Bid rigging most often involves government contracts, and political pressure is often brought to bear on prosecutors over alleged bid rigging. These federal offenses can carry enormous fines and stiff prison sentences. In order to fight these charges you need an attorney with experience dealing with high profile cases on the federal level. Contact our criminal defense law offices today.

What is Bid Rigging?

Bid rigging is a form of fraud in which a commercial contract that is up for bid is promised by competitors to a predetermined company. The following are the most frequent types of bid rigging

  • Cover bidding - (also known as c omplementary bidding) - involves competitors that agree to submit bids that are too high or contain special terms which will prevent the bid from being accepted. The bids are designed to give the appearance of competitive bidding while concealing inflated prices.
  • Bid rotation - involves competitors who take turns being the winning bidder.
  • Bid suppression - occurs where some of the competitors agree not to submit a bid so that another company can successfully win the contract at a favorable price.
  • Subcontract bid rigging - involves bid suppression or cover bidding, on the condition that some parts of the successful bidder's contract will be subcontracted to the other competitors.

Penalties for Bid Rigging Convictions

Bid rigging is prosecuted by Antitrust Division of the United States Department of Justice, under the authority of the Sherman Act of 1890. The act prohibits any agreement among competitors to fix prices, rig bids, or engage in other anticompetitive activity. The maximum Sherman Act fine is $100 million for corporations and $1 million for individuals, though this can be increased to twice the gain or loss involved. The maximum Sherman Act jail sentence is 10 years in prison, though prosecutors may seek to add charges of mail fraud, wire fraud, or other violations.

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There are often innocent explanations when there is the appearance of bid rigging, like a high bid being the result of an incorrect estimate. In addition, a company can lawfully submit an intentionally unsuccessful bid for its own business reasons, such as wanting to stay on the bidders' list but being unable to complete the contract in question. The government must prove that there is collusion between the competitors in order to prove its case. Contact a bid rigging lawyer at our law offices today.

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