Bid Rigging

Like price fixing agreements, the Sherman Act makes all bid rigging schemes automatically illegal. “Bid rigging” refers to an agreement between competing bidders for a contract job. Competing bidders will agree to reduce competition in the bidding process by any number of methods, including submitting artificially high bids or having one firm agree not to submit a bid at all. By preventing the lowest possible bid from being submitted, a bidding firm is able to charge a premium price for its services. This deprives the contracting party of the benefit of the competitive bidding process (i.e. performance of the job at the lowest possible cost). Often government agencies take bids for jobs they contract out such as highway construction, and can bear the brunt of bid rigging schemes. This type of antitrust violation can take many forms.