FAR 17.205—Documentation.
Plain-English Summary
FAR 17.205 explains the documentation requirements for using contract options. It covers the contracting officer’s written justification for the option quantity or option term, the option notification period, and any limitation on option price established under FAR 17.203(g), and it requires that this justification be placed in the contract file. It also addresses how any required justifications and approvals, as well as any determinations and findings required by FAR part 6, must describe both the basic requirement and the additional quantity or period allowed by the option. In practice, this section ensures the record clearly shows why the option structure is appropriate and what exactly is being added if the option is exercised. That documentation supports transparency, auditability, and compliance with competition and approval requirements when agencies use options to extend performance or increase quantities.
Key Rules
Written option justification
The contracting officer must justify in writing the option quantity or option term, the option exercise notification period, and any limitation on option price under FAR 17.203(g). This written justification is the core record supporting the option structure chosen for the contract.
File the justification
The justification document must be included in the contract file. This ensures the rationale is preserved for review, oversight, and future contract administration.
Describe basic and option amounts
Any justifications and approvals, and any determinations and findings required by FAR part 6, must state both the basic requirement and the increase permitted by the option. The documentation must make clear what is being procured initially and what additional amount or period may be added later.
Link to part 6 requirements
When part 6 requires a justification, approval, or determination and findings, that documentation must be written in a way that reflects the option structure. The record cannot describe only the base contract; it must also capture the potential option expansion.
Responsibilities
Contracting Officer
Prepare a written justification for the option quantity or term, the option notification period, and any option price limitation under FAR 17.203(g); ensure the justification is placed in the contract file; and make sure any required justifications, approvals, or determinations and findings identify both the basic requirement and the option increase.
Agency/Contract File Custodian
Maintain the justification and related approval documents in the official contract file so the option decision is fully documented and available for review.
Approving Official or Other Part 6 Authority
When part 6 approvals or determinations and findings are required, ensure the written record clearly addresses both the basic requirement and the additional quantity or period authorized by the option.
Practical Implications
Options are not just a contract clause issue; they require a clear written record explaining why the option is structured the way it is.
A common mistake is documenting only the base requirement and forgetting to state the option increment, which can create compliance problems under FAR part 6.
The notification period and any price limitation must be justified, not assumed, because they affect when and how the option may be exercised.
Poor file documentation can make an otherwise valid option vulnerable during audits, protests, or internal reviews.
Contracting officers should ensure the option documentation matches the solicitation, contract clause, and any required approval package so there are no inconsistencies.
Official Regulatory Text
(a) The contracting officer shall justify in writing the quantities or the term under option, the notification period for exercising the option, and any limitation on option price under 17.203 (g); and shall include the justification document in the contract file. (b) Any justifications and approvals and any determination and findings required by part 6 shall specify both the basic requirement and the increase permitted by the option.