Selling certain products below “cost” is forbidden by the regulations. (T or F)

Question

Selling certain products below “cost” is forbidden by the regulations. (T or F) For government property that is damaged while in the possession of the contractor, the extent of contractor’s liability will be either any loss, damage, or destruction; or only loss, damage or destruction due to lack of good faith or willful misconduct on the part of managerial personnel. (T or F) Selling certain products below “cost” is forbidden by the regulations. (T or F) For government property that is damaged while in the possession of the contractor, the extent of contractor’s liability will be either any loss, damage, or destruction; or only loss, damage or destruction due to lack of good faith or willful misconduct on the part of managerial personnel. (T or F) Selling certain products below “cost” is forbidden by the regulations. (T or F) For government property that is damaged while in the possession of the contractor, the extent of contractor’s liability will be either any loss, damage, or destruction; or only loss, damage or destruction due to lack of good faith or willful misconduct on the part of managerial personnel. (T or F)

Explanation / Answer

1. False.

Selling products below 'cost' is a type of pricing technique known as 'predatory pricing' and is not forbidden by the regulations.

2. False

Generally, the contractor is not held liable in such a scenario. Although there are a few exceptions. e.g. FIRM FIXED PRICE Contract where an exception at FAR 15.403 applies.

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