Option Year
What is Option Year?
An option year is an additional performance period the government may exercise under a contract's terms. Its presence in the contract does not guarantee that the government will exercise it. The option provisions and applicable requirements govern the decision.
How to use it
Track the option terms, notice requirements, potential value, and actual exercise separately. Do not treat all option value as current funded work or guaranteed revenue. Coordinate assumptions with the contracts and finance owners.
Example
A contract includes a base year and four possible option years. The capture forecast can record the potential term, while the delivery plan distinguishes the current authorized period from future options.
Reference
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