Bid Suppression

Another way companies collude to “rig” the bidding process is through what is referred to as bid suppression. This occurs when conspirators agree not to submit a bid so another can win the contract. For example, bid suppression would occur if construction company A, instead of submitting an artificially high bid, agrees with company B not to submit a bid at all. This suppression of company A’s bid would be performed in exchange for some sort of payment or kickback, or could be in conjunction with an arrangement where company B subcontracts portions of the job back to company A after winning the bid for the job. By keeping the low bidder out of the auction process, bidding firms can charge more for their services without fear of being undercut on price.