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(Revised December 9, 2005)



 217.202 Use of options.
 217.204 Contracts.
 217.208 Solicitation provisions and contract clauses.
 217.208-70 Additional clauses.

217.202  Use of options.


      (1)  Options may be used for foreign military sales requirements.


      (2)  Consider use of surge options to support the Industrial Preparedness Production Planning program (see Subpart 208.72).  A surge option allows the Government, prior to final delivery, to—


              (i)  Accelerate the contractor's production rate in accordance with a surge production plan or a delivery schedule provided by the contractor under the terms of the contract; and


              (ii)  Purchase additional quantities of supplies or services.


      (3)  See Subpart 217.74 for limitations on the use of undefinitized options.


217.204  Contracts.                                   


      (e)(i)  Notwithstanding FAR 17.204(e), the ordering period of a task order or delivery order contract (including a contract for information technology) awarded by DoD pursuant to 10 U.S.C. 2304a—


                    (A)  May be for any period up to 5 years;


                    (B)  May be subsequently extended for one or more successive periods in accordance with an option provided in the contract or a modification of the contract; and


                    (C)  Shall not exceed 10 years unless the head of the agency determines in writing that exceptional circumstances require a longer ordering period.


              (ii)  DoD must submit a report to Congress, annually through fiscal year 2009, when an ordering period is extended beyond 10 years in accordance with paragraph (e)(i)(C) of this section.  Follow the procedures at PGI 217.204(e) (Pop-up Window or PGI Viewer Mode) for reporting requirements.


              (iii)  Paragraph (e)(i) of this section does not apply to the following:


                    (A)  Contracts, including task or delivery order contracts, awarded under other statutory authority.


                    (B)  Advisory and assistance service task order contracts (authorized by 10 U.S.C. 2304b that are limited by statute to 5 years, with the authority to extend an additional 6 months (see FAR 16.505(c)).


                    (C)  Definite-quantity contracts.


                    (D)  GSA schedule contracts.


                    (E)  Multi-agency contracts awarded by agencies other than NASA, DoD, or the Coast Guard.


              (iv)  Obtain approval from the senior procurement executive before issuing an order against a task or delivery order contract subject to paragraph (e)(i) of this section, if performance under the order is expected to extend more than 1 year beyond the 10-year limit or extended limit described in paragraph (e)(i)(C) of this section (see FAR 37.106 for funding and term of service contracts).


217.208  Solicitation provisions and contract clauses.

Sealed bid solicitations shall not include provisions for evaluations of options unless the contracting officer determines that there is a reasonable likelihood that the options will be exercised (10 U.S.C. 2301(a)(7)).  This limitation also applies to sealed bid solicitations for the contracts excluded by FAR 17.200.


217.208-70  Additional clauses.


      (a)  Use the clause at 252.217-7000, Exercise of Option to Fulfill Foreign Military Sales Commitments, when an option may be used for foreign military sale requirements.


              (1)  Use Alternate I when the foreign military sale country is not known at the time of solicitation or award.


              (2)  Do not use this clause in contracts for establishment or replenishment of DoD inventories or stocks, or acquisitions made under DoD cooperative logistics support arrangements.


      (b)  When a surge option is needed in support of industrial preparedness production planning (see Subpart 208.72), use the clause at 252.217-7001, Surge Option, in solicitations and contracts.


              (1)  Insert the percentage of increase the option represents in paragraph (a) of the clause.


              (2)  Change 30 days in paragraphs (b)(2) and (d)(1) to longer periods, if appropriate.


              (3)  Change the 24-month period in paragraph (c)(3), if appropriate.



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