Who Gets to Bid on an Option Year?

The solicitation number on the notice Military Sealift Command posted Thursday afternoon is N3220524C4137. That is not a solicitation number. It is a contract, awarded to Schuyler Line Navigation Company in September 2024 for a shallow draft tanker running fuel for DLA Energy around INDOPACOM, and it has $40,582,239.66 obligated against it.

MSC is not soliciting anything. It is deciding whether to keep paying Schuyler Line, and it has given the rest of the market until 1300 Eastern on Thursday to say something about it.

The attachment, SS-26-154, states the purpose in one sentence with no hedging: "THIS SOURCES SOUGHT IS FOR AN OPTION EVALUATION AND WILL BE USED TO DETERMINE WHETHER TO EXERCISE AN OPTION ON AN EXISTING CHARTER CONTRACT."

Seven days. Then the contract either rolls into option 2 or it doesn't (chart below).

The Determination You Never See

Every option exercise in the federal government runs through FAR 17.207(c), and the condition that does the work is the last one: the contracting officer has to determine that exercising is "the most advantageous method of fulfilling the Government's need, price and other factors ... considered."

That determination is almost always a memo. FAR 17.207(d) gives three ways to support it, and only one of them requires talking to anybody outside the building:

1. Run a new solicitation and confirm it produces nothing better than the option.
2. Do "an informal analysis of prices or an examination of the market" showing the option price beats what's available.
3. Argue that so little time has passed since award that the option price is presumptively still the floor.

Route 1 is expensive and route 3 expires. Route 2 is where almost every option in DoD actually lives, and "an examination of the market" is a phrase that can mean a two-hour GSA Advantage search or a phone call to a colleague.

Nobody publishes it. The incumbent finds out the option was exercised when the mod arrives.

MSC's Strategic Sealift Program Support Office does route 2 by asking the market directly. The notice wants a vessel name, a Q-88, an availability date, and then the line that matters:

"DAILY RATE FOR ONE (1) TWELVE (12)-MONTH BASE PERIOD (365 DAYS) WITH ONE (1) ONE (1) YEAR OPTION PERIOD (366 DAYS), AND ONE (1) ELEVEN (11)-MONTH OPTION PERIOD (334 DAYS)."

That is the whole mechanism in one request. Give us your daily rate for the same runway the incumbent is holding, and we will put the two numbers next to each other.