Carolina Cleaners
- Thread starter Carolina Prowash
- Start date
jlpressure
JL Pressure Washing
I cant say, I dont want to get busted LOL. Sorry I just got off track on one of my many stories
Back to the regularly scheduled program
pressurepros
New member
Jeff, we have to work on your signature lines.. gimme a ring or come join my forum. In the meantime change your second signature line to "Pressure Washing Myrtle Beach". Eliminate the other two links for now as they are robbing your website of "link juice". Do that on each forum and let me know what happens to your web page ranking in two-three weeks for that search phrase. Right now you are on the second page I believe.
David Saulque
Senior Moderator
The only reason that I brought this up was to make you aware that small companies in groups tend to try to establish price as an anchor point for the group.
Carolina Prowash
Exterior Surface Pros
Thank you
Celeste
Celeste
Doug Dahlke
New member
Great idea Celeste. The plan you have set up looks great. Makes me wish I was in the Carolinas.
David Saulque
Senior Moderator
You are welcome, anytime.
Grant
Administrator
I think what Dave said is very true and needs to be considered.
Here is something from the Department of Justice on this subject.
Price Fixing, Bid Rigging, and Market Allocation Schemes:
What They Are and What to Look For
An Antitrust Primer
This primer briefly describes the most common antitrust violations and outlines those conditions and events that indicate anticompetitive collusion.
Introduction
American consumers have the right to expect the benefits of free and open competition — the best goods and services at the lowest prices. Public and private organizations often rely on a competitive bidding process to achieve that end. The competitive process only works, however, when competitors set prices honestly and independently. When competitors collude, prices are inflated and the customer is cheated. Price fixing, bid rigging, and other forms of collusion are illegal and are subject to criminal prosecution by the Antitrust Division of the United States Department of Justice.
In recent years, the Antitrust Division has successfully prosecuted regional, national, and international conspiracies affecting construction, agricultural products, manufacturing, service industries, consumer products, and many other sectors of our economy. Many of these prosecutions resulted from information uncovered by members of the general public who reported the information to the Antitrust Division. Working together, we can continue the effort to protect and promote free and open competition in the marketplaces of America.
This primer contains an overview of the federal antitrust laws and the penalties that may be imposed for their violation. It briefly describes the most common antitrust violations and outlines those conditions and events that indicate anticompetitive collusion so that you might better identify and report suspicious activity.
Federal Antitrust Enforcement
Enacted in 1890, the Sherman Act is among our country's most important and enduring pieces of economic legislation. The Sherman Act prohibits any agreement among competitors to fix prices, rig bids, or engage in other anticompetitive activity. Criminal prosecution of Sherman Act violations is the responsibility of the Antitrust Division of the United States Department of Justice.
Violation of the Sherman Act is a felony punishable by a fine of up to $10 million for corporations, and a fine of up to $350,000 or 3 years imprisonment (or both) for individuals. In addition, collusion among competitors may constitute violations of the mail or wire fraud statute, the false statements statute, or other federal felony statutes, all of which the Antitrust Division prosecutes.
In addition to receiving a criminal sentence, a corporation or individual convicted of a Sherman Act violation may be ordered to make restitution to the victims for all overcharges. Victims of bid-rigging and price-fixing conspiracies also may seek civil recovery of up to three times the amount of damages suffered.
Forms of Collusion
Most criminal antitrust prosecutions involve price fixing, bid rigging, or market division or allocation schemes. Each of these forms of collusion may be prosecuted criminally if they occurred, at least in part, within the past five years. Proving such a crime does not require us to show that the conspirators entered into a formal written or express agreement. Price fixing, bid rigging, and other collusive agreements can be established either by direct evidence, such as the testimony of a participant, or by circumstantial evidence, such as suspicious bid patterns, travel and expense reports, telephone records, and business diary entries.
Under the law, price-fixing and bid-rigging schemes are per se violations of the Sherman Act. This means that where such a collusive scheme has been established, it cannot be justified under the law by arguments or evidence that, for example, the agreed-upon prices were reasonable, the agreement was necessary to prevent or eliminate price cutting or ruinous competition, or the conspirators were merely trying to make sure that each got a fair share of the market.
Price Fixing
Price fixing is an agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold. It is not necessary that the competitors agree to charge exactly the same price, or that every competitor in a given industry join the conspiracy. Price fixing can take many forms, and any agreement that restricts price competition violates the law. Other examples of price-fixing agreements include those to:
Establish or adhere to price discounts.
Hold prices firm.
Eliminate or reduce discounts.
Adopt a standard formula for computing prices.
Maintain certain price differentials between different types, sizes, or quantities of products.
