FAR 17 Special Contracting Methods

Question 1

What is Options?

Answer 1

An “option” is a unilateral right in a contract of the Government, for a certain period, choose to buy more supplies or services or extend the contract

Question 2

What to determine before excerising an option?

Answer 2

The contracting officer can exercise options only if:

1. Funds are available;
2. The option meets a Government need;
3. It’s the best way to meet the need, considering price and other factors;
4. The option was properly announced, unless exempted;
5. The contractor is not excluded in the System for Award Management;
6. The contractor’s past performance on other contracts is considered; and
7. The contractor’s performance on this contract has been acceptable.

Question 3

When it is not in the best interest of the Government to use Options?

Answer 3

1. When the foreseeable requirement involve minimum economic quantities and delivery requirements are far enough into the future to permit competitive acquisition.
2. The requirement can be satisfied by Indefinite quantity/requirements contract.
3. Contractor will incure undue risks.
4. Market prices are likely to change substantially.
5. The options represents known requirements for which the funds are available.

Question 4

What are the options clauses?

Answer 4

There are 4 option clauses, 2 for supplies, 2 for services:

1. FAR 52.217-6, Option for Increased Quantity: when option quantity is expressed as a percentage of the basic contract quantity or as an additional quantity of a specific line item
2. FAR 52.217-7, Option for Increased Quantity – Separately Priced Line Item: when option quantity has a separately priced line item having the same nomenclature as a basic line item
3. FAR 52.217-8, Option to Extend Services: when you want to protect against potential issues with awarding new contract; this allows extension of services up to 6 months as a “stop-gap”
4. FAR 52.217-9, Option to Extend the Term of the Contract: when the contract includes option years, this clause is used to exercise them

Question 5

What is Undefinitized Contract Action (UCA)?

Answer 5

UAC action is a contract, including modifications, where the terms, specifications, or price are not agreed upon before starting work.

Question 6

When is UCA used?

Answer 6

Used when the Government needs to start contract work immediately, and there’s no time to finalize the contract details

Question 6

Whose approval is required for UCA?

Answer 6

SCO if $50M or more. COCO if less than $50M.
Ref. DAFFARS MP 5301
Ref. DFARS 217.7404-1

Question 7

What is DoD policy for UCA?

Answer 7

UCA shall only be used:
1. There’s not enough time to finalize a contract to meet the Government’s needs.
2. The Government needs an immediate commitment to start the work.
3. UCA should be as detailed (complete and definite) as possible given the situation.

Ref. DFARS 217.7403

Question 8

What shall the UCA approval package include?

Answer 8

a. Document why a UCA is needed.
b. Explain why work must start before finalizing the contract.
c. Address how delays in starting work would negatively affect agency needs.
d. Identify the risks of using a UCA and how the USG will manage them.
e. Identify and justify the specific contract type to be used.
f. Set limits on fund obligations.
g. Provide a schedule of agreed events to ensure timely finalization.

Ref. DFARS PGI 217.7404-1

Question 9

What are the requiered clauses in UCA?

Answer 9

FAR 52.216-24 Limitation of Government Liability (NTE $ Value and Max Gov. Liability)
DFARS 252.217-7027 Contract Definitization (KTR agrees to submit a proposal with CCPD and definitization schedule)

Question 10

UCA must contain definitization schdule for earlier of

Answer 10

1. The date that is 180 days after the contractor submits a qualifying proposal.
2. The date when the funds obligated under the contract action exceed 50 percent of the not-to-exceed price.