2018-04-26 10:55:52Business LawEnglishLearn about bid-rigging when it comes to contracts, the elements that must be present for a bid-rigging conviction, and how the crime...https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2018/04/Bid-Rigging-Expert-Explaining-Concept.jpghttps://quickbooks.intuit.com/ca/resources/business-law/bid-rigging-explanation/What is Bid-Rigging?

What is Bid-Rigging?

1 min read

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:

  1. There was a bid tender.
  2. Two or more parties agreed to withdraw bids, to not submit bids, or to submit bids for a prearranged amount.
  3. The bids were submitted.
  4. 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.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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