Are you aware of the fact that you may be guilty of the crime called bid-rigging, if you share details or agree to submit bids at prearranged amounts? Yes! This is a prohibited business practice that eliminates competition among suppliers and is considered illegal in majority of countries.
Types of bid-rigging
In general, bid-rigging takes a variety of forms and it includes the following:
- Bid withdrawal and suppression: Bid withdrawal is nothing but withdrawing a winning bid such that an agreed rival become successful instead. On the other hand, bid suppression takes place when business consents not to tender to ensure that the already decided participant takes over the dealand it mainly occurs when a series of contracts are awarded.
- Non-conforming bids is all about adding terms and conditions purposely knowing that it will not be acceptable by the client.
- Bid rotation: In this process the bidders take turns to submit lower bids so that each bidder wins in a rotation basis, hence this is called as bid rotation. The terms may show a discrepancy depending on the competitors involved and a hard and fast bid rotation pattern holds up the law and conveys that an act of agreement is taking place.
- Cover bidding: This is one type of big rigging where the rivals pick out a winner intentionally and then at the time of bidding the winner deliberately bids above an agreed amount to create an illusion that the selected winner’s quote is competitive.
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