Concerning recently started debate in contracting office. The scenerio is a task order under an existing contract. The contract is for a base plus option years. The contract contains the option clause. A Task Order awarded under the contract contains a base period plus options. Now the question. Can a CO set up their own terms for exercising the option on the task order or do they have to abide by the terms in the underlying contract, i.e., preliminary notice. One group contends that the options clause is only for exercising options of the Contract and therefore can set different conditions for task orders and the other group says you must adhere to the options clause in the task order. What do you guys think?

By joel hoffman on Tuesday, May 14, 2002 - 04:28 pm:

Is the task order to be negotiated? If so, can you establish different criteria for the task order options? Why not? happy sails! joel

By Vern Edwards on Tuesday, May 14, 2002 - 05:25 pm:

Anonymous:

I think that you can establish separate terms for exercising option(s) within task orders. Why not?

When writing the task order option(s) be sure to state that the exercise of the option(s) are not governed by the option clause in the contract, (e.g., "Notwithstanding any other clause in this contract, including the clause at FAR § 52.217-9, Option to Extend the Term of the Contract, the Government may... "). Get it?

The option rules in FAR Subpart 17.2 may apply, depending on the nature of the acquisition. See FAR § 17.200. Also, take a look at FAR § 52.216-22, paragraph (d), and make sure that the task order option terms are consistent with the time limitation in that paragraph on the contractor's obligation to make deliveries.

By Smokey on Wednesday, May 15, 2002 - 02:45 pm:

I must be missing something....what is the advantage of options on a task? Why not just issue another task...saving the time and effort of establishing separate terms and having to administer them?

By Anon2U on Wednesday, May 15, 2002 - 04:20 pm:

Smokey

So you don't need to do another competition or to rejustify the sole source.

By Smokey on Wednesday, May 15, 2002 - 05:48 pm:

Anon2U....huh? Do you mean the mini competition on mulitple awards and source directed tasks? If you don't, then I would suggest this is not proper under the conditions you mention.

By Anon2U on Wednesday, May 15, 2002 - 10:47 pm:

Yes, I mean the mini competitions which although they sound simple, can become complicated and drag on for a lot longer than I ever anticipated. If I can avoid doing that every year, I will sure do it.

Plus we have several very detailed and unusual statements of work that were hard to staff with an extensive learning curve. The cost of ever changing contractors would be in the hundreds of thousands of dollars. 5 years were definitely needed.

By Vern Edwards on Thursday, May 16, 2002 - 09:23 am:

Anon2U:

If the nature of the work is such that it is impractical to change contractors from task order to task order, perhaps in future you should not make multiple awards for that kind of work. See FAR § 16.504(c)(ii)(B), especially subparagraphs (2), (3), (4), and (6). Note the language: "The contracting officer must not use the multiple award approach if..." Underlining added.

Multiple awards of task order contracts are not strictly mandatory. The government's policy is to make multiple awards only when it makes sense to do so.

By Anonymous on Thursday, May 16, 2002 - 11:51 am:

Vern (5/16/02 @ 9:23)
The underlying contract might be FSS MAS contract. In that scenerio you might award multple year or, if appropriate, Option periods on the Task Order. By the way I'm the original poster of this thread and would like to have your option on my original post. Thanks.

By Anonymous on Thursday, May 16, 2002 - 01:48 pm:

Sorry Vern I see your answer above. Must have been having a senior moment. Disregard my last message.

By Anon2U on Thursday, May 16, 2002 - 06:43 pm:

Vern,

Yes, the task order is against a GSA FSS. We have weighed competing a single award contract but the task order is working out fine now so we have other fish to fry.

By Vern Edwards on Thursday, May 16, 2002 - 07:14 pm:

Anon2U:

I have never been clear on how options work in orders against GSA schedules, so I'm not sure that my earlier comments to Anonymous apply in your case.

What is the rule, anyway? Is it okay to include options in orders against GSA schedules? I suppose that it is; I've never seen anything that says you can't do it.

Vern

By anon2C on Friday, May 17, 2002 - 10:39 am:

We’ve used options on Task orders, including a few with multiple award contracts. Some examples:
A prototype for lab testing with options for two additional (more developed) prototypes for field-testing.

A prototype for lab testing with options to modify the prototype for flight test.

A prototype with options for minimum “first production run” quantities

And 1 unit with options for additional units (in case the first one was damaged/destroyed in flight tests).

In all of the above (and in others) there is no intention of avoiding reasonable competition - but neither is the Government interested in paying redevelopment/tooling/ etc costs more than once. Could we have written a second Task Order rather than use options? Yes, but why? The options are clearly related to the base and the costing information; etc (these were all CPFF) was available sufficiently to do everything at time of award. Further, separating costs from the base/options is less of a problem in one TO vs. separating costs from 2 independent TOS. And there is, contrary to popular opinion, more admin cost/effort in writing 2 TOs than there is in one TO with options. In some of the examples above, a phased system was considered but due to funding or other reasons, was not used.

By joel hoffman on Friday, May 17, 2002 - 03:37 pm:

anon2c, your examples look like perfectly legitimate and sound use of options on task orders. happy sails! joel