Part 517—Special Contracting Methods
Subpart 517.1—Multi-year Contracting
(a) In addition to the multi-year authority described in FAR 17.101, GSA is authorized to enter into contracts for periods not to exceed:
(1) Five years for the inspection, maintenance, and repair of fixed building equipment in federally owned buildings (40 U.S.C. 581(c)(6)); or
(2) Ten years for public utility services (40 U.S.C. 501(b)(1)(B)).
(b) Contracting officers may award contracts under the authority of paragraph (a)(1) or paragraph (a)(2) of this section without a cancellation clause.
“Fixed equipment in federally-owned buildings” means all GSA mechanical equipment, including heating/cooling (geothermal), ventilation, electrical (wind/photovoltaic), elevator, escalator, and fire safety systems, components, and devices.
Use of FAR 52.217-2, Cancellation Under Multi-year Contracts, is optional in multi-year contracts authorized by 40 U.S.C. 581(c)(6) for maintenance and repair of fixed equipment in federally-owned buildings and services and 40 U.S.C. 501(b)(1)(B) for public utility services.
This subpart applies to all GSA contracts for supplies and services, including:
(a) Services involving construction, alteration, or repair (including dredging, excavating, and painting) of buildings, bridges, roads, or other kinds of real property.
(b) Architect-engineer services.
(a) Supplies or services.
(1) Options may be used when they meet one or more of the following objectives:
(i) Reduce procurement lead time and associated costs.
(ii) Ensure continuity of contract support.
(iii) Improve overall contractor performance.
(iv) Facilitate longer term contractual relationships with those contractors that continually meet or exceed quality performance expectations.
(2) An option is normally in the Government’s interest in the following circumstances:
(i) There is an anticipated need for additional supplies or services during the contract term.
(ii) When there is both a need for additional supplies or services beyond the basic contract period and the use of multi-year contracting authority is inappropriate.
(iii) There is a need for continuity of supply or service support.
(3) An option shall not be used if the market price is likely to change substantially and an economic price adjustment clause inadequately protects the Government’s interest.
(b) Construction. For limitations on the use of options, see 536.213 and 536.270.
(a) Telecommunication contracts may not exceed 10 years per GSA Order ADM P 5450.39D, GSA Delegations of Authority Manual.
(b) Public utility contracts are limited to 10 years (40 U.S.C. 501(b)(1)(B).
(c) Requests to exceed 5-year limitation. A deviation request to exceed the 5-year limitation specified in FAR 17.204(e) must provide all the following information:
(1) Clearly explain the contract(s) and organization(s) covered by the request.
(2) Support the need for and reasonableness of the extension. Consider factors such as the following:
(i) The results of market research.
(ii) Stability of the requirement(s).
(iii) Benefits to the Government.
(iv) Use of a performance-based contracting approach.
(v) Availability of funds to cover estimated cancellation costs as well as costs for the first contract period.
(vi) Customary commercial practice.
(vii) Mechanisms to adjust for economic fluctuations.
(d) Approval authority. Deviation requests to exceed the 5-year limitations specified in FAR 17.204(e) must be approved by-
(1) The head of the contracting activity for individual contracts.
(2) GSA’s Senior Procurement Executive for classes of contracts.
In addition to the requirements of FAR 17.207, the contracting officer must also:
(a) Document the contract file with the rationale for an extended contractual relationship if the contractor's performance rating under the contract is less than satisfactory.
(b) Determine that the option price is fair and reasonable.
517.208 Solicitation provisions and contract clauses.
(a) For solicitations under Federal Acquisition Service’s Special Order Program, insert a provision substantially the same as the provision at 552.217-70, Evaluation of Options, if both of the following conditions apply:
(1) The solicitation contains an option to extend the term of the contract.
(2) The contract will be fixed price and contain an economic price adjustment clause.
(b) Insert the provision at 552.217-71, Notice Regarding Option(s), or a similar provision, in solicitations that include an option for increased quantities of supplies or services or an option to extend.
