Bid Rigging Attorney
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What is bid rigging?
In many industries contracts are awarded by the requesting party soliciting competitive bids from vendors or possible suppliers. When those vendors or suppliers coordinate amongst each other in the bidding process, this can be illegal. Bid rigging comes in many forms. One frequent form is when competitors meet to agree in advance of which firm will win the bid. For example, vendors or bidders may agree to not bid on existing business or to place uncompetitively high bids on their competitors’ existing business. This type of bid-rigging scheme is illegal and is anticompetitive, however, it often happens. Other bid-rigging schemes include when subcontractors form a joint venture to submit a single bid to a main contract or when the subcontractor sends business to the losing bidders.
Experienced South Carolina Bid Rigging Attorney
Keibler Law Group represents corporations who have face anticompetitive conduct including bid rigging. For example, we represent clients who purchase protein products – chicken, pork, turkey, beef, tuna, etc. – the manufacturers of those products are alleged to have colluded to raise the price of those products. Some of the schemes an allegations, such as in the broiler chicken industry, include allegations of bid rigging. This is when competitors failed to compete or would submit false or artificially high bids to clients after having agreed with competitors not to compete.
Why would competitors agree to rig a bid?
Wouldn't they then miss out on potential business?
Yes, bid-rigging typically means one or more competitors miss out on business. However, this is because the bid-rigging typically goes both ways. Both bid-riggers fail to compete with each other – they both get to raise prices, without competition, on their customers.
Instead of the competitors trying to compete for available business and offer the best pricing and services, they will agree to not compete for certain pieces of business. For every variety of industry, this agreement can take a variety of forms. It is not often as simple as “don’t bid on Company X” or “I will bid high on Company Y.”
Bid rigging is a criminal act under the federal antitrust laws and can result in individuals going to jail. Individuals and companies also face civil liability. Bid rigging is a per se antitrust violation.
Here are some examples of bid-rigging and what that might look like:
Bid Rotation. This is when each of the conspiring companies takes their turn as the low bidder, while the others either don’t bid or bid poorly, such that the chosen bid will win.
Complementary bidding is when competitors designate the winning bidder for a particular contract and the other bidders, with no intention of getting the bid, will submit low bids intending to lose. The purpose of this scheme is to make the bidding process look competitive.
Bid suppression is when competitors and conspirators either refrain from bidding or withdrawal their bids.
Subcontracting in bid rigging is an arrangement in when conspirators that agree not to bid on contracts (bid suppression) or agree to submit a losing bid (complementary bidding) receive a subcontract in exchange for letting the “winning” party submit the top bid.