From: Sonny Heath (sonny@defuniak.com)
Date: Sun Nov 21 2004 - 07:32:44 PST
I don't know about the rest of the list but I've learned much more about
this thread than I want. What more can be accomplished?
Sonny
----- Original Message -----
From: "JEFF HAIN-MATSON" <flmv@flmv.net>
To: "Military Vehicles Mailing List" <mil-veh@mil-veh.org>
Sent: Sunday, November 21, 2004 9:13 AM
Subject: Re: [MV] OT more on collusive bidding (long)
> food for thought:
>
> USAM Title 7
> June 3, 1998
> This Title has been reviewed by the Antitrust Division. Questions about
> these materials should be directed to Howard M. Blumenthal, Assistant
Chief,
> Legal Policy Section, at (202) 514-2513, JMD15(BLUMENTH).
>
> Antitrust Resource Manual 1
> Attorney General's Policy Statement
> "The effectiveness of antitrust enforcement can be substantially enhanced
by
> utilizing the offices of the U.S. Attorneys to supplement the enforcement
> efforts of the Antitrust Division.
>
> "Experience indicates that in those areas where the Antitrust Division has
> field offices, the public becomes more antitrust-conscious and
consequently
> calls to our attention possible violations to a greater degree than in
other
> areas. Since the Division maintains only seven field offices, it is a
fair
> assumption that many local price-fixing violations never come to our
> attention.
>
> "Furthermore, the Antitrust Division does not have the resources to
> investigate and prosecute all local antitrust violations, and at the same
> time adequately pursue the other indispensable elements of its enforcement
> program.
>
> "In short, I am convinced that the effective and efficient enforcement of
the
> antitrust laws requires the detection and prosecution of local
price-fixing
> violations in every geographical section of the country. The efforts of
the
> Antitrust Division must be supplemented if this goal is to be achieved.
> Accordingly, I am assigning to the U.S. Attorneys, effective immediately,
the
> additional responsibility for enforcing Section 1 of the Sherman Act
against
> offenses which are essentially of local character, and which involve price
> fixing, collusive bidding, or similar conduct. The U.S. Attorneys shall
> handle such investigations and proceedings as the Assistant Attorney
General
> in charge of the Antitrust Division may specifically authorize them to
> conduct. To this end, each of you is being provided with this Manual
which
> sets forth the procedures to be followed in such matters.
>
> B. The alleged illegal practice (the specific practice should be outlined,
if
> practicable, e.g., price fixing, bid rigging, monopolization, etc., and
not
> merely described as "restraint of trade");
>
> C. The relevant statute (usually Section 1 of the Sherman Act, 15 U.S.C.
Sec.
> 1);
>
> D. The names and locations of companies and individuals involved to the
> extent known;
>
> The most frequent violations of the Sherman Act are price fixing and bid
> rigging, both of which are usually prosecuted as criminal violations.
Refer
> to USAM 7-4.100|0402 for maximum penalties upon conviction.
>
> Conspiracy or Agreement: The conspiracy or agreement to fix prices or to
rig
> bids is the key element of a Sherman Act criminal case. In effect, the
> conspiracy must comprise an agreement, understanding or meeting of the
minds
> between at least two competitors or potential competitors, for the purpose
or
> with the effect of unreasonably restraining trade. The agreement itself
is
> what constitutes the offense; overt acts in furtherance of the conspiracy
are
> not essential elements of the offense and need not be pleaded or proven in
a
> Sherman Act case.
>
> Unreasonable Restraint of Trade: Price fixing and bid rigging are among
the
> group of antitrust offenses that are considered per se unreasonable
> restraints of trade.
>
> Identifying Bid-Rigging Activities: Bid rigging generally involves an
> agreement or arrangement among companies to determine the successful
bidder
> in advance of a bid letting at a price set by the successful bidder. The
> agreed-upon winning bidder customarily advises the other potential bidders
of
> a bid amount they must exceed (usually the amount of the winning bid or a
> certain amount above that bid). The higher bids submitted by the other
> bidders are generally known as complementary bids. (In the case of offers
to
> buy, the complementary bids will generally be lower than the winning bid.)
> Also, some potential bidders may agree to refrain from bidding on a
> particular project. In most bid-rigging situations, the conspirators
> endeavor to submit three or more bids on the project to create the
appearance
> that competitive bidding has occurred.
>
> Here is New Hampshire's take on it:
>
> HB 1244-FN, relative to collusive bidding at auctions. OUGHT TO PASS
>
> Rep. Merton S. Dyer for Executive Departments and Administration: This
bill
> more accurately defines the practice of collusive bidding at auctions and
> makes it a class A misdemeanor for a person found guilty of collusive
bidding
> or a felony if other than a natural person. Vote 18-0.