Adhere to a minimum fee or price schedule.
Fix credit terms.
Not advertise prices.
In many cases, participants in a price-fixing conspiracy also establish some type of policing mechanism to make sure that everyone adheres to the agreement.
Bid Rigging
Bid rigging is the way that conspiring competitors effectively raise prices where purchasers — often federal, state, or local governments — acquire goods or services by soliciting competing bids.
Essentially, competitors agree in advance who will submit the winning bid on a contract being let through the competitive bidding process. As with price fixing, it is not necessary that all bidders participate in the conspiracy.
Bid rigging also takes many forms, but bid-rigging conspiracies usually fall into one or more of the following categories:
Bid Suppression: In bid suppression schemes, one or more competitors who otherwise would be expected to bid, or who have previously bid, agree to refrain from bidding or withdraw a previously submitted bid so that the designated winning competitor's bid will be accepted.
Complementary Bidding: Complementary bidding (also known as "cover" or "courtesy" bidding) occurs when some competitors agree to submit bids that either are too high to be accepted or contain special terms that will not be acceptable to the buyer. Such bids are not intended to secure the buyer's acceptance, but are merely designed to give the appearance of genuine competitive bidding. Complementary bidding schemes are the most frequently occurring forms of bid rigging, and they defraud purchasers by creating the appearance of competition to conceal secretly inflated prices.
Bid Rotation: In bid rotation schemes, all conspirators submit bids but take turns being the low bidder. The terms of the rotation may vary; for example, competitors may take turns on contracts according to the size of the contract, allocating equal amounts to each conspirator or allocating volumes that correspond to the size of each conspirator company. A strict bid rotation pattern defies the law of chance and suggests collusion is taking place.
Subcontracting: Subcontracting arrangements are often part of a bid-rigging scheme. Competitors who agree not to bid or to submit a losing bid frequently receive subcontracts or supply contracts in exchange from the successful low bidder. In some schemes, a low bidder will agree to withdraw its bid in favor of the next low bidder in exchange for a lucrative subcontract that divides the illegally obtained higher price between them.
Almost all forms of bid-rigging schemes have one thing in common: an agreement among some or all of the bidders which predetermines the winning bidder and limits or eliminates competition among the conspiring vendors.
Market Division
Market division or allocation schemes are agreements in which competitors divide markets among themselves. In such schemes, competing firms allocate specific customers or types of customers, products, or territories among themselves. For example, one competitor will be allowed to sell to, or bid on contracts let by, certain customers or types of customers. In return, he or she will not sell to, or bid on contracts let by, customers allocated to the other competitors. In other schemes, competitors agree to sell only to customers in certain geographic areas and refuse to sell to, or quote intentionally high prices to, customers in geographic areas allocated to conspirator companies.
Detecting Bid Rigging, Price Fixing, And Other Types Of Collusion
Bid rigging, price fixing, and other collusion can be very difficult to detect. Collusive agreements are usually reached in secret, with only the participants having knowledge of the scheme. However, suspicions may be aroused by unusual bidding or pricing patterns or something a vendor says or does.
Bid or Price Patterns
Certain patterns of bidding or pricing conduct seem at odds with a competitive market and suggest the possibility of collusion:
Bids
The same company always wins a particular procurement. This may be more suspicious if one or more companies continually submit unsuccessful bids.
The same suppliers submit bids and each company seems to take a turn being the successful bidder.
Some bids are much higher than published price lists, previous bids by the same firms, or engineering cost estimates.
Fewer than the normal number of competitors submit bids.
A company appears to be bidding substantially higher on some bids than on other bids, with no apparent cost differences to account for the disparity.
Bid prices drop whenever a new or infrequent bidder submits a bid.
A successful bidder subcontracts work to competitors that submitted unsuccessful bids on the same project.
A company withdraws its successful bid and subsequently is subcontracted work by the new winning contractor.
Prices
Identical prices may indicate a price-fixing conspiracy, especially when:
Prices stay identical for long periods of time.
Prices previously were different.
Price increases do not appear to be supported by increased costs.
Discounts are eliminated, especially in a market where discounts historically were given.
Vendors are charging higher prices to local customers than to distant customers. This may indicate local prices are fixed.
Suspicious Statements or Behavior
While vendors who collude try to keep their arrangements secret, occasional slips or carelessness may be a tip-off to collusion. In addition, certain patterns of conduct or statements by bidders or their employees suggest the possibility of collusion. Be alert for the following situations, each of which has triggered a successful criminal antitrust prosecution:
The proposals or bid forms submitted by different vendors contain irregularities (such as identical calculations or spelling errors) or similar handwriting, typeface, or stationery. This may indicate that the designated low bidder may have prepared some or all of the losing vendor's bid.
