Federal Bid Rigging Defense - Federal Lawyer
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Federal Bid Rigging Defense

Experienced Bid Rigging Defense Lawyers Representing Federal Contractors and Subcontractors

Dr. Nick Oberheiden
Attorney Nick OberheidenFederal Bid Rigging Defense Team Lead
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Bid rigging in the federal procurement process violates federal law, and it can expose contractors, subcontractors, and their owners and executives to substantial penalties. These include criminal penalties in many cases. As a result, when faced with federal bid rigging allegations, a strategic defense is required—and this means that targeted entities and individuals need highly experienced defense counsel on their side.

Our lawyers, including our former federal prosecutors, represent federal contractors, subcontractors, and individuals in bid rigging cases nationwide. We have extensive experience in this area—including experience defending federal contractors and subcontractors against suspension and debarment. If your company is under investigation by federal law enforcement agencies (or if you personally are under investigation), or if you have been served with a federal grand jury indictment, we can help, but it is important that you contact us immediately.

Federal Bid Rigging: Explained

Federal bid rigging allegations can take several forms. When facing scrutiny in connection with a bid in the competitive bidding process for government contracts submitted through the federal procurement system, building a strategic defense starts with gaining a clear understanding of the specific allegations at hand. Different defenses are available in different cases, and asserting the right defenses is essential for avoiding suspension, debarment, criminal prosecution, and other unnecessary consequences.

So, what constitutes federal bid rigging? The U.S. Department of Justice (DOJ) prosecutes contractors, subcontractors, and their owners and executives in cases involving:

Bid Rotation

As the DOJ explains, in a bid rotation scheme, “all conspirators submit bids but take turns being the lowest bidder.”, ensuring each conspirator gets a turn being the winning bidder. While the DOJ notes that “[a] strict bid rotation pattern defies the law of chance and suggests collusion is taking place,” the DOJ is also able to identify far more sophisticated bid rotation schemes, and federal prosecutors will not hesitate to allege unlawful bid rotation when it appears that charges may be warranted.

Bid Suppression

The DOJ defines bid suppression as, “one or more competitors who otherwise would be expected to bid, or who have previously bid, agree[ing] to refrain from bidding or withdraw[ing] a previously submitted bid so that the designated winning competitor’s bid will be accepted.” Bid suppression cases often involve allegations of companies dividing bidding opportunities so that they can each obtain government business.

Complementary Bidding

Complementary bidding is also a form of bid rigging that can lead to suspension, debarment, or federal criminal charges. As the DOJ explains, complementary bidding “also known as ‘cover’ or ‘courtesy’ bidding . . . occurs when some competitors agree to submit bids that either are too high to be accepted or contain special terms that will not be acceptable to the buyer.” The DOJ identifies complementary bidding as “the most frequently occurring” form of bid rigging—which means that it is among the DOJ’s top concerns and law enforcement priorities.

Price Fixing

Price fixing involves “an agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold.” Companies can face federal bid rigging allegations if they use price fixing to artificially increase the prices they charge to the federal government, or if they use price fixing to restrict competition for federal contracts.

Subcontracting Schemes

While subcontracting is fundamental to the federal procurement process, the DOJ also considers subcontracting to be a red flag for bid rigging in certain circumstances. In particular, if a contractor that commonly bids on a particular type of project is listed as a subcontractor on a competitor’s bid, or if a low bidder withdraws its bid before being listed as a subcontractor under a competing bid, this is highly likely to draw scrutiny for possible bid rigging.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden



Lynette S. Byrd
Lynette S. Byrd

Former DOJ Trial Attorney


Brian J. Kuester
Brian J. Kuester

Former U.S. Attorney

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney

Local Counsel

John W. Sellers
John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara
Linda Julin McNamara

Federal Appeals Attorney

Aaron L. Wiley
Aaron L. Wiley

Former DOJ attorney

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (DOJ)

Chris Quick
Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow
Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Red Flags for Bid Rigging (According to the DOJ)

Along with questionable subcontracting, the DOJ has identified several additional red flags for possible bid rigging. When facing scrutiny for possible bid rigging, it is critical to identify any relevant red flags and address them proactively in the contractor, subcontractor, or individual’s defense. The DOJ divides these red flags into three main categories. Some examples in each of these categories include:

Bid Patterns

  • The same company always wins a particular procurement, particularly if other companies routinely submit unsuccessful bids.
  • Some bids are significantly above expected bid amounts or significantly exceed contractors’ previous bids for similar work.
  • A successful bidder subcontracts work to unsuccessful bidders under the same contract.
  • Fewer than the normal number of contractors submit bids, or contractors that typically submit bids stop bidding.
  • A company bids significantly higher on some contracts than others (suggesting possible complementary bidding).

