Overview
FAR 3.303 establishes the mandatory requirement for government agencies to identify and report suspected collusive bidding practices and antitrust violations to the Department of Justice (DOJ). It outlines specific "red flag" behaviors—such as bid rotation and market division—that warrant formal notification to ensure federal procurement remains competitive.
Key Rules
- Statutory Mandate: Agencies are required by 41 U.S.C. 3707 and 10 U.S.C. 3307 to report bids or proposals that evidence antitrust violations to the Attorney General.
- Identifiable Red Flags: The regulation identifies specific suspicious patterns, including:
- Industry price lists or collusive price-estimating systems.
- Sudden shifts from competitive to identical bidding or simultaneous price increases.
- Bid Rotation: Competitors taking turns being the low bidder or partitioning the market by agency, geography, or product type.
- Joint Bidding: Filing a joint bid when at least one firm has the independent capability to perform the contract.
- Clerical Anomalies: Identical calculation or spelling errors across offers from different firms.
- Reporting Threshold: Identical bids must be reported if there is a reasonable belief they resulted from collusion; questionable activities do not require absolute proof of impropriety to warrant a report.
- Submission Process: Reports must be sent to the DOJ Antitrust Division and include a description of the suspected practice and an agency contact person.
Practical Implications
- Contracting officers must serve as the first line of defense against market manipulation, requiring them to look beyond price and analyze bidding patterns across multiple procurement cycles.
- The existence of these rules serves as a deterrent to contractors, as administrative reporting to the DOJ can lead to criminal investigations, civil penalties, and potential debarment or suspension.