option

An option in public procurement is a contractual right, but not an obligation, for the contracting authority to extend a contract or order additional deliveries on pre-agreed terms. Options provide flexibility to adapt the contract as needs evolve, without having to run an entirely new procurement procedure.

How does an option work?

An option is built into the tender documents and the contract before the competition is launched. For example, a public body might sign a three-year cleaning services contract with an option to extend for one plus one additional years. If the authority is satisfied with the performance, it can choose to exercise the option — but it is not obligated to do so.

The supplier, on the other hand, is bound by the option terms. Under EU Directive 2014/24/EU, Article 72(1)(a), options are considered permissible contract modifications as long as they were set out in the original procurement documents in clear, precise and unequivocal terms, and do not alter the overall nature of the contract.

Key rules for options

• Options must be stated in the procurement documents — they cannot be added after the fact
• The value of options must be included in the total contract value when calculating threshold values, as required by the procurement directives
• The option period counts towards the total contract duration — a 2-year contract with a 2-year option is a 4-year contract
• Framework agreements may generally not last more than four years, including options
• An expired option gives no right to continue purchasing — doing so may constitute an illegal direct award

Tools like Cobrief can help suppliers keep track of contract timelines and upcoming procurement opportunities as options approach their exercise deadlines.

An option is a key element of contract strategy that benefits both parties. For the contracting authority, it means the ability to continue a well-functioning arrangement, while the supplier gains the prospect of a longer business relationship — though with no guarantee that the option will actually be exercised.