Option Period Overlap

Not if you are ordering the same services. You have to order the services for the first year option using the pricing of the first year option. You cannot use the base year pricing to order option year services through an extension of the base year.

There was a recent Board or CoFC decision on this, but I forget where. I just remember the outcome.

H2H

It's an audit, so it's non-severable services. They need more time to finish the first year audit but want to keep the second year audit on track. The pricing for the first year option would be based on the option prices as awarded, while the extension of services would be based on base year pricing.

• Your contract is for a first-year audit and a second-year audit.

• For the first-year audit, your contract has a base period of performance months 1-12 and already includes an option for additional months 13+ as needed.

• For the second-year audit, your contract has an option period of performance months 13-24.

If all of the above is true, then yes, you can exercise both options at the same time; provided you comply with whatever notice and timeliness requirements are in your contract, as well as your color of money rules.

I don't understand this at all. You want to extend the contract under the -8 clause and simultaneously extend the contract under the -9 clause? What is that supposed to accomplish? Will the two extensions run concurrently? What are you trying to do?

The contractor couldn't finish the work of the base year within the period of performance, so you want to use the -8 clause to give him more time to finish that work while using the -9 clause to extend the contract for new work. Is that it?

"They need more time to finish the first year audit but want to keep the second year audit on track."

This is how I interpret the situation: The contractor couldn't finish one year's worth of work in one year, but you want to get the contractor started on Year 2 now, so that it can work CONCURRENTLY on both Year 1 and Year 2 work without slipping the Year 2 schedule.

You know that sounds insane to the average person, right?

H2H

The OP hasn't told us enough. Everything depends on the nature of the services and on how the contract is written.

The OP told us that the services are non-severable. Now suppose that the contract includes two line items for non-severable services:

0001 Service

0002 Option service

According to the OP, the contractor could not complete the 0001 service within the period of performance and the government wants to give the contractor more time to do so. It also wants to exercise an option to buy the 0002 service. That should not be a problem if the contract was written properly. There should be no problem with extending the period of performance for the 0001 service while at the same time exercising an option to buy the 0002 service.

But was the contract written properly?

If the OP's contract is for non-severable services and includes the 52.217-8 and 52.217-9 option clauses, it includes the wrong clauses. Those clauses were meant for use in contracts for severable services and are inappropriate in contracts for non-severable services. The -8 clause should not be in the contract, and Instead of the -9 clause the contract should include a clause substantially the same as 52.217-7, Option for Increased Quantity -- Separately Priced Line Item for use to buy the 0002 service.

In order to extend the period of performance for the 0001 non-severable service the proper approach would be for the government to negotiate a time extension based on some contract clause or by mutual agreement with appropriate consideration. It is not appropriate to do so by exercising a -8 option. Exercising the 0002 option should be a separate matter entirely.

ab535, you say the work entails an audit. Who is being audited, a government entity or a private entity? Why was the audit not completed on time? Could the failure to complete on time be an excusable delay?

If the CLIN 001 work was not completed within the PoP, the government should not extend the Period of Performance. It should issue a cure notice and prepare for TforD. (Unless, of course, the contractor has an excusable delay argument in its back pocket. as Retreadfed noted.)

Assuming there is no exusable delay, it seems to me that the government has waived the audit report delivery date -- or would like to. And the government wants to reward the contractor for its nonperformance by exercising the option year.

In my view, this is not a matter of "can we do it" -- because Vern has explained how it might be done -- but instead, it's a matter of "what are we doing here"?

Unless there is more to the story (and isn't there always?), what "we are doing here" seems to be working hard to reward a poor performing contractor.

H2H

How would the clause 52.217-7 be used? The prescription says... "other than those for services."?

Reason I ask, I tried to use that clause recently on a service contract and was told I couldn't use it. Wondering what your argument would be for using it.

FAR Subpart 17.2 is old and predates the growth of services acquisition. The option for increased quantities clause (the -7 clause) was written for supply contracts. You don't extend the term of supply contracts with an option clause; you use an option clause to buy additional supplies.

The standard option clauses for service contracts reflect the need to extend ongoing severable services, not the need to purchase additional services. That's because whoever wrote 17.2 didn't anticipate the use of options to buy additional services (e.g., a second, separate audit). FAR 17.2 does not forbid the use of such options. It's just silent.

If my analysis of ab535's situation is correct, he doesn't want to extend ongoing severable services. He wants to (a) give the contractor more time to complete a non-severable service and ( b ) buy an additional service (a second, separate audit). In that case he should not use the -8 option to give the contractor more time to complete the first service, because that's not what it's designed to do. He should use an option to buy additional services (the second audit), not the -9 clause, but it's for extending ongoing severable services.

Nothing in FAR prohibits a CO from adapting the -7 option clause for use in services contracts. I did it 30 years ago. Don Mansfield would argue that what I would do is a deviation, but I think that's too narrow an interpretation of FAR and of the concept of deviation.

Who cares what Don Mansfield thinks?

It is clearly permissible for contracts to include options to buy additional services as well as options to extend ongoing severable services. See FAR 17.202 and 17.204. However, while FAR prescribes a clause for options to buy additional quantities of supplies and to extend the performance of services, it prescribes no such clause for the purchase of additional services. Thus, a CO who wants to put an option to buy additional services in a contract must write a clause.

Use a clause like the following for options to buy additional services (as opposed to options to extend presently provided severable services). Don't use any FAR clause citation or date, because the clause does not come from the FAR.

Option for Additional Services

The Government may require performance of the service designated in the Schedule as Option Line Item [insert CLIN number] by sending written notice to the Contractor no later than [insert date].

Performance of the service shall be (1) as specified in Attachment X, "Statement of Work for Option Line Item 0002"; (2) as described in Section F of this contract; and (3) in accordance with the other terms of this contract, which shall continue in effect throughout option performance, except as the parties otherwise agree in writing.

You can put the clause in UCF Section B, as part of the option CLIN description, or in Section H. If buying commercial items you can put it in the option CLIN description or in an addendum to FAR clause 52.212-4.