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How long can a government contract be extended?

This decision is an important reminder that pursuant to FAR § 52.217-8, the government is entitled to unilaterally extend your contract up to six months, in any increment, before all option years have been exercised and at the rates in effect in the contract.

Can you extend an expired government contract?

If a contract has expired, then it means there was no renewal clause built into it. The only parts of a contract that continue to exist after a contract expires are whatever the parties have agreed to continue. These elements are usually written into a survival clause in the original contract.

What happens if a contract expires?

Although it certainly adds a layer of pressure to negotiations, in most cases, the employer continues paying wages and benefits under the terms of the expired agreement until a new agreement is ratified or imposed. ... The parties' obligations do not end when the contract expires.

Can you exercise an option after the expiration date?

American options can be exercised any time up to and including the expiration date of the option. However, European options can only be exercised on the date of expiration. ... An investor normally has until 4:30pm Central time on the third Friday of the month to instruct his or her broker to exercise an option.

What is contract renewal?

Contract extension: an existing contract is continued for a period of time. ... Contract renewal: an existing contract ends by, for example, expiring and the parties agree to enter into a new contract (usually for the same or very similar services).

What is an option year on a government contract?

Option years are a common feature of service contracts with the federal government. Many such contracts provide for a base period of performance and then allow the Government to exercise one or more options to extend the contract term.

When can a contract option be exercised?

The option may be exercised only if funds become available within the 60-day period. In the event that sufficient funding is not available within the 60-day period, the Government waives the right to exercise the option, thereby rendering any additional requirements subject to full and open competition requirements.

What is an option clause?

An Option Clause is an effective tool for addressing the consequences of a subject clause that tends to be too subjective. An option is a legally enforceable agreement by which a seller promises the buyer to keep an offer open for acceptance until a specified time.

How long can the government extend a contract?

This decision is an important reminder that pursuant to FAR § 52.217-8, the government is entitled to unilaterally extend your contract up to six months, in any increment, before all option years have been exercised and at the rates in effect in the contract.

What is a federal procurement contract?

Contracts for federal government procurement usually involve appropriated funds spent on supplies, services, and interests in real property by and for the use of the Federal Government through purchase or lease, whether the supplies, services, or interests are already in existence or must be created, developed, ...

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