What is bid rigging?

Bid rigging occurs when contractors misrepresent that they are competing against each other when, in fact, they agree to cooperate amongst themselves in an effort to increase job profit.

bidding

Competitors agree in advance who will submit the winning bid on a contract awarded through a competitive bidding process.

Bid rigging includes:-

  • Complementary bidding – where Bidder A shares its proposed bid price so that Bidder B can price higher to ensure that Bidder A wins the contract
  • Bid suppression – where Bidder A agrees to suppress his bid (either by not bidding or withdrawing his bid) so that Bidder B can win the contract
  • Bid rotation – where Bidder A and Bidder B both bid but take it in turns to submit the lowest priced bid to win the contract
  • Non-conforming bids – where a bidder deliberately submits a bid that does not comply with the specifications of the tender requirements
  • Subcontracting – where a low bidder will agree to withdraw its bid in favor of the next low bidder in exchange for a lucrative subcontract that divides between them the illegally obtained higher price

In bid rigging, you must watch for:-

  • Unusual bid patterns: too close, too high, round numbers, or identical winning margins or percentages
  • Different contractors making identical errors in contract bids
  • Bid prices dropping when a new or infrequent bidder enters the competition
  • Rotation of winning bidders by job, type of work or geographical area
  • Losing bidders hired as subcontractors
  • Apparent connections between bidders: common addresses, personnel or telephone numbers
  • Losing bidders submitting identical line item bid amounts on nonstandard items
  • Fewer than the normal number of competitors submits bids
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