Oregon Construction Contractors (CCB) Practice Test

What term describes a form of collusion where contractors coordinate their bids to influence the award outcome of a project?

1. Bid rigging

2. Bidding war

3. Subcontracting

4. Price fixing

The correct answer is: Bid rigging

Bid rigging specifically refers to an agreement between contractors to coordinate their bids on a project in order to manipulate which contractor is awarded the contract. This illegal practice can involve various strategies, such as submitting non-competitive bids or rotating winning bids among participants, effectively eliminating true competition from the bidding process. The term highlights the intent to deceive by creating an illusion of a competitive bidding environment, whereas, in reality, the outcome is predetermined among the colluding contractors. This can lead to increased project costs and reduced quality of work, ultimately harming clients and consumers. The other terms mentioned do not accurately capture the specific form of collusion represented by coordinated bid manipulation. Bidding war describes a situation where multiple contractors compete aggressively to win a contract, which is the opposite of collusion. Subcontracting refers to hiring other companies or individuals to perform parts of a project, without implying any collusion among contractors. Price fixing involves setting prices at a certain level, which is closely related but not specific to the bidding process itself as bid rigging is.