Options
FAR Subpart 17.2 establishes strict requirements for the use, documentation, evaluation, and exercise of contract options to ensure they serve the government's best interests.
Overview
FAR Subpart 17.2 covers the policies and procedures for including and exercising options in government contracts. Options allow the government to acquire additional supplies or services, or extend the contract period, beyond the base contract terms. This subpart details when and how options may be used, requirements for including options in solicitations and contracts, documentation and evaluation procedures, and the process for exercising options. It also specifies the necessary solicitation provisions and contract clauses related to options. The subpart is structured to guide contracting officers through the lifecycle of options, from planning and solicitation to execution and administration, ensuring that options are used appropriately and in the government's best interest.
Key Rules
- Use of Options (17.202)
- Options should only be used when it is in the government's best interest and must be justified and documented.
- Solicitations (17.203)
- Solicitations must clearly state the terms and conditions of any options, including pricing and evaluation methods.
- Contracts (17.204)
- Contracts must specify the option periods, quantities, and procedures for exercising options.
- Documentation (17.205)
- Contracting officers must document the rationale for including and exercising options.
- Evaluation (17.206)
- Offers must be evaluated for both the base and option quantities or periods, as specified in the solicitation.
- Exercise of Options (17.207)
- Strict procedures must be followed to exercise options, including verifying that the option is still in the government's best interest and that funds are available.
- Solicitation Provisions and Clauses (17.208)
- Specific FAR clauses must be included in solicitations and contracts involving options.
Responsibilities
- Contracting Officers: Must justify, document, and properly administer options, ensuring compliance with all procedural requirements.
- Contractors: Must comply with option terms and be prepared for potential extension or expansion of contract scope.
- Agencies: Must oversee the use of options to ensure they are used effectively and in accordance with policy.
Practical Implications
- This subpart ensures that options are used strategically, not automatically, to provide flexibility while protecting government interests.
- It impacts contract planning, pricing, and administration, requiring careful documentation and evaluation.
- Common pitfalls include inadequate justification, improper exercise of options, and failure to include required clauses.