In general, when the solicitation advertises that line items or phases are severable (i.e. can be separately contracted and priced), then the proper measure for a deletion of that line item or phase is the quoted price. This "separate and severable" exception to the general rule of pricing deductive changes by cost, not price, is to by applied only in the presence of two conditions: (1) the deleted item was priced separately and (2) the term of the award allowed for a piecemeal or severable award (e.g. something other than award on an all-or-nothing basis). Merely including separate line items – a common practice in all-or-none contracts – is insufficient to trigger this exception. When a contract provision or regulation provides for a different approach, even though the conditions for an exception are met, those provisions trump the exception.

The exception has been extended by the courts to punish contractors who use unbalanced bidding or when a windfall would occur. For example, the government deleted certain encapsulation work from an environmental remediation contract where the contract price was $52,000 but the contractor proposed $1,200 based on a subcontractor’s bid price for the work. In spite of the fact the encapsulation work was not severable in the contract the court ordered the price adjustment to be $52,000 because to provide $1,200 would result in an unfair windfall.

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