Bid rigging (Competition Act, s. 47)

Bid rigging is an agreement between two or more bidders about the bids they will — or will not — submit to a call for bids: who wins, at what price, or who stays out. Under section 47 of the Competition Act it is a criminal offence, and in public procurement it converts a competitive tender into a negotiated price paid by the buyer.

What it is

Section 47 of the Competition Act makes it an offence for persons to agree that they will submit, or refrain from submitting, bids in response to a call for bids, or that bids submitted will be of an amount or under terms agreed among the bidders — where the caller for bids is not made aware of that agreement at or before the time the bids are submitted. The Competition Bureau's Competitor Collaboration Guidelines note that agreements limited to bid-rigging are generally assessed under section 47 (or the civil agreements provision, section 90.1), rather than the general conspiracy provision, section 45.

Why it matters in public procurement

The Bureau treats competitive bidding in public procurement as essential to value for taxpayers' money and maintains a Procurement Hub on how competition law applies to procurement, plus a Collusion Risk Assessment Tool for buyers planning a call for bids. Enforcement is active: the Bureau reports that since 2019 six engineering firms have paid more than $12 million for bid-rigging schemes targeting municipal infrastructure contracts in Quebec, and criminal charges have been laid in Ontario construction cases. Buyers can also report suspected fraud, collusion or corruption in Government of Canada contracting through the Federal Contracting Fraud Tip Line, run with Public Services and Procurement Canada and the RCMP.

What it means for vendors

Coordinated bidding — cover bids, bid withdrawal on cue, rotating winners, or discussing your tender with a competitor — is not a negotiation tactic; it is criminal exposure for the individuals involved as well as the firm. It also matters commercially: collusive tenders are an enumerated circumstance in which buyers may use limited tendering to restart a procurement under the CFTA. Legitimate teaming must be disclosed — an agreement among bidders made known to the caller at or before submission is treated differently from a hidden one, though it may still be reviewed for its effect on competition.

Common questions

Is joint bidding or a consortium bid rigging?

Not by itself. The Bureau recognizes bidders may form consortia to bid effectively, even where disclosed to the buyer — but a consortium can still be reviewed where it lessens competition substantially, and hidden coordination among purportedly separate bidders is rigging.

What are the classic red flags?

The Bureau's procurement guidance points to patterns such as identical bids from supposed competitors, regular losers who keep bidding without winning, unusual bid withdrawals, and the same firms trading wins across a series of tenders.

Related definitions

Responsive bid · Bid solicitation · Supplier suspension and debarment · Limited tendering