XL EagleBase Year and Option Years
Base Year and Option Years. Many service contracts have a base period, often one year, followed by option years. The base period is the committed part. Option years are extra periods the government may choose to exercise, but does not have to.
You price every year when you bid, and the government often evaluates the total of base plus all options. A common setup is one base year and four option years. Agencies can also use a clause that allows a short extension of up to six months.
Why it matters to a small contractor
Price option years with realistic raises for wages, fuel and supplies. If you bid flat for five years, rising costs can eat your margin by year three.
Example
A mowing contract has a base year at $40,000 and four option years at $41,200, $42,400, $43,700 and $45,000. The full potential value is $212,300.
Base Year and Option Years: common questions
Does the government have to exercise options?
No. Options are the government's choice, based on need, funds and your performance.
Can I refuse an option?
Usually not, if the government exercises it on time and per the contract terms.
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