In April of 2019, Marshall Holland, the owner of a Texas-based company that buys and sells used computers and computer parts, pleaded guilty in federal court for participating in a scheme to fix bids in online auctions set up and run by the Government Services Administration (“GSA”), the federal agency that manages federal properties and provides support services to federal government agencies.
According to court documents, from about February of 2017 to about May of 2018, Holland and his co-conspirators communicated with each other by phone, text message, and email before and during the online auctions to determine who would compete, refrain from competing, or win certain bids. They divided the winnings amongst themselves afterwards. As a result, Holland and his co-conspirators were able to subvert the competitive bid process and win bids that totaled at least $67,250.00 without much meaningful competition. This unscrupulous behavior has a negative effect on taxpayers and federal government agencies, depriving them of the benefits of competition such as getting the best possible value for the goods sold at the online auctions.
The circumstances surrounding this case serve as a reminder for public purchasers to review bids and watch out for any signs that vendors may be working together to subvert the competitive bidding process. While online bidding processes can help lower the risk of collusion by keeping bidders from encountering each other (and thus being tempted to collude) when dropping off physical bids, this case shows that bidders who are determined to collude can always find a way. (See previous editions of “Competition Matters” for
10 signs of possible vendor collusion,
patterns that can form if vendors collude,
physical clues of possible collusion, and
other red flags).
If you would like to speak with the Antitrust Section of the Ohio Attorney General’s Office about anticompetitive activity, please call 614-466-4328.