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U. S. Department of Transportation U. S. Department of Transportation Office of Inspector General Office of Inspector General BAMS/DSS vs. COLLUSION WHO’S.

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Presentation on theme: "U. S. Department of Transportation U. S. Department of Transportation Office of Inspector General Office of Inspector General BAMS/DSS vs. COLLUSION WHO’S."— Presentation transcript:

1 U. S. Department of Transportation U. S. Department of Transportation Office of Inspector General Office of Inspector General BAMS/DSS vs. COLLUSION WHO’S WINNING? Vermont 2003 TUG Conference Burlington, Vermont September 9, 2003 Senior Special Agent Mark Peters Telephone

2 Typical Contractor Frauds AntitrustAntitrust DBEDBE Product SubstitutionProduct Substitution Labor MischargingLabor Mischarging Materials MischargingMaterials Mischarging Bribery/GratuitiesBribery/Gratuities

3 OIG Investigative Statistics Contract/Grant Fraud Investigations (January 1998 thru December 2002)  Indictments: 237  Convictions: 180  Fines, Recoveries, & Restitution: $96.92 Million

4 Misrepresentation: Competition among three companies for striping contracts in NY and VA $ 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 ANTITRUST—HIGHWAY STRIPING U.S. v. ACCENT STRIPE, INC.

5 577 Pending OIG Cases

6 OIG’s Pending Contract/Grant Fraud Cases

7 OIG INVESTIGATIVE REGIONS National & Regional Contract & Grant Fraud Coordinators REGION 4 Senior Special Agent LaVan Griffith LaVan Griffith National Fraud Coordinator Atlanta, GA Los Angeles San Francisco Seattle Chicago North Dakota Minnesota South Dakota Wyoming Colorado Nebraska Kansas Missouri Iowa Wisconsin Illinois Kentucky Michigan Indiana (Includes Puerto Rico, Virgin Islands ) Ft. Lauderdale Ft. Worth Atlanta Cambridge Alaska Montana Idaho Washington Oregon California Nevada Arizona Utah New Mexico Texas Oklahoma Arkansas Louisiana Florida Georgia Alabama Miss.Miss. Tennessee North Carolina South Carolina Virginia West Virginia Maryland Pennsylvania Delaware New Jersey New York Connecticut Mass. Vermont Maine New York City HEADQUARTERS Senior Special Agent Elise Woods Washington, D.C. Minneapolis Ohio Cincinnati REGION 5 Senior Special Agent Mark Peters 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 Rhode Island

8 What the Experts Say  FHWA encourages state DOT’s to continually improve their bid analysis procedures by using computers to analyze bids and detect bidder collusion  FHWA encourages state DOT’s to continually improve their bid analysis procedures by using computers to analyze bids and detect bidder collusion.

9 What the Experts Say  INFO TECH’s BAMS/DSS supports computerized detection of “collusion red lights”: Stable market sharesStable market shares Predictable win patternsPredictable win patterns Territorial allocation of contractsTerritorial allocation of contracts Rotation of marketsRotation of markets Prices above competitive levelsPrices above competitive levels

10 Bottom-line Questions ? ? ? ? ? ? ? ? ?  Who’s winning the war against bidder collusion?  What is the score?  What does collusion look like?

11 State DOT Questionnaire  In the past 5 years, how often has your state DOT’s 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

12 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

13 Summary Similes  Bid collusion is like the Loch Ness monster.  Collusion detection is like hunting mushrooms.

14 U. S. Department of Transportation U. S. Department of Transportation Office of Inspector General Office of Inspector General BAMS/DSS vs. COLLUSION WHO’S WINNING? Vermont 2003 TUG Conference Burlington, Vermont September 9, 2003 Senior Special Agent Mark Peters Telephone


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