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(a) “Priced Option” means an option which has prices and terms already negotiated and further negotiations are not required.

(b) “Not-to-Exceed (NTE) Option” means an option which has an associated NTE price. Exercise of an NTE option is equivalent to issuing an Undefinitized Contractual Action (UCA) (See 5317.207-90). An NTE Option, however, may be converted via negotiations to a Priced Option prior to exercise. A sample NTE option CLIN example:

(c) “To-Be-Negotiated (TBN) Option” means an option that requires further negotiations to be exercised, but was originally contemplated and included in the basic instrument and/or modification clearance or approval documentation. A TBN Option differs from other options in that it cannot be exercised unilaterally. Typically a TBN Option is used when a reasonable NTE price and/or firm price cannot be approximated or negotiated. A TBN Option must be converted to a Priced Option or a NTE Option prior to exercise. A sample TBN option CLIN: