Bid rigging, more formally known as bid collusion, is a serious matter. In fact it can be a crime. Any allegation of bid collusion should be backed up by tangible evidence. It is not an allegation which should be based on speculation or asserted for tactical advantage.
In a recent case out of Indiana, a disappointed bidder alleged that the public project owner’s architectural firm had structured a bid process to allow the architect to manipulate the system and disqualify any bidder that underbid a favored bidder. The allegation of favoritism arose from the fact a principal in the architectural firm was a close personal friend of a principal in the construction company which allegedly received the preferential treatment.
The court said the structure of the bid process, while unorthodox, did not violate the state competitive bidding statutes. And the allegation of favoritism was conjecture and speculation, unsupported by substantive evidence.
Do you feel collusive bidding practices are as common today as they were in the past? Have there been instances where you were quite certain there had been bid collusion but were unable to prove it? I welcome your comments.
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Posted by: Ron Murphree | 04/14/2011 at 11:27 AM
Bid Rigging is a common practice in many small rural areas and most times the facilitators of the process don't realize it is illegal. In these areas the thought is "this is the way we have always done it, why change now?". It doesn't make it right, but it is a fact of dealing with local or rural governments. And as you stated above most evidence is heresay and not tangible. If you rock the boat to hard with these small governments you can guarantee to never win a bid with that entity.
Posted by: George | 04/14/2011 at 11:27 AM
Bid rigging is as prominet as ever . The unions utilize a ''target fund'' to fund a contractor benifit package so the contractor can under bid non union contractors by giving them the benfit money ,30% of wages, to the union contractor upfront.
The wordage used in bidding states the public entity can waive any informalities during the bid process. This is utilized by many public entities to pick their desired contractor. This wordage needs to be deleted from ALL contracts and bid doc's.
Communities like peters twp and upper saint clair (both in pa)
both home rule communities (or kingdoms as they beleive they are)
are constantly making up their own rules and criteria to rig the bids to their desire. They actually beleive that their kingdoms don't have to follow the rules as every other political subdivision in pa. In western pa this is prominent in the home rule areas.
In peters twp. Manger mike silvestri actually made his community pay $16,000 more for a project so he could pick his contractor
In upper saint clair the manager did not pay a contractor $230,000
because they wanted a union contractor.
In south fayette the municipale authority rebid the project so they could pick their contractor . this type of conduct is rampet in pa.
Posted by: Dennis | 04/14/2011 at 11:42 AM
This article speaks for itself:
http://www.theglobeandmail.com/news/national/quebec/ex-mayor-among-seven-charged-by-quebec-anti-corruption-squad/article1893057/
Posted by: Jean L. | 04/14/2011 at 11:50 AM
I've only been aware of it on one project that I worked on and it was subtle. At the bid 'opening' the GC (CMc) submitted a bid for a portion of the work and was the only responsive bidder. Hmmm... They oblivious chose to solicit bids from non-responsive subcontractors. But as it was within the estimated range and nothing could be proved it was excepted by the owner.
Posted by: Andrew | 04/14/2011 at 11:54 AM
The comments by George are right on the money, and I have done my best to educate the local officials. I see it happen in the architect selection process. In our small community, our State qualifications based selection laws are blatantly ignored and for each project the local government hires the same architecture firm without any sort of RFP or interview process. I have talked to my local politicians and head bureaucrats, but they always come up with some sort of excuse. If I apply too much pressure it will ensure that my firm will never be selected. Or worse, if it ever ends up in the paper it will be twisted around to make it sound like our firm has a bad case of sour grapes.
Posted by: Bob Smith | 04/14/2011 at 12:00 PM
Seems like everyone is missing the point here, bid rigging or lack of competition means taxpayers are being overcharged, schools aren't able to get books and computers for the kids, money goes to a few people instead of into things like cancer research. Our Major Projects division which distributes lighting nationally would not exist if it weren't for lack of competition on big projects. We make a living by spoiling their fun!
Posted by: Steve Bellwoar | 04/14/2011 at 12:58 PM
Bid rigging is like discrimination - of course there are preferences.
But it is hard to prove a negative - the question is whether due process of merit and equity were followed.
Posted by: Rurbane | 04/14/2011 at 12:59 PM
Union pinpoint money is not bid rigging...it is simply open contract negotiation tool between the Union and the union sub. If this is rigging then grossly underpaying and weak safety rules are rigging by the non union shops. The big trick is when jobs are withdrawn and rebid.
Posted by: Joseph Cox | 04/14/2011 at 02:49 PM
The kind of bid rigging i have heard about is the kind where the local contractors get togethor before the bid and decide whose turn it is so they don't have to cut each others throats with tiny profit margins. I have seen people go to jail for this but i haven't seen it lately.
Posted by: Joe Blow | 04/14/2011 at 03:28 PM
Which are we talking about --Bid-rigging by the bidders or bid - rigging by the local government employees? There are many forms of bid rigging that I have seen. Most ignored are the "Gate-Keepers" of WMBE/SLBE certification! These are supposed to be local public servants paid by the local taxpayer dollars to do something "good" for the disadvantaged businessman. However, they get a "king" complex when they realize they can bestow this certification upon those they wish...and create a rally of "friends" -- a little side money or just ease of doing their cushy jobs.
Women - owned businesses in our city must jump through hoops get past the minority-run "Equal Opportunity" department to get certification. Unequally applied rules. They actually discriminate against minorities or disadvantaged that they are not a part of -- by moving slowly, making "mistakes", claiming to not understand or a lack of staff, loosing applications, it goes one and on... a whole lot of "plausible undeniably". Yet their friends and fellow minorities get certification without any legal license or business very quickly and get put on all the rfp lists sent to bidders for their good faith efforts. This department is a waste of tax payers money and their own discrimination board - just another abuse of power without anyone checking their activities.
Posted by: NFord | 04/15/2011 at 04:58 AM
Yeah it feels good to get the shaft when you are only 30 min. from a Military institution CPMC and you are a WBE and certified and the company you are bidding a job for is in Florida and uses there "Favorite" Company for the job when your bid was a good bid for the project. The other Company in Florida has to pay for travel to California and charged a asstronomical amount for the job.
Posted by: Dick | 04/16/2011 at 12:44 PM
As public projects are put up for bid, the requirements are made to eliminate prospective bidders for the process or are put out so late that only insiders have time to work though the bid. Too many times and in too many states have we seen this. It was only after I complained about my expenses from past bids that I was actually awarded one. My feeling then,as is now is, If the gate-keepers think they can get away with it and make some easy dough they will
Posted by: Thomas J. Cook | 04/17/2011 at 11:06 AM
As public projects are put up for bid, the requirements are made to eliminate prospective bidders for the process or are put out so late that only insiders have time to work though the bid.
Posted by: medical contract manufacturing | 04/28/2011 at 03:58 AM
All the rigging I know is one that gives fall protection for all kinds of loads. It's sad to think that this kind of cheating could be rampant in our industry.
Posted by: fall protection | 01/17/2012 at 09:45 PM