17.208 Solicitation provisions and contract clauses
Source: FAR 17.208 on acquisition.gov
FAR 17.208 mandates the inclusion of specific option-related clauses in solicitations and contracts to ensure proper evaluation and exercise of contract options.
Overview
FAR 17.208 prescribes the specific solicitation provisions and contract clauses that must be included when options are used in government contracts. It details which FAR clauses to insert based on the type of contract, the likelihood and timing of option exercise, and whether the contract is for goods or services. The section ensures that both the government and contractors understand how options will be evaluated and exercised, and that contracts are structured to allow for flexibility and compliance with federal acquisition policies.
Key Rules
- Evaluation of Options Provisions
- Use FAR 52.217-3, 52.217-4, or 52.217-5 in solicitations with option clauses, depending on whether options are likely to be exercised and when.
- Option for Increased Quantity (Goods)
- Insert FAR 52.217-6 or 52.217-7 for goods contracts when options are for increased quantities, either as a percentage or as a separately priced line item.
- Option to Extend Services
- Use FAR 52.217-8 in service contracts when an option to extend services is appropriate.
- Option to Extend the Term of the Contract
- Use FAR 52.217-9 when the contract may require preliminary notice, extension of options, or a limit on total contract duration.
Responsibilities
- Contracting Officers: Must determine which option clauses apply, document likelihood of option exercise, and ensure correct clauses are included in solicitations and contracts.
- Contractors: Should review solicitations for applicable option clauses and understand their implications for pricing and performance.
- Agencies: Oversee compliance with clause inclusion and documentation requirements.
Practical Implications
- This section ensures clarity and consistency in how options are handled in federal contracts, reducing disputes and misunderstandings.
- Contractors must pay close attention to which option clauses are included, as they affect evaluation, pricing, and contract performance.
- Common pitfalls include failing to include the correct clause or not documenting the rationale for option exercise, which can lead to compliance issues.
(a) Insert a provision substantially the same as the provision at 52.217-3, Evaluation Exclusive of Options, in solicitations when the solicitation includes an option clause and does not include one of the provisions prescribed in paragraph (b) or (c) of this section.
(b) Insert a provision substantially the same as the provision at 52.217-4, Evaluation of Options Exercised at Time of Contract Award, in solicitations when the solicitation includes an option clause, the contracting officer has determined that there is a reasonable likelihood that the option will be exercised, and the option may be exercised at the time of contract award.
(c) Insert a provision substantially the same as the provision at 52.217-5, Evaluation of Options, in solicitations when-
(1) The solicitation contains an option clause;
(2) An option is not to be exercised at the time of contract award;
(3) A firm-fixed-price contract, a fixed-price contract with economic price adjustment, or other type of contract approved under agency procedures is contemplated; and
(4) The contracting officer has determined that there is a reasonable likelihood that the option will be exercised. For sealed bids, the determination shall be in writing.
(d) Insert a clause substantially the same as the clause at 52.217-6, Option for Increased Quantity, in solicitations and contracts, other than those for services, when the inclusion of an option is appropriate (see 17.200 and 17.202) and the option quantity is expressed as a percentage of the basic contract quantity or as an additional quantity of a specific line item.
(e) Insert a clause substantially the same as the clause at 52.217-7, Option for Increased Quantity-Separately Priced Line Item, in solicitations and contracts, other than those for services, when the inclusion of an option is appropriate (see 17.200 and 17.202) and the option quantity is identified as a separately priced line item having the same nomenclature as a corresponding line item.
(f) Insert a clause substantially the same as the clause at 52.217-8, Option to Extend Services, in solicitations and contracts for services when the inclusion of an option is appropriate. (See 17.200, 17.202, and 37.111.)
(g) Insert a clause substantially the same as the clause at 52.217-9, Option to Extend the Term of the Contract, in solicitations and contracts when the inclusion of an option is appropriate (see 17.200 and 17.202) and it is necessary to include in the contract any or all of the following:
(1) A requirement that the Government must give the contractor a preliminary written notice of its intent to extend the contract.
(2) A statement that an extension of the contract includes an extension of the option.
(3) A specified limitation on the total duration of the contract.