Members of a collusive bidding scheme can agree to rig the bidding process in order to allow each member of the group to win a contract at an inflated price on a rotating basis.
The rotation can be based on geographic area – one road contractor gets all the work in one region, another company all the work in another – or by market, type of job or by time. A “losing” bidder might receive a percentage of the winning bidder’s profits or be hired as a sub-contractor, as it awaits its turn to win.
Do a thorough due diligence background check to determine if there are connections between rotating bid winners.
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 the scheme is actually present.