Service contracting has in recent years gotten a lot more scrutiny than ever before by the government. Service contracts are normally limited to a 5-year period. You would think that agencies would have a handle on the expiration date of its contracts and prepare for that, but any number of reasons can arise to delay awards. Developing requirements and getting a solicitation through the review process can take time and government people hate the process. It takes time away from their other duties and the source selection process has become overly burdensome. Competition is messy. As a result, agencies find themselves getting late starts on follow-on efforts and then end up scrambling to continue service because the current contract is expiring and the new one is still in process. The solution many times is what has become known as a bridge contract.
“Bridge contract” means a non-competitive contract/order or contract/order extension with an existing contractor to bridge the time between the original end of that contractor’s contract/order (following exercise of all options or extension provisions meeting the requirements of FAR 17.207) and the competitive award of a follow-on contract/order.
If you are the contractor performing on the contract, when the contract gets to within a year of ending, you should be asking if the government has a plan for continuing the service. Usually four choices face the government. First, re-compete the work as it currently exists or with minor modifications. Second, develop a new statement of work if the work has changed significantly. Third, may be to consolidate or bundle the work with other like work, into a new contract vehicle. Last and usually very rare, do nothing as the work is no longer needed.
As the government goes through the process of developing that new solicitation the work being performed still has to be done. Regardless of when the government realizes its need for a bridge, it must be obtained by getting appropriate approvals to do a “sole source” justification. Since the time of the bridge is very limited these bridge requests usually get approved.
Many agencies have been using FAR 52.217-8, Option to Extend Services, in their contracts which allows up to a six-month extension. This allows the agency some flexibility to continue services without having to justify a bridge effort. Look for that clause in any contract you currently have or any solicitation you may be bidding on.
Pricing of any bridge contract has to be justified like any sole source contract. Agencies may ask that the incumbent continue to perform at the current price. The incumbent is under no obligation under a bridge to honor pricing from the old contract. If the incumbent wants new pricing, then they are obligated to provide the appropriate supporting cost and pricing data for the new contract price.
It is important to note two issues with bridge contracts. First, service contracts are not supposed to exceed 5 years. Government agencies can stretch that by six months but that is supposed to be a hard limit. Secondly the use of bridge contracts has been viewed by the General Accountability Office (GAO) as expensive, so the use of bridges is not always viewed as a good solution. Many agencies view the request as a reflection of bad management unless there were circumstances beyond the requiring activity’s control.