U' S' Department of Transportation

1
Senior Special Agent Mark Peters Telephone
312-353-0106 Mark.E.Peters_at_OIG.DOT.GOV
U. S. Department of Transportation
Office of Inspector General BAMS/DSS vs.
COLLUSION WHOS WINNING?
Vermont 2003 TUG Conference Burlington,
Vermont September 9, 2003
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Typical Contractor Frauds

• Antitrust
• DBE
• Product Substitution
• Labor Mischarging
• Materials Mischarging
• Bribery/Gratuities

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OIG Investigative Statistics Contract/Grant Fraud
Investigations

• (January 1998 thru December 2002)
• Indictments 237
• Convictions 180
• Fines, Recoveries, Restitution 96.92 Million

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ANTITRUSTHIGHWAY STRIPING U.S. v.
ACCENT STRIPE, INC.

• Competition among three companies for striping
  contracts in NY and VA

Misrepresentation

• Value
• Inflated bids on contracts for reflective
  pavement markings and stripes on highways in NY
  and VA due to advance agreement not to compete

• Felonies
• Sherman Antitrust Act
• 1.2M fine and restitution
• Debarment

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577 Pending OIG Cases

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OIGs Pending Contract/Grant Fraud Cases
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OIG INVESTIGATIVE REGIONS National Regional
Contract Grant Fraud Coordinators
REGION 5 Senior Special Agent Mark
Peters Chicago, IL
REGION 2 Senior Special Agent Craig Furey New
York City, NY
REGION 9 Senior Special Agent Tim Parker San
Francisco, CA
Maine
Vermont
New York City
Seattle
Washington
Cambridge
Montana
New York
Mass.
Minneapolis
37
42
Rhode Island
Pennsylvania
Connecticut
Oregon
New Jersey
Idaho
Delaware
Ohio
42
Cincinnati
Nevada
San Francisco
Utah
Maryland
West Virginia
17
California
Virginia
North Carolina
Los Angeles
Tennessee
Arizona
Oklahoma
Arkansas
HEADQUARTERS Senior Special Agent Elise
Woods Washington, D.C.
New Mexico
M i s s .
South Carolina
Atlanta
37
Alabama
REGION 4 Senior Special Agent LaVan
Griffith National Fraud Coordinator Atlanta, GA
Ft. Worth
Georgia
Texas
Alaska
Louisiana

Florida
(Includes Puerto Rico, Virgin Islands)
Ft. Lauderdale
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What the Experts Say

• FHWA encourages state DOTs to continually
  improve their bid analysis procedures by using
  computers to analyze bids and detect bidder
  collusion.

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What the Experts Say

• INFO TECHs BAMS/DSS supports computerized
  detection of collusion red lights
• Stable market shares
• Predictable win patterns
• Territorial allocation of contracts
• Rotation of markets
• Prices above competitive levels

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Bottom-line Questions

• ? ? ? ? ? ? ? ? ?
• Whos winning the war against bidder collusion?
• What is the score?
• What does collusion look like?

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State DOT Questionnaire

• In the past 5 years, how often has your state
  DOTs computerized bid analysis system identified
  possible bid collusion?
• never
• 1 or 2 times
• more than 2 times but less than 10 times
• more than 10 times but less than 25 times
• over 25 times
• uncertain

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State DOT Questionnaire

• When collusion was detected, what steps did state
  DOT representatives take?
• no action but further monitoring
• bids rejected and contract re-let
• contractors interviewed / supplier
  information collected
• referral to state DOT legal counsel
• referral to criminal law enforcement
• uncertain

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Summary Similes

• Bid collusion is like the Loch Ness monster.
• Collusion detection is like hunting mushrooms.

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Senior Special Agent Mark Peters Telephone
312-353-0106 Mark.E.Peters_at_OIG.DOT.GOV
U. S. Department of Transportation
Office of Inspector General BAMS/DSS vs.
COLLUSION WHOS WINNING?
Vermont 2003 TUG Conference Burlington,
Vermont September 9, 2003