If an option year is unfunded, what should be done with it in FPRA pricing?

If an option year is unfunded, what should be done with it in FPRA pricing?

• A. Exclude it from FPRA
• B. Include at maximum allowable rate
• C. Include only if profitable
• D. Treat as non-payable

Answer: (A)

In FPRA pricing, you only price periods that have funds available. An option year that is unfunded has no budget backing, so there’s no actual money to cover the work in that period. Including it would create a price for work that isn’t funded and could mislead about what is payable. Therefore the correct approach is to exclude unfunded option years from FPRA pricing, reflecting only the funded portions of the contract. If funds become available later, a new pricing decision or option exercise would occur at that time.

In FPRA pricing, you only price periods that have funds available. An option year that is unfunded has no budget backing, so there’s no actual money to cover the work in that period. Including it would create a price for work that isn’t funded and could mislead about what is payable. Therefore the correct approach is to exclude unfunded option years from FPRA pricing, reflecting only the funded portions of the contract. If funds become available later, a new pricing decision or option exercise would occur at that time.