Unusual bidding patterns that can indicate collusive bidding arrangements by bidders include:
- Rotation of winning bidders by geographic area, time or other factors;
- Highly inflated bid prices compared to prior bids, cost estimates or market prices;
- Line item bid prices by different bidders are identical, very close or an exact percentage apart;
- Losing bidders are hired as subcontractors;
- Apparent connections between bidders, e.g.,
- Common addresses, personnel, phone numbers, etc.
- Same type face, format, calculation or spelling errors appear in two or more bid packages
- Several bidders submit sequential bid securities, or securities purchased at the same bank on the same day.
To best identify such patterns, it is helpful to collect and examine all bids from several other or prior similar projects using computer-aided techniques.
This red flag can indicate the following scheme:
Click on the scheme listed above to see more information on the scheme, a more complete listing of its red flags and steps to determine if it is actually present.