Not in the classic sense. It stinks to high hell, and there's a good possibility that they ran afoul of the law somewhere. But what they were doing was basically negotiating a "loss leader". In most government contracting though, there is a restriction on this kind of "cost shifting". Without seeing all the pricing structure it's hard to figure it out. What we will probably hear though is that this practice will be terminated by the government, one way or another.
My company has negotiated deals with various providers in which we agree to funnel all of our business to them. In exchange, we get a pre-negotiated price. It isn't the lowest, but it's not the highest either. We get several benefits from it, one of them being priority as well as "guaranteed" service. One of them is with a car rental company. We are guaranteed a car when we arrive. What that means is that they'll give us any car they have to serve the reservation. And they'll basically "screw over" individual retail customers to give it to us (they'll give us a car they were holding for another reservation if they are running short). I've seen it in action. Went into Dallas near some big Cowboys game. The sign said "no cars available". I walked up and they first said that they didn't have any cars, I'd have to wait. Then they looked up my reservaton. She call's her manager over and he goes "oh, yeah, well, um, here, give him this one." She responds something about "but that's for, um, well, see, this guy, and look at the rate!". Yeah, I know, gotta do it though" was the response.
What is amazing in this situation is that the GOVERNMENT hasn't negotiated these deals. They gotta be a huge customer. So you'd think they'd at least negotiate some fairly "low" rates or something. Someone dropped the ball BAD.
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