FAR 17.208—Solicitation provisions and contract clauses.

Use the right evaluation provision

If a solicitation includes an option clause, the contracting officer must insert a provision on how options will be evaluated. Use 52.217-3 unless the solicitation fits the specific conditions for 52.217-4 or 52.217-5.

Exclude options from evaluation by default

When a solicitation includes an option clause but does not use the special evaluation provisions in paragraphs (b) or (c), the Government must evaluate the offer exclusive of options under 52.217-3. This means the base requirement is evaluated without counting option quantities or periods unless the solicitation says otherwise.

Evaluate exercisable-at-award options separately

Use 52.217-4 when the solicitation includes an option clause, the contracting officer reasonably expects the option will be exercised, and the option may be exercised at contract award. This provision is for situations where the Government may decide at award time to include the option in the initial award decision.

Evaluate likely-to-be-exercised options for fixed-price awards

Use 52.217-5 when the solicitation includes an option clause, the option will not be exercised at award, a firm-fixed-price or fixed-price-with-economic-price-adjustment contract is contemplated (or another agency-approved type), and the contracting officer reasonably expects the option will be exercised. For sealed bids, the reasonable-likelihood determination must be in writing.

Use quantity option clauses for supplies, not services

Insert 52.217-6 or 52.217-7 in solicitations and contracts other than those for services when an option is appropriate. 52.217-6 applies when the option quantity is stated as a percentage of the basic quantity or as an additional quantity of a specific line item; 52.217-7 applies when the option is a separately priced line item with the same nomenclature as the corresponding base line item.

Use service extension clause for service contracts

Insert 52.217-8 in solicitations and contracts for services when an option is appropriate. This clause is the standard tool for extending services beyond the base period under the conditions allowed by the contract.

Use term-extension clause when needed

Insert 52.217-9 when an option is appropriate and the contract needs one or more of these features: preliminary written notice of intent to extend, a statement that extending the contract also extends the option, or a specified maximum total contract duration.

Contracting Officer

Select and insert the correct solicitation provision or contract clause based on the type of option, the contract type, and whether the option may be exercised at award. Make the required reasonable-likelihood determination, and for sealed bids document that determination in writing when using 52.217-5. Ensure the contract language clearly addresses evaluation, exercise timing, notice, and any total-duration limits.

Agency

Follow agency procedures for approving contract types other than firm-fixed-price or fixed-price with economic price adjustment when using 52.217-5. Ensure internal acquisition policies support the use of option clauses and the required determinations.

Contractor

Review option-related provisions carefully because they can affect how the offer is evaluated, whether the option may be included at award, and what future performance may be required. Price and plan for option periods or quantities knowing the Government may exercise them under the stated terms.

Source Selection / Evaluation Team

Evaluate offers in accordance with the solicitation’s option-evaluation provision, including whether options are excluded from evaluation or considered at award or for likely exercise. Apply the stated evaluation method consistently across offers.