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e-CFR data is current as of August 11, 2020

Title 48Chapter 5Subchapter C → Part 517


Title 48: Federal Acquisition Regulations System


PART 517—SPECIAL CONTRACTING METHODS


Contents

Subpart 517.1—Multi-year Contracting

517.109   Contract clauses.

Subpart 517.2—Options

517.200   Scope of subpart.
517.202   Use of options.
517.203   [Reserved]
517.207   Exercise of options.
517.208   Solicitation provisions and contract clauses.

Authority: 40 U.S.C. 121(c).

Source: 64 FR 37218, July 9, 1999, unless otherwise noted.

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Subpart 517.1—Multi-year Contracting

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517.109   Contract clauses.

Use of FAR 52.217-2, Cancellation Under Multi-year Contracts, is optional in multi-year contracts authorized by 40 U.S.C. 581(c)6 for maintenance and repair of fixed equipment in federally-owned buildings and services and 40 U.S.C. 501(b)(1)(B) for public utility services.

[64 FR 37218, July 9, 1999, as amended at 81 FR 36422, June 6, 2016]

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Subpart 517.2—Options

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517.200   Scope of subpart.

(a) Except as provided in paragraph (b) of this section, this subpart applies to contracts for supplies and services, including architect-engineer services.

(b) Policies and procedures for the use of options in solicitation provisions and contract clauses for services involving construction, alteration, or repair (including dredging, excavating, and painting) of buildings, bridges, roads, or other kinds of real property are prescribed in 536.270. FAR subpart 17.2 and this subpart do not apply to the use of options in solicitation provisions and contract clauses for services involving construction, alteration, or repair (including dredging, excavating, and painting) of buildings, bridges, roads, or other kinds of real property.

[84 FR 3717, Feb. 13, 2019]

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517.202   Use of options.

(a) Options may be used when they meet one or more of the following objectives:

(1) Reduce procurement lead time and associated costs.

(2) Ensure continuity of contract support.

(3) Improve overall contractor performance.

(4) Facilitate longer term contractual relationships with those contractors that continually meet or exceed quality performance expectations.

(b) An option is normally in the Government's interest in the following circumstances:

(1) There is an anticipated need for additional supplies or services during the contract term.

(2) When there is both a need for additional supplies or services beyond the basic contract period and the use of multi-year contracting authority is inappropriate.

(3) There is a need for continuity of supply or service support.

(c) An option shall not be used if the market price is likely to change substantially and an economic price adjustment clause inadequately protects the Government's interest.

[84 FR 3716, Feb. 13, 2019]

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517.203   [Reserved]

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517.207   Exercise of options.

In addition to the requirements of FAR 17.207, the Contracting Officer must also:

(a) Document the contract file with the rationale for an extended contractual relationship if the contractor's performance rating under the contract is less than satisfactory.

(b) Determine that the option price is fair and reasonable.

[81 FR 36423, June 6, 2016]

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517.208   Solicitation provisions and contract clauses.

(a) For solicitations under the Federal Acquisition Service's or Special Order Program, insert a provision substantially the same as the provision at 552.217-70, Evaluation of Options, if both of the following conditions apply:

(1) The solicitation contains an option to extend the term of the contract.

(2) The contract will be fixed price and contain an economic price adjustment clause.

(b) Insert the provision at 552.217-71, Notice Regarding Option(s), or a similar provision, in solicitations that include an option for increased quantities of supplies or services or an option to extend.

[64 FR 37218, July 9, 1999, as amended at 81 FR 36422, June 6, 2016]

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