One form of collusion prohibited by the Sherman Antitrust Act is bid rigging. When business contracts are awarded by soliciting competitive bids, competitors can utilize bid rigging to artificially raise prices[2]. Bid rigging is most common in markets where there are few sellers, the product produced by competitors is homogeneous, frequent purchases allow competing vendors to become familiar with one another, and/or bidders are congregated in the same building or town. While bid rigging is often difficult to detect, there are certain patterns that can indicate its existence. Suspicious patterns include the same company consistently winning a procurement, the same companies taking turns being the successful bidder, and fewer than the normal number of competitors submitting bids[3]
Even worse is being declared the lowest bidder at bid opening only to find out that the second-lowest bidder is protesting your bid, claiming it defective, and demanding it be thrown out. Under either scenario, a careful pre-bid review of your bid documents and a post-bid review of your competitor’s bid documents for bid defects can be decisive in determining who is awarded the project.
Greeson of Bradley Arant Boult Cummings LLP Originally published on March 5, 2024 Bradley has been publishing an ongoing survey of state-level bid protest processes and procedures (see, e.g., our posts on bid protests in North Carolina , Georgia , the District of Columbia , New York , Virginia , and Alabama ). For the next state in this series, we focus on the bid protest procedures in Pennsylvania
Quigley of Bradley Arant Boult Cummings LLP Bradley has been publishing an ongoing survey of state-level bid protest processes and procedures (see, for example, our post on “ Bid Protests in New York ” and our “ Update on Bid Protests in Alabama ”). For the next state in this ongoing series, we focus on the bid protest procedures in the Commonwealth of Virginia
The second offering of the season will be our Risk Workshop: Analyzing Risk and Understanding the Bid Process in October
There are three basic types of contract surety bonds, which are the following: The bid bond assures that the bid is submitted in good faith and that the contractor will enter into the contract at the price bid and will provide the required performance and payment bonds
A bid bond provides financial protection to an owner if a bidder is awarded a contract but fails to sign the contract or fails to provide the required performance and payment bonds. The bid bond also helps screen out unqualified bidders, as a surety company will not issue a bid bond on behalf of a contractor that it believes cannot perform the contract obligation. Before issuing a bid bond, the surety company prequalifies the contractor, by thoroughly investigating the contractor and determining that the contractor has the ability to carry out the work under the construction contract
Rectification or Mitigation Coverage covers the cost to rectify a professional error before a claim is made...This is especially problematic with “mixed” or “ambiguous” claims involving design errors and installation errors
ACI advised that it would not have bid on the contract had it known of the restriction...If it cannot, the contractor will need to request that the Contracting Officer waive the requirement to use an approved surety prior to submitting its bid or proposal
[1] The violative bid specification required that the price of the base bid determine the low bidder, without consideration of prices bid for alternate work.