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For this to work, your friend would need to have a company registered on SAM. Although, I can confirm that this was not the case in this bidding. I am the bidder who bid $499 - which is the next lowest bid after $1. And no, I did not ask a friend to bid $1.

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Why did you bid $499 for what is clearly more than $499 of work?

I understand the work is more, however, I recently setup my consulting business and this seemed like a great opportunity to get the name out there and expand the network.

I don't think that's obvious. There aren't necessarily easily interchangeable contacts available for more than that, and for many people $500 in under ten days is more than they would earn in their job. Students for example could easily be qualified to do this, perhaps be on a break and have time, and would otherwise be earning nothing. Not to mention the resume padding and connection building opportunities.

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