[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR17.204]

[Page 324-325]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 17_SPECIAL CONTRACTING METHODS--Table of Contents
 
                          Subpart 17.2_Options
 
Sec.  17.204  Contracts.

    (a) The contract shall specify limits on the purchase of additional 
supplies or services, or the overall duration of the term of the 
contract, including any extension.
    (b) The contract shall state the period within which the option may 
be exercised.
    (c) The period shall be set so as to provide the contractor adequate 
lead time to ensure continuous production.
    (d) The period may extend beyond the contract completion date for 
service contracts. This is necessary for situations when exercise of the 
option would result in the obligation of funds that are not available in 
the fiscal year in which the contract would otherwise be completed.
    (e) Unless otherwise approved in accordance with agency procedures, 
the total of the basic and option periods shall not exceed 5 years in 
the case of services, and the total of the basic and option quantities 
shall not exceed the requirement for 5 years in the case of

[[Page 325]]

supplies. These limitations do not apply to information technology 
contracts. However, statutes applicable to various classes of contracts, 
for example, the Service Contract Act (see 22.1002-1), may place 
additional restrictions on the length of contracts.
    (f) Contracts may express options for increased quantities of 
supplies or services in terms of (1) percentage of specific line items, 
(2) increase in specific line items, or (3) additional numbered line 
items identified as the option.
    (g) Contracts may express extensions of the term of the contract as 
an amended completion date or as additional time for performance; e.g., 
days, weeks, or months.

[48 FR 42231, Sept. 19, 1983, as amended at 54 FR 5055, Jan. 31, 1989; 
61 FR 41470, Aug. 8, 1996]