Options Question

nkd9 said:

Is this an acceptable use of options?

Yes.

nkd9 said:

The customer wishes to award as many options as funding allows at date of award. Whatever available funding does not cover, they are hoping to keep as options for future use.

Do not move to quickly on a "yes".  Your post implies services.  A specific answer depends on the view of whether the services are severable versus nonseverable.  Likewise is funding 1 year or otherwise.  The quoted portion of your post (above) implies possible manipulation of phases for funding reasons and not a true severable service.

I suggest discussing further within your agency, including legal counsel.  

Here is a document from the VA that might help with my suggestions. Internet search on severable versus unseverable will also help.

https://www.va.gov/oal/business/pps/flash12-19.asp

To answer C Culham- Yes this is for services, though each task is the same service. This project is dependent upon another that is taking place at the same time, so I've been told quantities specified might need to change as time goes on. If the other project takes longer, we'll need the services for longer. Funding is 2 year. 

I think I'll advise the customer that we use a single option line. Something like "up to 12 months" of this service. Then I'll utilize the Option for Increased Quantity- Separately Priced Line Item and tailor it to fit my needs. 

Thoughts on this approach?

nkd9 said:

Thoughts on this approach?

Funding ...1 year or?

Severable or none?

Project?

PBSC

All rhetorical or in other words all facts would dictate an approach.  Our hope (apologies for speaking for the forum) is that comments will help you pick the best approach that fits the facts.

On ‎7‎/‎25‎/‎2019 at 3:18 PM, nkd9 said:

The customer wishes to award as many options as funding allows at date of award. Whatever available funding does not cover, they are hoping to keep as options for future use.

Is this an acceptable use of options?

nkd9, 

As others have stated, there is a lack of information provide for a detailed response. 

To add to those, why are options the preferred course for the contract formulation? I am guessing it is because the customer wants the option to get out of the contract is one of the phases does not go the way they plan/hope/want?

Use of an option implies severability (at least between the base and option), which could make obligation of future FY funds problematic. Even assuming you can use current funds for up to a year of severable services (e.g. DOD) I think use of current year funds to exercise an option with a period of performance that begins in a future FY would be a bona fide needs rule violation. For DOD, 10 USC §2410a says the you "may enter into a contract [...] for a period that begins in one fiscal year and ends in the next fiscal year if (without regard to any option to extend the period of the contract) the contract period does not exceed one year." I think since options are excluded from what constitutes a year (otherwise the entire contract, options included, could only last a year) then options should be excluded from determining that the period of performance has begun in the current year.

Of course, if you know prior to award of the base that you want to exercise the option, then you could just add it to the base period and not call it an option at all. If, as I suspect, you cannot do this because the requirement for the option will be developed during the base, then use of a fixed-price option isn't really appropriate anyway, regardless of FY.