Four Types Of Bid Rigging In Florida Construction And How To Spot Them
It is common for most public agencies and many private companies to host a bidding process when beginning a construction process, which allows contractors and suppliers to compete for a piece of the pie. Florida’s “Little Miller” Act describes some of the basic requirements, but the process aims to promote a transparent, equitable process that awards the contract to the most qualified, cost-effective bidder. In practice, however, competition in bidding is stifled when construction companies exploit these procedures to benefit their own interests. Bid-rigging is unlawful as a form of collusion under Florida antitrust laws, so there are potential criminal consequences for tainting the bidding process.
Aside from the criminal implications, corruption in bidding also affects your financial interests. You may have legal remedies if you suffered losses as a result of misconduct, so it is critical to consult with a Florida bid protests, bid disputes, and public contracting lawyer about your concerns. It is also important to recognize the four key types of bid rigging schemes in the Florida construction industry, which include:
- Bid Suppression: Through this scheme, contractors might agree to not participate in the bidding process or withdraw an existing bid. The goal is to narrow down the pool of competitors, so that the chosen contractor will win the bid. In exchange for giving up the bidding opportunity, that company may receive a subcontract, payoff, or other beneficial treatment.
- Bid Rotation: This bid rigging plan involves an agreement by contractors to take turns being the lowest bidder, while all other participants intentionally submit a high amount. This rotation increases the potential that the company on the low end will win the bid and reap the benefits, and the other higher bidding contractors wait their turn. From the outside, it may appear that the process is legitimate, but bid rotation results in the property owner paying more for the project.
- Complementary Bidding: With this scheme, colluding construction companies intentionally lose a contract in such a way that makes it appear as if they are attempting to be competitive. A contractor might:
- Submit an inflated bid;
- Include conditions that make it ineligible to win the contract; or
- Fail to meet the bid requirements in its proposal.
This company’s bid would automatically be rejected, opening the door to other contractors who are in on the scam.
Spot the Signs of Bid Rigging: Even with these descriptions, it can be difficult to discern if your company is being harmed by misconduct in the bid process. Some telltale signs include:
- Projects repeatedly awarded to the same contractor or group;
- Subcontracts often being awarded to losing bidders;
- Shoddy construction services and/or supplies;
- Reports from other entities involved with the bid process, who may have experienced or witnessed misconduct.
Trust a South Florida Bid Protests and Disputes Attorney to Advise You
For more information on bid rigging in the Florida construction industry, please contact Linkhorst & Hockin, P.A. We can set up a consultation to review your circumstances, discuss potential options, and advise you on next steps.