17.203
Solicitations
FAR 17.203 requires clear, fair, and compliant handling of options in solicitations, including proper clauses, pricing rules, and evaluation methods to ensure transparency and competition.
Overview
FAR 17.203 outlines the requirements for including options in government contract solicitations. It details how options should be presented, evaluated, and priced, ensuring transparency and fairness in the solicitation process. The section covers the inclusion of option provisions and clauses, the basis for evaluation (including or excluding options), pricing flexibility, and special circumstances where option prices must not exceed base prices. It also addresses how option values affect trade agreement thresholds and sets limits on option quantities unless higher quantities are approved at a higher authority level.
Key Rules
- Inclusion of Option Provisions
- Solicitations must include appropriate option provisions and clauses if the resulting contract will allow for options.
- Evaluation Basis
- Solicitations must state whether options are included in the evaluation for award and inform offerors if options may be exercised at award.
- Option Pricing
- Normally, there should be no price limitation on option quantities unless options are evaluated for award; varying prices for options are allowed if specified.
- Special Pricing Restrictions
- In unusual cases, solicitations may require option prices not to exceed base prices, especially if future competition is impracticable or options cannot be evaluated.
- Option Quantity Limits
- Option quantities for additional supplies are generally limited to 50% of the initial quantity unless a higher authority approves more.
- Trade Agreement Thresholds
- The value of options must be included when determining applicability of trade agreement thresholds.
Responsibilities
- Contracting Officers: Must ensure solicitations include proper option clauses, state evaluation methods, manage option pricing and quantities, and account for trade agreement thresholds.
- Contractors: Must comply with solicitation requirements regarding option pricing and quantities, and understand how options affect evaluation.
- Agencies: Must oversee compliance, especially when approving exceptions to quantity limits or pricing restrictions.
Practical Implications
- This section ensures clarity and fairness in how options are handled in solicitations, impacting pricing strategies and competition.
- Contractors must carefully review solicitation instructions on options to avoid disqualification or pricing errors.
- Common pitfalls include misunderstanding how options are evaluated or failing to comply with pricing and quantity restrictions.