Army Improperly Extended Contracts, GAO Says

The Army improperly used FAR 52.217-8 (Option to Extend Services) to extend several contracts for periods much longer than the six-month maximum allowed by the clause.

This conclusion comes from a recent GAO study, in which the GAO determined that the Army improperly applied FAR 52.217-8 in three out of five contracts studied by the GAO.  And although the GAO’s report was narrowly focused on a handful of Army contracts, it leads me to wonder whether FAR 52.217-8 is being improperly used on a much broader scale.

The GAO’s study builds on an October 2015 report, in which the GAO concluded that agencies had improperly used bridge contracts in a number of instances.  In its follow-up study, the GAO analyzed five contracts awarded by the Army Contracting Command’s Redstone Arsenal.

For three of the five contracts, the GAO found that “the contracting officers had improperly extended the contract for longer than 6 months using the option to extend services clause.”  And in one case, the Army issued an extension based on FAR 52.217-8, even though “the clause itself had not been incorporated into the contract.”  The three contractors in question ultimately received extensions totaling 12, 10, and 11 months, respectively–between 4 to 6 months longer than permitted under FAR 52.217-8.

The GAO recommended that the Redstone Arsenal “provide training and, in a timely manner, issue a formal reminder to contracting officers on the appropriate use of the option to extend services clause, in particular the period of performance limitations prescribed by the clause.”

The recommendation is a good one, of course, and I hope that the Army follows through. But the GAO’s study, coupled with its earlier report on bridge contracts, makes me wonder whether this problem is limited to a single Army contracting office.  My gut tells me no.  I, for one, would love to see a much broader study on the use of FAR 52.217-8, followed by (as needed) appropriate government-wide remedial actions to ensure that the clause is used properly.  After all, an unjustified extension is nothing more than an improper sole source contract.


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