2008 EXERCISE OF OPTIONS

2008.1 When exercising an option, the contracting officer shall provide written notice to the contractor within the time period specified in the contract.2008.2 When a contract provides for economic price adjustment and the contractor requests a revision of the price, the contracting officer shall determine the effect of the adjustment on prices under the option before the option is exercised.2008.3 Before exercising an option, the contracting officer shall make a written determination that the exercise will be in accordance with the terms of the option and the provisions of §2008.4.2008.4 A contracting officer shall exercise an option only after determining the following:- (a) That sufficient budget authority is available;

- (b) That the requirement covered by the option fulfills an existing District need; and

- (c) That the exercise of the option will be the most advantageous method of fulfilling the District's need, when price and other factors are considered.2008.5 The contracting officer, after considering price and other factors, shall make a determination on the basis of one (1) of the following:- (a) A new solicitation fails to produce a better price or a more advantageous offer than that offered by the option, provided that if it is anticipated that the best price available is the option price (or that this is the more advantageous offer), the contracting officer shall not use this method to test the market;

- (b) An informal analysis of prices or an examination of the market indicates that the option price is better than prices that would be available in the market or that the option would be the most advantageous offer; or

- (c) The short time between the award of the contract containing the option and the exercise of the option indicates that the option price is the lowest price obtainable or the most advantageous offer.2008.6 When determining whether to exercise an option, the contracting officer shall take into account the District's need for continuity of operations and the potential cost of disrupting operations.2008.7 The contract modification or other written document which notifies the contractor of the exercise of the option shall cite the option provision as authority for the action.

SOURCE: Final Rulemaking published at 35 DCR 1514 (February 26, 1988).