Failure to exercise an option in strict accordance with their terms raises issues of interest to both the government and the contractor. From the government`s perspective, the improper exercise of an option can be considered an invalid purchase from a single source disputed by a third party. From the contractor`s perspective, a contractor is not obligated to execute an option that has been exercised incorrectly. When this happens, the entrepreneur is faced with the question of whether to execute the option and, if so, he should request a reasonable adjustment to the price of the option. A defective exercise of an option is considered a breach of contract, which excuses the subsequent performance of the contractor. However, the Contractor may waive the breach by performance, and if it does so without protest, the Contractor may have waived its right to damages. However, if the contractor works in protest, he may be able to claim damages for injury. (b) The contract shall specify the period within which the option may be exercised. In addition to advance notice, the Government must notify the contractor in writing of the exercise of the option within the time limit set out in the contract. If notification of the exercise of the option is received late, this attempt to exercise the option will be considered invalid.

3. The period between the award of the contract containing the option and the exercise of the option shall be so short that it shall indicate that the price of the option is the lowest possible price or the cheapest offer. The contracting entity shall take into account factors such as the stability of the market and the comparison between the time elapsed since the award of the contract and the normal duration of contracts for those supplies or services. (g) In the amendment of the contract or in any other written document informing the contractor of the exercise of the option, the option clause shall be cited as the authority. (a) The Government may extend the term of this contract by written notification to the contractor within ___ [insert period within which the contract agent may make use of the possibility]; provided that the Government notifies the contractor in writing before the end of the contract of its intention to extend by at least ___ days [60 days, unless another number of days is inserted]. The notice does not require the government to extend it. Most of us have seen contracts that include options. However, many of us probably haven`t thought much about who they are and how exactly they`re supposed to work. This article is intended to provide information on these topics. (7) The performance of this Contract by the Contractor is acceptable, e.B has received satisfactory evaluations. If all these circumstances cannot be confirmed, the Contract Agent may not exercise the option.

Question 1. What is the effective date? When you exercise an option, the work is usually already done (this is the case in your situation). There is already a period of contractual performance. The current performance of the contract will be continued until the end of the contractually agreed period. You exercise the option at some point before the end of the performance period, as described in the terms and other terms of your contract. By exercising the option, you will reinstate the effective date in accordance with the terms and other terms of your contract. The effectiveness must already be specified in the option. You must not have different validity dates related to the same specific action/effort in a contract document. What would decide whether the government should create a contractual lawsuit with this error, the intention would be the first basis of the solution. Other documents such as the PWS, etc. can help determine what the intention was and what date is correct.

In the case of an option, the planned date is already specified in the existing contract and would therefore be the relevant date. If the contractor decides to contest, the burden of proof is on the government. The Government may increase the quantity of supply required in the list to the unit price indicated. The Contractor may exercise the option by written notice to the Contractor within 1 day. (3) The exercise of the option is the most advantageous method of meeting the needs, price and other factors of the government (see paragraphs (d) and (e) of this section); When the government did not have the funds to exercise the first full option year, it exercised FAR 52 217-8 three times for a total of six months when the funds became available. Glasgow claimed that 52-217-8s could only be used after all CLIN options had been exercised and “could not be used to create monthly option periods”. The contractor stated that it was only appropriate to invoke this clause “if there is a follow-up contract and the government must fulfill the performance between the established contract and the new contract”. The date of entry into force of an option should already be set in the Treaty. It must take place immediately after the end of the current performance phase, so that there is no interruption in performance.

The date of issue and signature must be identical or almost identical as far as possible. In the wording of the section, we must inform 60 days after the option is granted that the government intends to exercise its option. This written notice would usually be a letter (an email would suffice, although we prefer the signed letter for the file). (a) Unless otherwise approved by the Head of the Contracts Office, service contracts with option periods require the Contractor to receive prior written notice of the Government`s intention to exercise the option at least sixty (60) calendar days prior to the date of exercise of the option. Failing to provide such notice within the time limit set out in the contract, the Government waives the right to unilaterally exercise the option and requires the negotiation of an amendment to the bilateral treaty to extend the period of performance where such an extension is permitted. (c) the time limit shall be set in such a way as to allow the contractor a reasonable period of time to ensure continuous production. JRS` contract included culinary instructor services for the Department of Justice for a reference year ending August 7, 2012 with four optional years. The contract included certain experience and qualification requirements for each of the trainers. The contract contained the standard option clause of the Federal Acquisitions Regulations (“FAR”) as follows: (b) If the contract provides for an economic price adjustment and the Contractor requires a price review, the Contractor will determine the impact of the price adjustment under the option prior to the exercise of the option. The Government may require the continued provision of services within the limits set out in the contract and at the rates fixed in the contract. These rates may be adjusted only following revisions to the work rates in force by the Minister of Labour. The option provision may be exercised more than once, but the total extension of the benefit under this Agreement may not exceed 6 months. The Contractor may exercise the option by written notice to the Contractor within 1 day.

(a) The contract shall set the limits on the purchase of additional supplies or services or the total duration of the contract, including any renewals; The contract agent may exercise options only after it has established that virtually all of the State`s contractual options (for larger quantities of goods or for an expansion of services) are generally unilateral options that the Government may or may not exercise at the discretion of the Government. When exercising an option, the government must comply with the requirements of the option clause, but contractors cannot successfully complain about the government`s failure to exercise that option. JRS Management vs. The Department of Justice CBCA 3288 (May 28, 2014) is an excellent example of government discretion. (ii) the fixed or maximum amount of the fee may be determined using a formula contained in the basic contract (see, however, paragraph 16.102(c)); This answer is based on the information provided. If necessary, we recommend that you discuss this with your contract team, the program manager and/or the legal department. As we will explain in more detail below, options must be exercised in strict compliance with their terms. .