(a) In general, the contract amount is measured by the consideration
agreed to be paid, whether in money or other valuable consideration, in
return for the obligations assumed under the contract. Thus, even though
a contractor, such as a wrecker entering into a contract with the
Government to raze a building on a site which will remain vacant, may
not be entitled to receive any money from the Government for such work
under his contract or may even agree to pay the Government in return for
the right to dispose of the salvaged materials, the contract will be
deemed one in excess of $2,500 if the value of the property obtained by
the contractor, less anything he might pay the Government, is in excess
of such amount. In addition, concession contracts are considered to be
contracts in excess of $2,500 if the contractor's gross receipts under
the contract may exceed $2,500.
(b) All bids from the same person on the same invitation for bids
will constitute a single offer, and the total award to such person will
determine the amount involved for purposes of the Act. Where the
procurement is made without formal advertising, in arriving at the
aggregate amount involved, there must be included all property and
services which would properly be grouped together in a single
transaction and which would be included in a single advertisement for
bids if the procurement were being effected by formal advertising.
Therefore, if an agency procures continuing services through the
issuance of monthly purchase orders, the amount of the contract for
purposes of application of the Act is not measured by the amount of an
individual purchase order. In such cases, if the continuing services
were procured through formal advertising, the contract term would
typically be for one year, and the monthly purchase orders must be
grouped together to determine whether the yearly amount may exceed
$2,500. However, a purchase order for services which are not continuing
but are performed on a one-time or sporadic basis and which are not
performed under a requirements contract or under the terms of a basic
ordering agreement or similar agreement need not be equated to a yearly
amount. (See Sec. 4.142(b).) In addition, where an invitation is for
services in an amount in excess of $2,500 and bidders are permitted to
bid on a portion of the services not amounting to more than $2,500, the
amounts of the contracts awarded separately to individual and unrelated
bidders will be measured by the portions of the services covered by
their respective contracts.
(c) Where a contract is issued in an amount in excess of $2,500 this
amount will govern for purposes of application of the Act even though
penalty deductions, deductions for prompt payment, and similar
deductions may reduce the amount actually expended by the Government to
$2,500 or less.
