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100

What is an option?

An “Option” is a unilateral right in a contract by which, for a specified time, the Government may elect to purchase additional supplies or services called for by the contract, or may elect to extend the term of the contract.

 

100

What happens when a decision is made NOT to exercise the option?

The contract ends!

100

What are the 3 Evaluation of option clauses and how will the Gov evaluate offerors?

Evaluation Exclusive of Options – FAR 52.217-3 - Gov will evaluate offers for award purposes by including only the price for the basic requirement; i.e., options will not be included in the evaluation for award purposes.

Evaluation of Options Exercised at Time of Award – FAR 52.217-4 - Gov will evaluate the total price for the basic requirement together with any options exercised at the time of award.

Evaluation of Options - FAR 52.217-5 - Gov will evaluate offers for award purposes by adding the total price for all option(s) to the total price for the basic requirement.  Evaluation of options will not obligate the Gov to exercise the option(s)

100

What are 3 ways SAP procedures benefit the Government?

Reduce Admin Cost

Improve opportunities for SB, SDB, WOSB, VOSB, Hubzone

Promote efficiency and economy in contracting

Avoid unnecessary burdens for agencies and contractors


200

What are the option clauses?

FAR 52.217-6 Option for Increased Quantity; FAR 52.217-7 Option for Increased Quantity-Separately Priced Line Item; FAR 52.217-8 Option to Extend Services; FAR 52.217-9 Option to Extend the Term of the Contract

200

What is FAR Clause 52.217-8 and when is it used?

Option to Extend Services

Used in solicitations and contracts for services when the inclusion of an option is appropriate.

Used because contracts for recurring and continuing service requirements are often delayed based on circumstances beyond the control of contracting offices. 

200

As a new PCO to the Trainers section, your program manager calls you to welcome you to the team and lets you know he is about to send over a committed PR for an option coming due on a particular contract. Upon review, you notice the timeframe to send a Letter of Intent to the contractor has lapsed a week ago. What do you do?

Although we have lost our unilateral right to exercise contract we need to check if contractor will bilaterally agree to exercise the option. May go ahead and send letter of intent acknowledging it is late by 1 week. Go through steps to exercise option.

200

What are the 7 exceptions to Full and Open Competition?

Exception 1 – Only one responsible source

Exception 2 – Unusual and compelling urgency

Exception 3 – Industrial mobilization

Exception 4 – International agreement

Exception 5 Authorized by statute

Exception 6 – National Security

Exception 7 – Public Interest

300

What are the PCO action points for options during the Synopsis/Solicitation/Evaluation Phase?

  • Ensure your Synopsis and Solicitation include the Options 
  • Include the appropriate Clauses and Provisions based on the decisions made during the planning phase
  • Once proposals are received evaluate the options IAW the evaluation provision you selected (52.217-3, -4 or -5)
300

Can 52.217-8 Option to Extend Services be exercised more than once?

Yes, as long as the total extension of performance does not exceed 6 months. 

300

What are the procedures to Exercise Option?            

  • Check applicable clauses (FAR 52.217-6, -7, -8, -9) to determine suspense dates to issued “Letter of Intent” and issue mod to “Exercise the Option”
  • Have program/requirements office provide coordination re: need, available funding, etc
  • Issue Letter of Intent IAW date in clause
  • Accomplish D&F IAW FAR 17.207(c)
  • Issue modification to Exercise the Option at any time prior to expiration of the current contract period or IAW other timeframe as noted in the fill-ins of clause(s)

300

True or False? Price analysis requires the PCO to analyze profit separately.

False: Price analysis is the process of examining and evaluating a proposed price without evaluating its separate cost elements and proposed profit.

400

What are the PCO action points during the Planning Phase?

  • Determine if contract will employ Option periods or quantities?  If so, what kind and how many?  Describe arrangement in your planning documents and include the appropriate clauses and CLINS in the solicitation.
  • Complete the D&F for Inclusion of Options
  • If including options, how will they be evaluated?  Include the appropriate solicitation provisions

 

400

What is FAR Clause 52.217-9 and how does it work?

Option to Extend the Term of the Contract – The Gov may extend the term of the contract by written notice to the contractor provided the Gov contractor preliminary written notice of its intent to extend at least *60 days before contract expires. 

*60 days unless a different number of days is inserted in the clause.

400

You just rotated to a new area and you are excited to be a PCO in the Commercial Derivative Aircraft Contracting Branch. It is your first day, your supervisor hands you a stack of contracts, and lets you know the PCO you are replacing took a job overseas a couple of weeks ago. Therefore, the contracts had not been touched in a couple of weeks.

  • Review contracts from top to bottom/check if there are any options coming due; meet the program office to get any concerns and better understand the workload. Figure out if there are any buyers/PCOs in the section with historical knowledge of your workload. Use your supervisor as a resource.
400

Approval authority for consolidation, what dollar value?

SCO is the approval authority if greater than $2M, shall coordinate with Small Business

500

What is 52.217-7 and how does it work?

Option for Increased Quantity-Separately Priced Line Item, Option CLINS Gov may order these CLINs at price/qty stated in contract. Includes fill-in for timeframe to exercise the option.