Julius Smith is a purchasing agent for a Louisiana state agency. He has a project budgeted for $24,000 that he would like to hire RGS Consultants to handle. Unfortunately for Julius and RGS Consultants, the state has a requirement that all projects over $10,000 must be sent out for competitive bids. In order to avoid the bidding process, Julius breaks the project into three component projects worth $8,000 each. RGS Consultants is subsequently awarded the contracts for all three projects. What type of bid-rigging scheme is this?

Question

Stevens

Business

1 June, 17:32

Julius Smith is a purchasing agent for a Louisiana state agency. He has a project budgeted for $24,000 that he would like to hire RGS Consultants to handle. Unfortunately for Julius and RGS Consultants, the state has a requirement that all projects over $10,000 must be sent out for competitive bids. In order to avoid the bidding process, Julius breaks the project into three component projects worth $8,000 each. RGS Consultants is subsequently awarded the contracts for all three projects. What type of bid-rigging scheme is this?

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Answers (1)

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Saul Blackwell · Answer 1

Bid splitting

Explanation:

In essence the project is one but, to avoid the legal requirement and process they divide the project into smaller part to avoid other potencial candidates.

This is a bad practice and it is fraud as the parts agree each to represent reaity (a project of 24,000) in a way to avoid the legal treatment (3 smaller project of 8,000)