Contracts
FAR 17.204 requires contracts with options to clearly define limits, exercise periods, and total duration, ensuring compliance with statutory restrictions and adequate planning for continuous performance.
Overview
FAR 17.204 outlines the requirements for structuring contracts that include options for additional supplies, services, or extensions of contract duration. It mandates that contracts clearly specify limits on quantities or duration, define the period during which options may be exercised, and ensure that contractors have sufficient lead time to maintain continuous production. For service contracts, option periods may extend beyond the original completion date to accommodate funding constraints. Generally, the total duration or quantity for contracts with options should not exceed five years, except for information technology contracts or where other statutes impose stricter limits. The regulation also provides flexibility in how options are expressed in contracts, such as by percentage, specific increases, or additional line items, and allows for extensions to be stated as amended completion dates or additional performance time.