In this video, we explain what is Bid-Rigging, its types, examples, how to identify and prevent Bid-Rigging.
What is Bid-Rigging?
It is an Illegal process where all the bidders form a group to fix the Bid winner. It affects healthy competition and manipulates the bid price. In most cases, it is illegal and is not entertained during the bidding process and auctions.
Types of bid-rigging
– Cover bidding
– Bid suppression
– Phantom bidding
– Non-conforming Bid
– Subcontracting
How to identify Bid-Rigging?
– Value of Bid rises above the estimated cost or the market rate.
– Multiple bids are received from numerous companies in a lump-sum format.
– Bidding documents containing similar corrections.
– A proposal offered by various competitors has identical errors.
How to prevent bid-rigging?
– Creating a diverse bidding pool.
– Increase the number of participants.
– Avoid splitting contracts among multiple bidders.
– Provoking the bidder with questions if the Bid deviates.
– Maximize the participation of bidders.
– Maintain confidentiality and equality.
Read more about it in: https://www.wallstreetmojo.com/bid-rigging/
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