Usually contracts for “units” of an item are based on a bulk purchase price from a minimum to a maximum.
I have a government contract for my service. It is a fixed rate per unit and I have a minimum number of units. But they can purchase up to X units, giving me first right of refusal. I don’t have to provide more than the minimum, but if they want more, I am gauranteed the rate through the maximum units.
Does that make sense?
Yes it does.
I’ve done a couple of federal contracts but most of mine are state contracts. We’re talking blanket PO’s and I have been awarded several over the years. The PO is only good up to that amount once it’s reached a new PO must be issued or they can ask for an extension. While that may sound good I’ve also had some where they never made a purchase. The key to looking at this is how many if any purchases have they made on this or any other PO.