OIG ACADEMY DEMO LESSON
Bid Rigging
The four main types of bid rigging and four red flags to keep in mind
25 minutes
WHY IT MATTERS
Bid rigging costs taxpayers real money
Up to 60%
How much bid rigging can raise prices. Cartels typically overcharge 10% to 20%.
Source: UK CMA, citing OECD research
200+
Investigations opened by DOJ’s Procurement Collusion Strike Force since 2019, with 85+ guilty pleas and convictions.
Source: DOJ, as of April 30, 2026
INTRODUCTION
Bid rigging refers to the situation when:
Competitors agree in advance who will win.
Complementary bidding
Competitors submit bids designed to lose. A bid may be intentionally high or deliberately nonresponsive.
Bid rotation
The same competitors keep bidding, but they agree to take turns submitting the lowest bid.
Bid suppression
One or more competitors agree not to bid, or agree to withdraw, so that a selected bidder wins.
Customer or market allocation
Competitors divide customers, territories, or types of work and avoid genuine competition outside their assigned area.
TYPE 1 OF 4
Complementary bidding
Competitors submit bids designed to lose. A bid may be intentionally high or deliberately flawed.
| Bidder | Bid amount | Result |
|---|---|---|
| Lakeshore Paving Co. | $1,184,000 | Awarded (lowest bid) |
| Brightwater Construction | $1,512,000 | Not awarded |
| Hadley & Sons Contracting | $1,547,500 | Not awarded |
| Commonwealth Site Services | $1,589,000 | Not awarded |
| Tri-County Asphalt | $1,468,000 | Disqualified: insurance certificate late |
Illustrative example
Source: DOJ Antitrust Primer
TYPE 2 OF 4
Bid rotation
The same competitors keep bidding, but they agree to take turns submitting the lowest bid.
| Contract year | Harbor Asphalt | Pinecrest Paving | Ridgeway Civil | Award |
|---|---|---|---|---|
| 2023 | $402,000 | $437,000 | $445,000 | Harbor Asphalt |
| 2024 | $468,000 | $414,000 | $452,000 | Pinecrest Paving |
| 2025 | $471,000 | $466,000 | $423,000 | Ridgeway Civil |
| 2026 | $431,000 | $474,000 | $481,000 | Harbor Asphalt |
Illustrative pattern
Source: DOJ Antitrust Primer
TYPE 3 OF 4
Bid suppression
One or more competitors agree not to bid, or agree to withdraw, so that a selected bidder wins.
| Year | Bidding Companies |
|---|---|
| 2020 | Norcross Paving, Eastfield Civil, Apex Roadworks, Ridgeline Co., Marlowe & Sons, Tidewater Asphalt |
| 2021 | Norcross Paving, Eastfield Civil, Apex Roadworks, Marlowe & Sons, Tidewater Asphalt |
| 2022 | Norcross Paving, Apex Roadworks, Ridgeline Co., Marlowe & Sons |
| 2023 | Norcross Paving, Eastfield Civil, Apex Roadworks, Ridgeline Co., Tidewater Asphalt |
| 2024 | Norcross Paving, Eastfield Civil, Marlowe & Sons, Tidewater Asphalt |
| 2025 | Norcross Paving |
| 2026 | Norcross Paving |
Possible compensationA later award, a subcontract, a supply agreement, or a disguised payment.
Source: DOJ Antitrust Primer
TYPE 4 OF 4
Customer or market allocation
Competitors divide customers, territories, or types of work and avoid genuine competition outside their assigned area.
Territory pattern
North district
Granite Grounds Co. always wins. Bayline and Summit do not bid or submit high bids.
South district
Bayline Services always wins. Granite and Summit do not bid or submit high bids.
State accounts
Summit Facility Group wins. The other firms focus on local accounts.
A geographic pattern can follow travel costs. Concern rises when capable firms avoid nearby work without a business reason.
Source: DOJ Antitrust Primer
SUSPICIOUS INDICATORS
The seventeen red flags
Winner subcontracts to losers
A winning bidder subcontracts part of the business to one or more losing bidders.
Clear gap
A clear gap between the winner and all others — the “number-to-bid-above” situation.
Split the contract
Companies appear to have split the contract — each low on some aspect, high on others.
Significant increases
Significant increases by most bidders with no substantial cost increase.
- 5Identical bids. Identical bids from different companies — line items or lump sum.
- 6Bids above estimate. Bids well above the agency’s estimate, or above comparable bids by the same companies elsewhere.
- 7Physical alteration. Physical alteration of bids, especially at the last minute.
- 8Line items higher. Particular line items much higher for some bidders — no relation to cost.
- 9Bids very close. All bids very close together — bidders knew each other’s prices.
- 10Same increment. The same increment between each company’s bid.
- 11High bids when scarce. All companies bid high when work is known to be scarce.
- 12Different bids nearby. A company gives different bids for the same line item on nearby contracts.
- 13Physical evidence. Physical evidence of collusion — same handwriting, same envelopes, same math or spelling errors, same fax number.
- 14Qualified bidders no-bid. Qualified bidders do not bid, especially if they initially took steps to bid.
- 15Re-bid same order. On a re-bid, bidders return in the same order, or some fail to re-bid.
- 16Prices drop with new bidder. Prices drop mysteriously when a new bidder appears.
- 17Competitors meet. Competitors meet shortly before or after bids are submitted.
The seventeen red flags are the “Suspicious Indicators” from the U.S. DOJ Antitrust Division’s Antitrust Primer for Agents and Procurement Officials — also see the Procurement Collusion Strike Force. A red flag is a reason to look but on its own not proof of collusion.