>
> And from the state fo Maine:
>
> CERTIFICATION REGARDING NONCOLLUSION Under penalty of perjury as provided
by
> federal law (28 U.S.C. §1746), the Bidder hereby certifies, to the best of
> its knowledge and
> belief, that:
> the Bidder has not, either directly or indirectly, entered into any
> agreement,
> participated in any collusion, or otherwise taken any action in restraint
of
> competitive bidding in connection with the Contract.
> For a related provisions, see Section 102.7.2 (C) of the Standard
> Specifications - "Effects of
> Signing and Delivery of Bids" - "Certifications", Section 3 of this
Appendix
> A entitled "Other
> Federal Requirements" including section XI - "Certification Regarding
> Debarment, Suspension,
> Ineligibility, and Voluntary Exclusion" and section XII. - "Certification
> Regarding Use of
> Contract Funds for Lobbying."
>
****************************************************************************
**
>
> B. Bid Rigging Hotline To report bid rigging activities call:
1-800-424-9071
> The U.S. Department of Transportation (DOT) operates the above toll-free
> "hotline" Monday
> through Friday, 8:00 a.m. to 5:00 p.m., eastern time. Anyone with
knowledge
> of possible bid
> rigging, bidder collusion, or other fraudulent activities should use the
> "hotline" to report such
> activities.
>
>
>
>
> Steve Grammont wrote:
>
> > Hi Dan,
> >
> > > thought that you said that you and eleven other people decide which
> > >one of your group will bid. That group comes to mind. If each single
> > >bid represents 12 people that have informal or formal agreements, that
> > >means that instead of 144 people going at it, there are only 12. How
is
> > >that in the seller's best interest, again? :-)
> >
> > Ah... but out of that 12 perhaps only one would be interested in the
> > given item (or none or more). The issue is that hundreds of non-
> > associated likely bidders, out of millions of possible bidders, can come
> > in at any time and place a bid. That changes the whole equation and
> > eliminates the possible downside of collusion to the seller.
> >
> > Even if there are tons of informal groups within a speciality, which I
> > doubt, remember that it only takes two competitive bidders to drive up
> > the bidding. No need for the other 10. The most expensive item I ever
> > bought was between me and another guy (whom I know, but don't have an
> > agreement with). The start price was $1, the final price was nearly
> > $800. We were the ONLY two who bid on the thing in 7 days. I think
> > everybody else smelled the blood and kept far, far away from us :-) The
> > seller made out handsomely since arguably it was only worth $400.
> >
> > >You mention a case where it might help and I don't disagree that it
> > >could happen. I would consider that, at best, a unique circumstance,
as
> > >there are a load of assumptions in that scenario.
> >
> > That was a real life example :-) I have tons of other ones like that
> > too. Happens quite frequently.
> >
> > >Truth is that, as buyers, we are in it for the best circumstance for
> > >ourselves (no collusion) or our group (collusion), shortterm or
> > >longterm. It ain't charity - I would think that we could agree on
that.
> >
> > Yup. But as a frequent seller I use the simple "what is good for the
> > goose is good for the gander" test. As a seller do I mind people doing
> > this sort of collusion? Nope, not at all. I've even told friends to
not
> > bid on items I have for sale because I have another one. The high
bidder
> > *and* my friend potentially benefit at the same time. I'm the only one
> > that potentially suffers.
> >
> > >Fun topic.
> >
> > Quite interesting! Ryan's follow up comments are a good read too.
> >
> > >Oh... I was in Maine for the first time the day before
> > >yesterday. Beautiful!
> >
> > Sure is :-) Thanks for saying so.
> >
> > Steve
> >
> > ===Mil-Veh is a member-supported mailing list===
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> > To switch to the DIGEST mode, send e-mail to
<mil-veh-digest@mil-veh.org>
> > To reach a human, contact <ack@mil-veh.org>
>
> --
> JEFF HAIN-MATSON
> FRONT LINE MILITARY VEHICLES WEB SITE: http://www.flmv.net/
> WRIGHTSVILLE PA
> 717-252-4489 VOICE
> 717-252-4499 FAX
> flmv@flmv.net E-MAIL
> MVPA #1833
> IMPS #1726
> MVT #9362
>
>
>
> ===Mil-Veh is a member-supported mailing list===
> To unsubscribe, send e-mail to: <mil-veh-off@mil-veh.org>
> To switch to the DIGEST mode, send e-mail to <mil-veh-digest@mil-veh.org>
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