BID RIGGING Meaning and
Definition
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Bid rigging is a collusive practice in which competitors conspire to manipulate the bidding process for a particular contract, project, or procurement. It involves an illegal agreement among the bidders to determine who will win the bid and at what price, thereby eliminating fair competition. The primary objective of bid rigging is to suppress competition, maximize profits, and ensure that a specific bidder or group of bidders secure the contract, often at an inflated price.
This deceptive practice commonly occurs in industries where contracts, tenders, or projects are awarded through a bidding process, such as construction, public works, government procurement, and supply chain management. Bid rigging typically involves various tactics, including bid suppression, bid rotation, market division, and complementary bidding. These strategies are intended to manipulate the bidding process, mislead the buyer, and ultimately subvert the principles of fair competition that are essential for free market economies.
Bid rigging is deemed illegal in most jurisdictions due to its anti-competitive nature and the negative consequences it has on the economy. It distorts prices, restricts market access for potential competitors, and hampers innovation and efficiency. Governments and regulatory authorities employ various measures to detect and combat bid rigging, including strict procurement guidelines, anonymous tip lines, market surveillance, and severe penalties for offenders.
By actively combating bid rigging and promoting fair and transparent competition, economies can maintain a level playing field, encourage innovation, and ensure that public resources are utilized efficiently.
Etymology of BID RIGGING
The term "bid rigging" is composed of two words: "bid" and "rigging".
1. Bid: The word "bid" originated from the Old English word "biddan" which means "to offer, propose, or command". It also has roots in the Middle English word "bidden" with the same meaning. Over time, the word "bid" evolved to refer specifically to the act of offering or proposing a price in an auction or competitive situation.
2. Rigging: The word "rigging" comes from the noun "rig" which originated from the Old Norse word "hryggja" or "hriggja" meaning "back, ridge". It later developed the meaning of "supporting framework" or "the lines and cords that support and control the sails on a ship".
Similar spelling words for BID RIGGING
