FAR 37.111—Extension of services.
Plain-English Summary
FAR 37.111 addresses how the Government can keep recurring or continuing services in place when award of a new contract is delayed by events outside the contracting office’s control, such as bid protests or alleged mistakes in bid. It authorizes the contracting officer to include an option clause in solicitations and contracts that allows the Government to require continued performance of the services for a limited period, rather than negotiating a short bridge extension each time a delay occurs. The section also explains that the extended performance must stay within the contract’s existing scope, limits, and rates, except that rates may be adjusted only when the Secretary of Labor revises prevailing labor rates. It further limits the use of this extension authority by allowing the option to be exercised more than once, but only up to a total of 6 months of extended performance. In practice, this provision is a planning tool for service acquisitions: it helps agencies avoid service gaps, gives contractors notice that continuation may be required, and sets clear boundaries on pricing and duration.
Key Rules
Use for delayed service awards
This authority applies to recurring and continuing service requirements when award of a new contract is delayed by circumstances beyond the contracting office’s control. The section specifically identifies bid protests and alleged mistakes in bid as examples of the kinds of delays it is meant to address.
Include an option clause
The contracting officer may place an option clause in the solicitation and contract to permit continued performance of services. The clause is intended to avoid repeated short-term bridge extensions by building the extension mechanism into the original contract.
Continuation within contract limits
The Government may require continued performance only for services already covered by the contract and only within the limits and at the rates specified in the contract. This means the extension is not a vehicle for adding new work or materially changing the bargain.
Limited rate adjustments
The contract rates during the extension may be adjusted only because of revisions to prevailing labor rates issued by the Secretary of Labor. Other price changes are not authorized under this section.
Multiple exercises allowed
The option provision may be exercised more than once if needed. However, the total period of extended performance under this authority cannot exceed 6 months.
Responsibilities
Contracting Officer
Decide whether to include the extension option in solicitations and contracts for recurring or continuing services, ensure the clause is properly drafted and incorporated, and exercise the option only when needed to maintain service continuity. The contracting officer must also ensure any rate adjustment is limited to changes in prevailing labor rates and that total extended performance does not exceed 6 months.
Agency
Plan service acquisitions to anticipate possible award delays and use this authority to prevent service interruptions. The agency must support contracting officers by identifying critical service needs and ensuring the extension mechanism is used only for appropriate recurring or continuing services.
Contractor
Continue performance if the Government properly exercises the option, at the contract’s specified limits and rates, subject only to authorized labor-rate adjustments. The contractor must be prepared for the possibility of more than one extension exercise, but only within the 6-month total cap.
Secretary of Labor
Issue revisions to prevailing labor rates that may justify adjustments to contract rates during the extension period. No other source of price adjustment is authorized by this section.
Practical Implications
This provision is mainly a continuity tool: it helps agencies avoid service gaps when protests or bid issues delay award of the follow-on contract.
Contracting officers should build the option into the original solicitation and contract if they anticipate recurring service needs and possible award delays; waiting until a delay occurs can force a less efficient bridge action.
The pricing rule is narrow, so teams should not treat the extension as an opportunity to renegotiate rates or add scope; only Labor Department prevailing wage revisions can change the rates.
Because the total extension cannot exceed 6 months, acquisition planning should still focus on timely follow-on award and not rely on this authority as a long-term solution.
A common pitfall is using the extension for work outside the original service requirement or beyond the contract’s limits; that can create scope and funding problems and undermine the purpose of the clause.
Official Regulatory Text
Award of contracts for recurring and continuing service requirements are often delayed due to circumstances beyond the control of contracting offices. Examples of circumstances causing such delays are bid protests and alleged mistakes in bid. In order to avoid negotiation of short extensions to existing contracts, the contracting officer may include an option clause (see 17.208 (f)) in solicitations and contracts which will enable the Government to require continued performance of any services within the limits and at the rates specified in the contract. However, 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 thereunder shall not exceed 6 months.