Did you know that if you bid on a contract and share details with other bidders, you may be guilty of the crime known as bid-rigging? Bid-rigging is when you and other bidders agree not to submit bids in response to an invitation to tender or agree to submit bids at prearranged amounts.
Bid-rigging eliminates competition among suppliers. Regardless of whether the contract is for the government or a private project, the consumers and taxpaying public end up paying the costs. A criminal offense under Section 47 of the Competition Act, bid-rigging is punishable by a fine decided by the court, for which there’s no maximum amount, and up to 14 years in prison.
To find you guilty of bid-rigging, prosecutors must prove four things:
- There was a bid tender.
- Two or more parties agreed to withdraw bids, to not submit bids, or to submit bids for a prearranged amount.
- The bids were submitted.
- The person who called for tenders wasn’t advised of the agreement when or before the bids were submitted.
Since bid-rigging is a criminal offence, these criteria must be proven beyond a reasonable doubt. Also, the legal definition of "agreement" —that is, a meeting of the minds and not just mere discussions — may be used to require a higher standard of cooperation for convicting offenders.
You can avoid conviction for a bid-rigging scheme by reporting it to the party offering the tender. It makes no difference whether that person should or could have known about the bid-rigging scheme. If you fail to notify the person calling for bids or the Competition Bureau Canada of a bid-rigging agreement before bids get submitted, you’re guilty under the law so long as the other conditions exist.