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GAO Investigation Concludes Army Extends Services Contract without Proper Authorization Applicable Procurement Regulations

Posted on January 31st, 2016 by

FAR 52.217-8, “Option to Extend Services,” allows a Contracting Officer to extend a service contract for up to six months. This clause provides:

52.217-8, OPTION TO EXTEND SERVICES (NOV 1999) The Government may require continued performance of any services within the limits and at the rates specified in the contract. These rates may be adjusted only as a result of revisions to prevailing labor rates provided by the Secretary of Labor. The option provision may be exercised more than once, but the total extension of performance hereunder shall not exceed 6 months. The Contracting Officer may exercise the option by written notice to the Contractor within [insert the period of time within which the Contracting Officer may exercise the option]. 

The above clause is typically required when there is a need for continued services until the Government awards a new contract. These extended contracts are commonly known as “bridge contracts.”
On January 28, 2016, the General Accounting Office (”GAO”) found that the Army Contracting Command-Redstone Arsenal had, on several occasions, extended the duration of contracts beyond their legal limits. Recent GAO reports note that about half of the bridge contracts created by such extensions were for professional management or information technology services. Although bridge contracts are typically short-term, GAO found that some contracts spanned multiple years. The GAO investigation fell short of concluding the Army Contracting Command-Redstone Arsenal did this intentionally, but blamed this on inexperienced and overwhelmed project and contracting staff.

Army Contracting: Training and Guidance Needed to Ensure Appropriate Use of the Option to Extend Services Clause (January 28, 2016)

 

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