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Red Flag Series No. 2: Physical Clues in Bid Packages Indicating Possible Vendor Collusion

In this edition of “Competition Matters” we feature the second installment of our “Red Flag” series of articles with tips on spotting possible vendor collusion. The tips are intended to help you recognize warning signs, or red flags, that might indicate illegal activity. 
Keep an eye on the physical characteristics of the bid packages submitted by (or supposedly submitted by) different vendors that should lead you to take a closer look at the bids. As a general rule, be suspicious of similarities in bids of different vendors that would be unlikely to occur unless those vendors were communicating and/or working together. 
Here are some examples: 
  • Similarities in the preparation of the bid package, such as:
    • Same handwriting.
    • Unusual typeface or font used by multiple vendors.
    • Identical stationary or unique type of envelopes.
    • Similar or unique postage stamps or postmarks. 
  • Identical fax numbers used by different companies. (Separate, competing companies should not be using the same fax number.)
  • Identical math errors showing up on two separate bids.
  • Same spelling errors appearing in separate bid packages.
  • Same contact person listed in different vendors’ bid packages.
  • For electronic bid submissions, similarities in the documents’ metadata, such as the author’s name.
In addition to similarities appearing in multiple competing bids, watch out for evidence of last-minute changes to the bids, such as white-outs, erasures, or other physical alterations. Haphazard-looking alterations could mean that the changes happened during a conversation among bidders – perhaps just moments earlier outside in a parking lot.
One final note: these indicators of collusion may arouse suspicion, but by themselves they are not proof of collusion. We encourage all procurement officials to report suspicious bids through appropriate channels in your organization and consider submitting a tip (confidential if you wish) on our Bid Rigging Web Tip form. The information you provide could uncover a more widespread problem, and when warranted we may conduct an investigation.