A process by which several bidders conspire to split contracts up and ensure that each gets a certain amount of work is called:
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A. B. C. D.C
The correct answer is C. Bid pooling.
Bid pooling, also known as collusive bidding, is a fraudulent practice where two or more bidders agree to cooperate with each other to rig the competitive bidding process in their favor. In this scheme, the bidders agree to submit bids that are higher than the actual cost of the work or goods being provided, thus inflating the overall cost of the contract. They then divide the work among themselves according to the pre-arranged agreement. This collusion results in higher costs for the purchaser or client and deprives legitimate competitors of the opportunity to win the contract.
Bid pooling is usually conducted by bidders who are familiar with each other and who have a common interest in winning the contract. They may have worked together on previous contracts or have personal or business relationships that facilitate collusion. In some cases, they may even form a shell company or use fictitious names to conceal their identities and avoid detection.
Bid pooling is illegal and is considered a violation of antitrust laws. It is also a breach of the ethical standards and codes of conduct of many professional organizations, including the ACFE. The ACFE recommends that fraud examiners be alert to signs of collusion during the bidding process, such as unusually high or identical bid prices, late or incomplete bids, and evidence of communication between bidders outside of the bidding process.