and don't depend on what's going on with other contracts issued from the same solicitation. Note that you won't be able to exercise the options on the three remaining contracts "once the base period has ended." If you want to unilaterally exercise the option, you need to do so before the end of the base period of performance. Otherwise, a bilateral agreement will be needed. 

    The rule is different for service contracts. FAR 17.204(d) permits the option exercise period to extend beyond the contract completion date (subject to the option exercise period stated in the contract/clause 52.217-9), but it doesn’t appear that yours is a contract for services. Regarding your second question, funds can only be moved from a base period to an option period if the requirements of the bona fide need rule are met. In other words, if you want to use the base period’s funding for the option period, you would have to be sure the work to be performed during the option period is the result of a need that arose during the base period. See the Acquipedia article on the Bona Fide Need rule at this link. Please consult with your organization’s funds manager for more information.


    Open full Question Details