Bid Rigging Can be Any Type of Tampering With the Competitive Bidding Process

A recent criminal case in California, stemming from a long running public corruption investigation, highlights many ways fraudulent schemes are used to manipulate bids, circumvent competitive bidding requirements and defraud taxpayers of money.

The United States Attorney’s Office in the Northern District of California charged eight defendants, including contractors, political consultants, and government employees,  with crimes ranging from soliciting and accepting bribes in connection with State of California construction contracts, to participating in a conspiracy to defraud the United States in connection with a Department of Energy (DOE) contract to renovate a building on the campus of the Lawrence Berkeley National Laboratory, and making false statements to federal investigators to cover-up their fraudulent activity. The case is USA v. Worthen et al., case number 3:17-cr-00175. See,

This particular investigation/prosecution was not prompted by a whistleblower, but this post may help potential whistleblowers identify the wide range of collusion bidding schemes that may be used to rip off the government.

Bribery Scheme for Inside Information on the Contracts

The first scheme charged in the indictment involved an employee of the California Department of Veterans Affairs, also known as CalVet.  According to the indictment, a scheme was developed to offer a specific contractor an advantage on two CalVet construction projects in exchange for cash bribes.  On the first construction project, the government employee used his position to circumvent the normal bidding process for the project and award the construction project to his favored company.  On the second construction project, the government employee gave inside information about the contract to his favored company.

Sham or “Complementary” Bidding Schemes

Contractors seeking construction work with federal and state agencies are legally required to obtain work through a competitive bidding process. In the schemes charged in the indictment, groups of contractors agreed to submit, or participate in the submission of, fraudulent and non-competitive (high) bids to perform the contracts. These “sham” or complementary bids were important to deceive the government agencies, CalVet and the DOE, into thinking there was competition for the bids.  These schemes were used to defeat the lawful method for awarding contracts through a fair, honest, and competitive process. According to the indictment, the defendants were motivated by either a financial reward or the promise of sub-contracting work once the favored company won the contract.

The Attempted Cover-Up

As is often the case, when interviewed by federal agents the contractors lied about the fraudulent schemes. This resulted in additional criminal charges, particularly since undercover agents had be working on the matter for quite some time.


These “bid-rigging” schemes cost the taxpayers money. The common theme in all bid rigging schemes is that the government is overcharged by paying rigged prices, and that money goes into the pockets of the individuals and companies that tamper with the competitive bidding process.

If you think you may have information about fraud in government contracts and want to have a no obligation/no cost consultation, please send me an email at

Thanks for reading.

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