Some red flags that may indicate bid rigging is taking place include receiving identical bids from different companies, having bids that are very close to the same price, or seeing bids that are well above the estimated value of the contract.
What is Price Fixing?
Price fixing occurs when competitors agree to raise prices, eliminate discounts, or set a minimum price they will not sell below. A typical indicator of price fixing is when the same company repeatedly gets your business, but competitors never solicit you.
The federal government and taxpayers receive better goods and services at lower prices when the bidding process is open and competitive. However, sometimes competitors collude with each other to inflate prices and win government contracts. Bid rigging and price fixing are illegal and these types of collusion end up cheating American taxpayers.
The Antitrust Division of the U.S. Department of Justice enforces bid rigging and price fixing through criminal prosecution. In 2019, the Department of Justice formed the Procurement Collusion Strike Force to be in charge of detecting and investigating price fixing and bid-rigging conspiracies that undermine competition. The strike force is relying on whistleblowers to assist in the enforcement efforts.
In 2018, the DOJ’s Antitrust Division reached a major settlement with South Korean companies SK Energy Co. Ltd., GS Caltex Corp. and Hanjin Transportation Co. Ltd after a whistleblower came forward with information related to a fraudulent bid-rigging scheme. The companies agreed to a $236 million settlement to resolve allegations that the companies participated in a bid-rigging conspiracy related to fuel supply contracts with the United States military.
In April 2019, the qui tam attorneys at Baron & Budd settled a False Claims Act case brought forward by a whistleblower against Atlantic Diving Supply, Inc. (ADS). The company settled for over $16 million after it was alleged that ADS and its affiliates participated in bid-rigging schemes that harmed the government. Based on the allegations in that case, correspondence between company executives showed a long history of bid-rigging and pricing collusion over a period of several years. These alleged schemes allowed ADS to unfairly win government contracts at higher prices.
How Whistleblowers Can Help
Whistleblowers are crucial in the investigation and prosecution of bid-rigging and price fixing schemes. A potential whistleblower can be anyone working for or with government contractors or someone who is aware of anti-competitive practices that involve their employer, competitors, or other individuals.
The False Claims Act protects whistleblowers from retaliation and provides financial incentives for individuals that come forward with evidence of bid-rigging or price fixing fraud. These schemes are designed to enrich businesses, but they harm the federal government and taxpayers. The DOJ strike force values information provided by whistleblowers and whistleblowers can receive a portion of the money recovered from the case.
With more than 30 years of experience in Qui Tam cases, the attorneys on Baron & Budd’s whistleblower representation team have represented some 70 clients in government fraud cases returning over $5.4 billion to federal and state agencies, with whistleblower recovery shares as high as 49%. They are ready to help if you have evidence of bid rigging or price fixing in government contracts.
Please call (866) 401-5971 or complete our contact form if you would like more information. For more information, see What You Need to Know About Becoming a Whistleblower. Please understand that contacting us does not mean that you have established an attorney-client relationship with Baron & Budd, P.C.