ACTIVITY CASE 1
Snow plowing
One-season citywide snow and ice services. Bids opened October 7.
| Bidder | Season price | 10-wheel plow truck |
|---|---|---|
| Northline Snow LLC | $214,000 | $168 per hour |
| Harbor Plow & Sand | $281,500 | $232 per hour |
| Pioneer Winter Services | $286,900 | $236 per hour |
File facts
- 1Riverton advertised the contract for three weeks, and three firms submitted bids.
- 2All three bids arrived on time with the required bid deposit and insurance certificate.
- 3Riverton requires a 90-minute response time and GPS tracking on every truck.
- 4Northline’s garage is eight miles from the city’s public works yard.
- 5Northline’s season price is 24 percent below Harbor’s, while Harbor and Pioneer are within 2 percent of each other.
- 6Northline cleared the city’s sidewalks last winter, and there are no complaints on file.
- 7Two weeks after the award, Northline proposes to subcontract the east-side routes to Harbor Plow & Sand.
- 8Last winter Riverton had eleven plowable storms, close to its ten-year average.
Which facts merit a further look?
Answer: facts 5 and 7
This looks like a clear gap between the winner and all others — the “number-to-bid-above” situation (listed above as Red flag 2).
In this file. Northline’s season price of $214,000 is 24 percent below Harbor’s $281,500, while Harbor and Pioneer sit within 2 percent of each other at $281,500 and $286,900. The hourly truck rates show the same shape: $168 against $232 and $236. The two losing bids cluster together, well clear of the winner, as if both firms knew the number they needed to stay above.
This looks like a winning bidder subcontracting part of the business to one or more losing bidders (listed above as Red flag 1).
In this file. Two weeks after winning, Northline proposes to hand the east-side routes to Harbor Plow & Sand, a firm that bid and lost. A subcontract to a losing bidder can be the losing bidder’s reward for staying high. Read it together with Fact 5: the firm that stayed well above the winner now receives part of the work.
ACTIVITY CASE 2
Elevator maintenance and repairs
Two-year full-service agreement for municipal buildings.
| Bidder | 2-year maintenance | Repair labor | Emergency call |
|---|---|---|---|
| Atlas Elevator | $118,400 | $235 per hour | $1,450 per call |
| Meridian Lift | $161,900 | $148 per hour | $1,520 per call |
| Summit Vertical | $158,300 | $229 per hour | $780 per call |
File facts
- 1The agreement covers 14 elevators and 2 wheelchair lifts in six municipal buildings.
- 2Riverton awards each of the three line items separately to the lowest eligible bidder.
- 3All three firms hold state elevator licenses and attended the optional site visit.
- 4Two of the buildings have elevators more than 30 years old that need frequent repairs.
- 5Meridian’s repair crew is based in Riverton, while Atlas and Summit dispatch from about 25 miles away.
- 6Each firm is lowest on exactly one line item and well above the others on the other two.
- 7The maintenance scope and response times match the city’s previous agreement.
Which facts merit a further look?
Answer: fact 6
This looks like companies splitting the contract — each low on some aspect, high on others (listed above as Red flag 3).
In this file. Because Riverton awards each line item separately (Fact 2), the pattern hands every firm one piece of the work. Atlas wins maintenance at $118,400 against $158,300 and more. Meridian wins repair labor at $148 an hour against $229 and more. Summit wins emergency calls at $780 against $1,450 and more. On each line, the two firms that are not meant to win are far above the one that is.
ACTIVITY CASE 3
Outdoor basketball court construction
Two courts, drainage, paving, fencing, lighting, and acrylic surfacing.
| Bidder | Oak Street, 2024 | Riverside Park, 2026 | Change |
|---|---|---|---|
| Pace Siteworks | $316,000 | $412,000 | +30.4% |
| Greenline Civil | $329,500 | $431,000 | +30.8% |
| Metro Court Systems | $341,000 | $447,000 | +31.1% |
File facts
- 1The Riverside Park courts have the same size, layout, and specifications as the 2024 Oak Street courts.
- 2All three firms also bid on the Oak Street project in 2024.
- 3The city’s cost index for court materials rose 5 percent between the two bids; every bid rose about 30 percent.
- 4Pace is based in Riverton and has built four municipal courts in the region since 2020.
- 5The acrylic surface requires a specialty crew, and each bid names its surfacing subcontractor.
- 6Greenline’s and Metro’s bid forms contain the same misspelling, “acyrlic,” on the same line.
- 7All three bids arrived between 1:10 and 1:45 p.m., before the 2:00 p.m. deadline.
- 8The parks department wants the courts finished before the youth league starts in June.
Which facts merit a further look?
Answer: facts 3 and 6
This looks like significant increases by most bidders with no substantial cost increase (listed above as Red flag 4).
In this file. The courts are the same (Fact 1) and so are the bidders (Fact 2). The city’s cost index for court materials rose only 5 percent, yet every firm raised its price by 30 to 31 percent. When all the bids move up together by far more than costs, the firms may have agreed to raise prices.
This looks like physical evidence of collusion — same handwriting, same envelopes, same math or spelling errors, same fax number (listed above as Red flag 13).
In this file. Two supposedly independent bid forms contain the same unusual misspelling, “acyrlic,” on the same line. A shared error suggests that one firm prepared or copied the other’s paperwork, or that both worked from a common draft.
REFERENCES
U.S. Department of Justice sources
Definitions and numbered indicators
Antitrust Primer for Agents and Procurement Officials
https://www.justice.gov/atr/preventing-and-detecting-bid-rigging-price-fixing-and-market-allocation-post-disaster-rebuilding
Current four-part screening resource
https://www.justice.gov/atr/red-flags-collusion
Training and reporting information
Procurement Collusion Strike Force
https://www.justice.gov/atr/procurement-collusion-strike-force
Links verified September 22, 2026