Utah Contractor Practice Exam

Which term refers to businesses collaborating to manipulate the bidding process?

1. Bid rigging

2. Bid shopping

3. Joint venture

4. Subcontracting

The correct answer is: Bid rigging

Bid rigging is a term that specifically describes the illegal practice where businesses conspire to manipulate the bidding process in order to achieve favorable outcomes, often at the expense of competition and fairness. In this scheme, two or more contractors may agree to set prices or designate one of them as the winner, ensuring that they gain the project without genuine competition. This undermines the integrity of the bidding system, leading to inflated costs and reduced quality of work for clients. In contrast, bid shopping involves discussing or revealing a contractor's bid to other contractors to secure a better deal, which can create a competitive environment but does not involve collusion like bid rigging does. Joint ventures refer to a collaborative partnership between businesses to work on a project, typically involving shared resources and responsibilities, while subcontracting means hiring another business to perform specific tasks under the main contract terms. Each of these terms has distinct meanings and implications in the context of contracting but does not carry the same connotation of unethical manipulation as bid rigging.