Not sure it's illegal but I've never seen it done. Every front end specification I've seen says the contractor must hold their price for 30/60 days and many of them stipulate by what date the contract is expected to be awarded.

If the type of pricing you say was submitted when it wasn't asked for the bid would be tossed for not conforming to the required format. If that type of pricing was asked for you'd have pricing all over the place and you'd probably end up with a shitty contractors who bud extra low and bank on a drawn out approval process getting the job for less than they can actually do it for (and cutting corners like crazy)

The issue is that nobody really expected the approval to be that drawn out.