The United States has a strong policy of full and open competition for the award of all government contracts. Bid-Rigging occurs when a government contractor acts in collusion with other contractors to influence the award of a government contract. There are essentially four schemes contractors use to engage in bid rigging.
Bid Suppression is one common way of bid rigging. In these schemes, one or more competing contractors may agree not to bid, or to withdraw bids, to allow a particular contractor to win the contract. The contractors who suppressed their bids might be rewarded by being the contractor designated to win the next contract. Or, they may be paid-off by the winner in the form of a sub-contract.
Complementary Bidding is a scheme related to Bid Suppression. However, in this scheme, the contractors who are not the ones designated to win the bid actually submit bids on the contract. Their bids are designed to give the appearance of competition but are intentionally higher than or otherwise less viable than the bid of the contractor they agree will get this contract.
Bid Rotation is an allocation scheme in which the contractors agree among themselves to alternate which of them is the winning bidder. They may accomplish this by engaging in either bid suppression or Complementary bidding.
Market Allocation schemes are also commonly used to rig bids. In these schemes, the contractors allocate or divide up territory or specific contracts and agree amongst themselves only to bid on the contracts that have been allocated to them or that are in their designated region.
These practices are fraudulent because they can prevent the government from receiving the best products and services at a competitive price. Any government contractor that engages in any bid-rigging scheme to secure a government contract may violate the FCA, the antitrust laws and the anti-kickback laws which prohibit payment of any kind in exchange for a government contract.
If you know of fraud being perpetrated against the United States or one of the state governments and you would like to learn more about or would like to bring a qui tam whistleblower lawsuit against the wrongdoer, the whistleblower attorneys at Keller Grover LLP may be able to help you. The whistleblower lawyers at Keller Grover LLP understand qui tam litigation, including the whistleblower protection provisions, and strive to achieve the best possible results for their clients.