Bid Pricing

  • Competitors submit bids with identical or substantially similar pricing.
  • Contractors submit bids with identical prices over a prolonged period during which market prices have changed.
  • Contractors submit bids with increased pricing without a change in market prices.
  • Contractors eliminate discounts and other incentives that were previously offered under comparable bids.
  • Subcontractors’ prices are higher than normal, or a bid includes subcontractor pricing for work the bidder typically performs in-house.

Suspicious Statements and Behavior

  • Bids contain incorrect calculations or other irregularities that suggest the bidders’ pricing has been altered or manipulated.
  • Bids contain whiteouts or other alterations suggesting last-minute pricing changes.
  • Multiple bidders submit proposals with similar language, handwriting, or formatting.
  • A contractor that is incapable of performing under a proposed contract submits a bid (suggesting possible complementary bidding).
  • Any statements suggesting that competing contractors or subcontractors have communicated regarding pricing or other contract terms.

Again, these are just examples. Additionally, while these all can be indicative of bid rigging, they can also have valid explanations in many cases. With this in mind, when facing a bid rigging investigation (or federal charges related to alleged bid rigging), it is critical not to make any assumptions, but instead to make informed decisions based on a clear understanding of the relevant facts and the advice of experienced federal defense counsel.

Defending Against Federal Bid Rigging Allegations

While federal bid rigging allegations can take many different forms, there are also many possible defense strategies available to contractors, subcontractors, and their owners and executives. When facing these allegations, the key is to execute an informed defense strategy based on all relevant facts and circumstances. Oftentimes, federal allegations will only tell part of the story, and exposing facts previously unknown to the federal government will make clear that prosecution is unwarranted.

Of course, providing information to the federal government can also be risky—and both companies and individuals need to be very careful when doing so. At Oberheiden P.C., we work closely with our clients to help them make informed and strategic decisions; we communicate with federal authorities on our clients’ behalf; and, we work to quickly secure favorable resolutions that protect our clients’ finances, freedom, and ability to do business with the federal government.

FAQs: Defending Against Federal Bid Rigging Allegations

How (and When) Does the Federal Government Investigate Bid Rigging?

The federal government investigates bid rigging any time federal officials, agents, or prosecutors have reason to believe that one or more entities or individuals have participated in submitting a noncompetitive bid. During bid rigging investigations, federal authorities use all investigative tools at their disposal, including subpoenas, search warrants, and interviews, among others.

Is Bid Rigging a Federal Crime?

Bid rigging is a federal crime under the Sherman Act. Companies and individuals accused of bid rigging can face charges under various other criminal statutes as well. These include the federal fraud, conspiracy, and money laundering statutes, among others.

What Are the Penalties for Federal Bid Rigging?

Under the Sherman Act, companies can face multi-million-dollar fines if convicted of bid rigging in federal district court, and individuals can face up to a $1 million fine and 10 years of federal imprisonment. Other crimes frequently charged in federal bid rigging cases carry substantial fines and prison sentences as well.

Can Bid Rigging Lead to Debarment for Federal Contractors?

Yes, along with criminal prosecution, accusations of bid rigging can also lead to debarment for federal contractors. This is a significant risk; and, when targeted in bid rigging investigations, contractors must ensure that they duly address all potential ramifications. While avoiding prison time may be your most immediate concern, if you are able to avoid prison time you will also want to do everything possible to preserve your ability to bid on federal contracts.

What Should Federal Contractors Do When Accused of Bid Rigging?

Federal contractors accused of bid rigging should engage experienced federal defense counsel as soon as possible. Federal bid rigging investigations can move quickly, and they can present substantial risks not only for companies, but also for their owners and executives. At Oberheiden P.C., we handle federal bid rigging investigations nationwide, and we can provide representation on an emergency basis if necessary.

Contact the Federal Bid Rigging Defense Lawyers at Oberheiden P.C.

If you are facing allegations of bid rigging, our team can get to work immediately protecting you and your company. To speak with an experienced federal bid rigging defense lawyer at Oberheiden P.C. in confidence as soon as possible, call 888-680-1745 or tell us how we can reach you online now.

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