Wifcon.Forum Archives

To Contents	Exercising an Unpriced Option
By Big Al on Friday, September 27, 2002 - 11:15 am: If a T&M contract is awarded with a base period and several unpriced option periods, what must the CO do to award one of the options? Is it necessary to compete the options, or can he/she just solicit prices from the contractor and make a determination that the prices are fair and reasonable? By Vern Edwards on Friday, September 27, 2002 - 12:05 pm: See FAR § 17.207(f). In order to exercise an unpriced option you must either conduct a new competition or write a sole source justification. By Big Al on Friday, September 27, 2002 - 12:54 pm: Vern, what if the contractor is asked for prices prior to exercise of the (previously unpriced) option, and the CO, IAW 17.207(d)(2), determines through an informal analysis of prices or an examination of the market that the (proposed) option price is better than prices available in the market or that the option is the more advantageous offer. Is that sufficient for exercise? By Anon on Friday, September 27, 2002 - 01:03 pm: I thought CICA effectively made the use of unpriced options a no-no. Have I missed something? By Vern Edwards on Friday, September 27, 2002 - 01:14 pm: Big Al: In my opinion, that would not solve the problem. The problem is not just determining whether or not the option prices are fair and reasonable. FAR § 17.207(d) says: "To satisfy requirements of Part 6 regarding full and open competition, the option must have been evaluated as part of the initial competition... ." An unpriced option cannot have been evaluated as part of the initial competition. All that you are proposing is to conduct a sole source procurement. Can you justify buying the services sole source? By Big Al on Wednesday, October 02, 2002 - 09:14 am: Thanks to all for the enlightenment.

Exercising an Unpriced Option

By Big Al on Friday, September 27, 2002 - 11:15 am:

If a T&M contract is awarded with a base period and several unpriced option periods, what must the CO do to award one of the options? Is it necessary to compete the options, or can he/she just solicit prices from the contractor and make a determination that the prices are fair and reasonable?

By Vern Edwards on Friday, September 27, 2002 - 12:05 pm:

See FAR § 17.207(f). In order to exercise an unpriced option you must either conduct a new competition or write a sole source justification.

By Big Al on Friday, September 27, 2002 - 12:54 pm:

Vern, what if the contractor is asked for prices prior to exercise of the (previously unpriced) option, and the CO, IAW 17.207(d)(2), determines through an informal analysis of prices or an examination of the market that the (proposed) option price is better than prices available in the market or that the option is the more advantageous offer. Is that sufficient for exercise?

By Anon on Friday, September 27, 2002 - 01:03 pm:

I thought CICA effectively made the use of unpriced options a no-no. Have I missed something?

By Vern Edwards on Friday, September 27, 2002 - 01:14 pm:

Big Al:

In my opinion, that would not solve the problem. The problem is not just determining whether or not the option prices are fair and reasonable. FAR § 17.207(d) says: "To satisfy requirements of Part 6 regarding full and open competition, the option must have been evaluated as part of the initial competition... ."

An unpriced option cannot have been evaluated as part of the initial competition.

All that you are proposing is to conduct a sole source procurement. Can you justify buying the services sole source?

By Big Al on Wednesday, October 02, 2002 - 09:14 am:

Thanks to all for the enlightenment.