Bid or price documents contain white-outs or other physical alterations indicating last-minute price changes.
A company requests a bid package for itself and a competitor or submits both its and another's bids.
A company submits a bid when it is incapable of successfully performing the contract (likely a complementary bid).
A company brings multiple bids to a bid opening and submits its bid only after determining (or trying to determine) who else is bidding.
A bidder or salesperson makes:
Any reference to industry-wide or association price schedules.
Any statement indicating advance (non-public) knowledge of competitors' pricing.
Statements to the effect that a particular customer or contract "belongs" to a certain vendor.
Statements that a bid was a "courtesy," "complementary," "token," or "cover" bid.
Any statement indicating that vendors have discussed prices among themselves or have reached an understanding about prices.
A Caution About Indicators of Collusion
While these indicators may arouse suspicion of collusion, they are not proof of collusion. For example, bids that come in well above the estimate may indicate collusion or simply an incorrect estimate. Also, a bidder can lawfully submit an intentionally high bid that it does not think will be successful for its own independent business reasons, such as being too busy to handle the work but wanting to stay on the bidders' list. Only when a company submits an intentionally high bid because of an agreement with a competitor does an antitrust violation exist. Thus, indicators of collusion merely call for further investigation to determine whether collusion exists or whether there is an innocent explanation for the events in question.
Conditions Favorable To Collusion
While collusion can occur in almost any industry, it is more likely to occur in some industries than in others. An indicator of collusion may be more meaningful when industry conditions are already favorable to collusion.
Collusion is more likely to occur if there are few sellers. The fewer the number of sellers, the easier it is for them to get together and agree on prices, bids, customers, or territories. Collusion may also occur when the number of firms is fairly large, but there is a small group of major sellers and the rest are "fringe" sellers who control only a small fraction of the market.
The probability of collusion increases if other products cannot easily be substituted for the product in question or if there are restrictive specifications for the product being procured.
The more standardized a product is, the easier it is for competing firms to reach agreement on a common price structure. It is much harder to agree on other forms of competition, such as design, features, quality, or service.
Repetitive purchases may increase the chance of collusion, as the vendors may become familiar with other bidders and future contracts provide the opportunity for competitors to share the work.
Collusion is more likely if the competitors know each other well through social connections, trade associations, legitimate business contacts, or shifting employment from one company to another.
Bidders who congregate in the same building or town to submit their bids have an easy opportunity for last-minute communications.
Here is something from the Department of Justice on this subject.
Price Fixing, Bid Rigging, and Market Allocation Schemes:
What They Are and What to Look For
An Antitrust Primer
This primer briefly describes the most common antitrust violations and outlines those conditions and events that indicate anticompetitive collusion.
Introduction
American consumers have the right to expect the benefits of free and open competition — the best goods and services at the lowest prices. Public and private organizations often rely on a competitive bidding process to achieve that end. The competitive process only works, however, when competitors set prices honestly and independently. When competitors collude, prices are inflated and the customer is cheated. Price fixing, bid rigging, and other forms of collusion are illegal and are subject to criminal prosecution by the Antitrust Division of the United States Department of Justice.
In recent years, the Antitrust Division has successfully prosecuted regional, national, and international conspiracies affecting construction, agricultural products, manufacturing, service industries, consumer products, and many other sectors of our economy. Many of these prosecutions resulted from information uncovered by members of the general public who reported the information to the Antitrust Division. Working together, we can continue the effort to protect and promote free and open competition in the marketplaces of America.
This primer contains an overview of the federal antitrust laws and the penalties that may be imposed for their violation. It briefly describes the most common antitrust violations and outlines those conditions and events that indicate anticompetitive collusion so that you might better identify and report suspicious activity.
Federal Antitrust Enforcement
Enacted in 1890, the Sherman Act is among our country's most important and enduring pieces of economic legislation. The Sherman Act prohibits any agreement among competitors to fix prices, rig bids, or engage in other anticompetitive activity. Criminal prosecution of Sherman Act violations is the responsibility of the Antitrust Division of the United States Department of Justice.
Violation of the Sherman Act is a felony punishable by a fine of up to $10 million for corporations, and a fine of up to $350,000 or 3 years imprisonment (or both) for individuals. In addition, collusion among competitors may constitute violations of the mail or wire fraud statute, the false statements statute, or other federal felony statutes, all of which the Antitrust Division prosecutes.
In addition to receiving a criminal sentence, a corporation or individual convicted of a Sherman Act violation may be ordered to make restitution to the victims for all overcharges. Victims of bid-rigging and price-fixing conspiracies also may seek civil recovery of up to three times the amount of damages suffered.
