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  • Question

    Is it legal for the Federal Government to award to vendor number two, as the LPTA, knowing that we would be receiving services without consideration? If we did award to number two, would OY2 be legally binding without consideration (or are all three years viewed as a totality)? Would the answer be the same if token consideration of $1 were offered? Thank you for your time.


    Answer

    For any legal advice, you should consult your organization's legal counsel. In addition, you should read FAR 15.404-1(g) on unbalanced pricing in its entirety for potential application to your scenario. Per (g)(1), "Unbalanced pricing exists when, despite an acceptable total evaluated price, the price of one or more contract line items is significantly over or understated as indicated by the application of cost or price analysis techniques." Per (g)(3), "An offer may be rejected if the contracting officer determines that the lack of balance poses an unacceptable risk to the Government."
     

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