Overview
FAR 37.111 provides a mechanism for the government to ensure continuity of services when the award of a follow-on contract for recurring requirements is delayed by unforeseen circumstances such as bid protests. It authorizes the inclusion of an option clause that allows the government to unilaterally extend the current contract's period of performance for a limited duration.
Key Rules
- Applicability: Designed for recurring and continuing service requirements facing delays beyond the contracting office's control (e.g., bid protests or mistakes in bid).
- Clause Reference: Implemented via the option clause prescribed in FAR 17.208(f), commonly known as FAR 52.217-8, "Option to Extend Services."
- Pricing: Services must be provided within the existing contract limits and at the rates specified in the contract.
- Rate Adjustments: Price increases are prohibited during the extension unless they result from revisions to prevailing labor rates issued by the Secretary of Labor.
- Duration: The option may be exercised multiple times, but the total cumulative extension under this provision is strictly capped at 6 months.
Practical Implications
- Continuity of Operations: This section prevents service gaps by allowing a "bridge" period without requiring the negotiation of a new, potentially more expensive, short-term sole-source contract.
- Risk Mitigation: Contractors must account for the possibility of a six-month extension at current pricing when bidding, as the government can exercise this option unilaterally to maintain essential services during litigation or administrative delays.