Bid Suppression

A form of collusion in which a relatively stable set of bidders for contracts which are routinely tendered agree between themselves which contracts each participant will bid for and, more importantly, which contracts they will decline to bid for. For example, a buyer may issue tenders to three bidders, only to find that bidders B and C decline to tender. On a subsequent cycle, bidders A and C will decline to tender, and so on. This is a relatively conspicuous form of collusion and it is more likely that bidders A and C would submit a bid, but on such poor terms that only bidder B’s offer would be acceptable to the buyer. See also Collusion.