My question is simple, or so I thought. Once the POP has passed, are you indeed not allowed to further extend the POP or modify the contract?
Once a contract has expired because the period of performance has passed, there is no longer a contractual relationship. The authorities within the contract, such as the Changes clause and Option to Extend the Term of the Contract clause, are no longer in effect. Extending the relationship with the contractor at this point would essentially be a sole source award of a new contract, and would require a Justification and Approval in accordance with FAR 6.3.
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Please consult your organization's legal counsel for more information on what constitutes a legally binding contract.