...than the time specified in the terms of the option. Stated differently, if the buyer fails to exercise the option no later than the time specified in the terms, then the option expires and becomes invalid. In the ISI case, the DoC chose not to exercise the option and allowed it to expire by failing to provide the required notice. Always be sure that a specific date can be attached to the exercise of an option.
By the way, if the Government fails to exercise an option, this is not the same as a stop work order or a termination for the convenience of the Government, although certainly the effect is the same. If the Government fails to invoke their right to timely exercise an option, a contractor does not have a right to file a claim or equitable adjustment merely as a result of not exercising an option.
Tom Petruska, Owner
Contracts Unlimited, Incorporated
Foot Notes:
1. See FAR 52.217-9 implementing FAR Subpart 17.207.
2. GSBCA quoting Government Systems Advisors, Inc. v. United States, 847 F.2d. 811 (Fed. Cir. 1988)
3. GSBCA quoting Freightliner Corp. v. Caldera, 225 F.3d 1361,1366 (Fed. Cir. 2000)
4. GSBCA quoting Civic Plaza National Bank v. First National Bank in Dallas, 401 F.2d 193, 197 (8th Cir. 1968)
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