(a) Subject to the limitations in this section, contracting officers may include options in contracts when it is in the Government's interest.
(b) The scope of work in the base contract at award shall require the contractor to provide a discrete and fully functional deliverable. Options shall not be used to incrementally deliver work required to fulfill the requirements of the scope of work for the base contract.
(c) Contracting officers shall justify in writing the use of options.
(d) Including an option may be in the Government's interest when, in the judgment of the contracting officer:
(1) Additional work beyond the base contract is reasonably foreseeable;
(2) It would not be advantageous to award a separate contract;
(3) It would not be advantageous to permit an additional contractor to work on the same site;
(4) Services arising out of or relating to the underlying construction contract may be required during or after substantial completion of the scope of work. For instance, if building equipment (e.g., mechanical and electrical equipment) will be installed under the construction contract, it may be advantageous to have the construction contractor maintain and service the equipment. In such an instance, the services performed may be included as an option to the underlying construction contract. Contracting officers shall ensure that the applicable clauses are included in any such option (e.g., Service Contract Act); or
(5) It is otherwise justified.
(e) Options for construction work may provide for an economic price adjustment based on cost or price indexes of labor or materials (see FAR 16.203-4(d)). Subject to the approval of the Head of the Contracting Activity (HCA), the contracting officer may develop and insert a project-specific price adjustment clause into the solicitation.