FAR Clause 52.217-8 – Option to Extend Services, (a.k.a. the -8 Clause) has come in handy several times throughout my contracting career when an acquisition was behind schedule. The clause allows the contracting officer to extend performance by up to six months, but in order to use it, the clause must be evaluated prior to contract award and exercised in strict accordance with the terms of the contract. Therefore, I recommend contractors become familiar with the clause and its limitations to help protect their own interest.
There are many GAO cases associated with the proper execution of this clause, but perhaps the most influential decision happened in 2009 when the GAO sustained Major Contracting Services’ protest to the Army for extending portable toilet services for four months. The GAO ruled that if the -8 Clause “was not evaluated as part of the initial competition… [the] contract extension [is] beyond the scope of the contract, and therefore effectively constitutes a new procurement.” In other words, for these situations the extension would either need to be competed or supported with a sole source justification. As you can imagine this ruling caused much frustration under contracts already in place since prior to the GAO decision, the -8 Clause was considered part of the overall contract and not separately addressed during evaluations; a sole source justification was now required to exercise the option for any contract already in place. To prevent this situation, today you can expect to see specific language in the solicitation and resultant contract which addresses how this clause will be evaluated prior to award and incorporated into the contract. If you do not see it addressed in the evaluation section of the solicitation, I would recommend raising the question during the solicitation phase in order to help preserve the additional performance period at the end.
After award, when the decision is made to exercise the option, contracting officers must provide timely notification and ensure that services are continued at the same rate and level of effort. For instance, prior to the end of the current period, if a 30-day notification is required before contract expiration and the contract is now at day 29, the contracting officer may no longer unilaterally exercise the extension under this clause. Furthermore, the government cannot change the scope of the effort and the contractor is not allowed to adjust their rates (aside from revisions to the prevailing labor rates). With that said, I have seen on several occasions notifications provided late and performance levels and rates changed. While these erroneous steps were taken without issue, if a competitor became aware of the improper action, a protest could result which would likely eliminate the 6-month performance period. Therefore, contractors should view themselves as a team member and speak up if you have any concerns with how the option is being exercised to make sure it is done correctly.
Although I have approached this topic from the perspective of preserving the ability of the contracting officer to extend performance, it is dually important to be aware of the terms in the event you do not want to see the performance extended. If you are unfortunate enough to be in a contract that cannot end soon enough, then you can use any missteps associated with this clause to challenge the contracting officer’s unilateral right to exercise the extension. With that said, I hope you are able to utilize this information in light of the former scenario in which the contractor is an integral part of the team and works with the contracting officer to make sure both sides are in compliance with the contract terms.