All of the following basic tests for collusive bidding can be conducted if the data, listed below, primarily from the bidding documents, is available.
Tests for collusive bidding:
- Different bidders have the same addresses, phone or fax numbers or email addresses
- Persistent high bid prices:
- Compare line item and total bid prices to cost estimates, prior bid prices, industry averages, etc.; note significant price increases
- Look for unusually high line bid prices in losing bids (e.g., bid prices at least 50% higher than competitor’s prices)
- Unusual bid patterns:
- Identical line item bid prices submitted by different bidders
- Line item or final bids from different bidders that are an exact % apart
- Bids that are too close (e.g., within 1%) or too far apart (e.g. more than 20% apart) vs. the norm
- “Ping-ponged bids” (e.g., in first bid, Bidder A quotes $100 per lot and Bidder B $200 per lot; in second bid with identical terms, Bidder A quotes $200 and Bidder B quotes $100.
- Pattern of losing bidders becoming subcontractors
- Rotation or allocation of winning bidders by time, geography, job description, product line or market
- Same bidders rebid in the same order in later rounds of bidding
- Sequential bid securities submitted by different bidders:
- List bid securities by contractor, bank, date and number, note sequential securities and those issued by the same bank on the same day
Data required to conduct the tests:
- Job info:
- Job description, location, bidding date
- Bidders’ info:
- Bidder’s names, addresses, telephone and fax numbers and email addresses
- Bidding info:
- Number of bid packages sold; line item and final cost estimates; bid prices for key line items and total bid prices for all bidders; disqualified bidders; subcontractors
- Bid security info:
- Name of issuer, date and place issued, serial number