(Editor’s Note.  The following decision illustrates how different clauses used to extend a contract period can result in more or less recovery.)

After Arko completed its base year and four one year options the government notified Arko that its successor contractor was delayed and modified the contract to extend performance two months.  The government cited FAR 52,217-8, option to extend services which allows the government to require continued performance at rates specified in the contract for a period not to exceed six months.  Seeking additional compensation, Arko argued the extension could only have occurred under 52.237-3, continuity of services, that would have allowed Arko to recover “all reasonable phase-in and phase-out costs” as well as a prorate share of fee under the contract. The judge ruled against Arko stating there was no indication any of the services rendered by Arko fell into categories covered by the continuity of services clause while the unforeseen delay that triggered the extension “fit like a glove” the purposes of the FAR 52.217-8 clause. Here, there was no overlap between Arko’s tenure and that of the successor contractor, there was no requirement to provide phase-in training nor was there effort to effect a transition to the successor contractor.  Further, other requirements of 52.237 were not satisfied such as written notification by the CO invoking the clause, no development of a transition plan with the successor and no steps to facilitate the transition of personnel from the incumbent to the successor (Arko Executive Services, Inc. v US, Fed. Cl No. 05-1193C).

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