Quantcast Decision Not to Exercise Options

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manager, the contractor's quality control (QC) official; and others as
appropriate. The minutes of the meeting, signed by the Contracting Officer,
should be forwarded to the contractor for signature, and the contractor
should be requested to state in writing any disagreements with the minutes.
6-750 Performance Evaluation.  A special performance evaluation report
should be prepared when a trend of unsatisfactory performance first begins
to develop. This evaluation should be completed as outlined at 6-520.  In
addition to sending the evaluation to the contractor's onsite project
manager, consideration should be given to sending the evaluation to the
contractor's home office and to the contractor's bonding company (if any).
6-760 Decision Not to Exercise Options. If the contractor's performance
evaluation at the midpoint of the contract period is unsatisfactory, serious
consideration should be given to not exercising an option to renew the
contract. The Government is under no legal obligation to renew a contract,
and the contract should only be renewed if it is in the best interest of
the Government. At a minimum, if the contractor's performance is poor, a
contingency plan should be developed to seek a new contractor, and the
contract documents including the performance work statement (PWS) and the
performance requirements summary (PRS) should be reviewed and revised. It
is inconsistent to rate a contractor unsatisfactory and at the same time
exercise a full renewal option.
6-770 Termination for Default. Termination for Default is defined as the
Government's contractual right to completely or partially terminate a
contract bemuse of the contractor's actual or anticipated failure to
perform its contractual duties (FAR 49.401).  If the contractor's
performance is such that it is in the best interest of the Government to
terminate the contract, the termination procedures in Part 49 of Federal
Acquisition Regulation (FAR) and supplementary regulations must be followed.


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