GAO: Understated Pricing Alone Isn’t “Unbalanced Pricing”

Under the FAR, unbalanced pricing may increase performance risk and can result in the government paying unreasonably high prices.  But the concept of unbalanced pricing is often misunderstood in practice.

As the GAO wrote in a recent bid protest decision, unbalanced pricing doesn’t exist merely because some of an offeror’s line item prices are low.  Rather, unbalanced pricing requires both understated and overstated line items–that is, some line items appear too high while others appear too low.

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Unbalanced Pricing: Agency Properly Excluded Contractor, Says GAO

Unbalanced pricing can justify the exclusion of a contractor’s proposal, even if the contractor alleges that the pricing represents its actual cost structure.

As demonstrated in a recent GAO bid protest decision, an agency is justified in rejecting a proposal on the basis of unbalanced pricing when the agency reasonably concludes that the unbalanced pricing poses an unacceptable risk to the government.

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