What are two forms of collusion in the bidding process?

What are two forms of collusion in the bidding process?

• A. Price Skimming and Bid Rigging
• B. Price Fixing and Bid Rigging
• C. Market Division and Bid Manipulation
• D. Joint Ventures and Price Fixing

Answer: (B)

Bid rigging and price fixing are indeed two significant forms of collusion in the bidding process. Bid rigging involves competitors coordinating their bids to secure a predetermined outcome, undermining the competitive process. This could happen when bidders agree beforehand on who will win a contract, thus inflating the prices and limiting the opportunity for fair competition. Price fixing, on the other hand, occurs when competing vendors agree to set prices at a certain level rather than allowing market forces to determine them. This manipulation of prices can lead to increased costs for consumers and less incentive for companies to compete effectively. Both bid rigging and price fixing are illegal activities that compromise the integrity of the bidding process and limit the benefits that should arise from competition, making the correct answer particularly relevant in understanding illegal collusion in procurement.

Bid rigging and price fixing are indeed two significant forms of collusion in the bidding process.

Bid rigging involves competitors coordinating their bids to secure a predetermined outcome, undermining the competitive process. This could happen when bidders agree beforehand on who will win a contract, thus inflating the prices and limiting the opportunity for fair competition.

Price fixing, on the other hand, occurs when competing vendors agree to set prices at a certain level rather than allowing market forces to determine them. This manipulation of prices can lead to increased costs for consumers and less incentive for companies to compete effectively.

Both bid rigging and price fixing are illegal activities that compromise the integrity of the bidding process and limit the benefits that should arise from competition, making the correct answer particularly relevant in understanding illegal collusion in procurement.