Forms of Collusion
Most criminal antitrust prosecutions involve price fixing, bid rigging, or market division or allocation schemes. Each of these forms of collusion may be prosecuted criminally if they occurred, at least in part, within the past five years. Proving such a crime does not require us to show that the conspirators entered into a formal written or express agreement. Price fixing, bid rigging, and other collusive agreements can be established either by direct evidence, such as the testimony of a participant, or by circumstantial evidence, such as suspicious bid patterns, travel and expense reports, telephone records, and business diary entries.
Under the law, price-fixing and bid-rigging schemes are per se violations of the Sherman Act. This means that where such a collusive scheme has been established, it cannot be justified under the law by arguments or evidence that, for example, the agreed-upon prices were reasonable, the agreement was necessary to prevent or eliminate price cutting or ruinous competition, or the conspirators were merely trying to make sure that each got a fair share of the market.
Price Fixing
Price fixing is an agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold. It is not necessary that the competitors agree to charge exactly the same price, or that every competitor in a given industry join the conspiracy. Price fixing can take many forms, and any agreement that restricts price competition violates the law. Other examples of price-fixing agreements include those to:
Establish or adhere to price discounts.
Hold prices firm.
Eliminate or reduce discounts.
Adopt a standard formula for computing prices.
Maintain certain price differentials between different types, sizes, or quantities of products.
Adhere to a minimum fee or price schedule.
Fix credit terms.
Not advertise prices.
In many cases, participants in a price-fixing conspiracy also establish some type of policing mechanism to make sure that everyone adheres to the agreement.
Bid Rigging
Bid rigging is the way that conspiring competitors effectively raise prices where purchasers — often federal, state, or local governments — acquire goods or services by soliciting competing bids.
Essentially, competitors agree in advance who will submit the winning bid on a contract being let through the competitive bidding process. As with price fixing, it is not necessary that all bidders participate in the conspiracy.
Bid rigging also takes many forms, but bid-rigging conspiracies usually fall into one or more of the following categories:
Bid Suppression: In bid suppression schemes, one or more competitors who otherwise would be expected to bid, or who have previously bid, agree to refrain from bidding or withdraw a previously submitted bid so that the designated winning competitor's bid will be accepted.
Complementary Bidding: Complementary bidding (also known as "cover" or "courtesy" bidding) occurs when some competitors agree to submit bids that either are too high to be accepted or contain special terms that will not be acceptable to the buyer. Such bids are not intended to secure the buyer's acceptance, but are merely designed to give the appearance of genuine competitive bidding. Complementary bidding schemes are the most frequently occurring forms of bid rigging, and they defraud purchasers by creating the appearance of competition to conceal secretly inflated prices.
Bid Rotation: In bid rotation schemes, all conspirators submit bids but take turns being the low bidder. The terms of the rotation may vary; for example, competitors may take turns on contracts according to the size of the contract, allocating equal amounts to each conspirator or allocating volumes that correspond to the size of each conspirator company. A strict bid rotation pattern defies the law of chance and suggests collusion is taking place.
Subcontracting: Subcontracting arrangements are often part of a bid-rigging scheme. Competitors who agree not to bid or to submit a losing bid frequently receive subcontracts or supply contracts in exchange from the successful low bidder. In some schemes, a low bidder will agree to withdraw its bid in favor of the next low bidder in exchange for a lucrative subcontract that divides the illegally obtained higher price between them.
Almost all forms of bid-rigging schemes have one thing in common: an agreement among some or all of the bidders which predetermines the winning bidder and limits or eliminates competition among the conspiring vendors.
Market Division
Market division or allocation schemes are agreements in which competitors divide markets among themselves. In such schemes, competing firms allocate specific customers or types of customers, products, or territories among themselves. For example, one competitor will be allowed to sell to, or bid on contracts let by, certain customers or types of customers. In return, he or she will not sell to, or bid on contracts let by, customers allocated to the other competitors. In other schemes, competitors agree to sell only to customers in certain geographic areas and refuse to sell to, or quote intentionally high prices to, customers in geographic areas allocated to conspirator companies.
Detecting Bid Rigging, Price Fixing, And Other Types Of Collusion
Bid rigging, price fixing, and other collusion can be very difficult to detect. Collusive agreements are usually reached in secret, with only the participants having knowledge of the scheme. However, suspicions may be aroused by unusual bidding or pricing patterns or something a vendor says or does.
Bid or Price Patterns
Certain patterns of bidding or pricing conduct seem at odds with a competitive market and suggest the possibility of collusion:
Bids
The same company always wins a particular procurement. This may be more suspicious if one or more companies continually submit unsuccessful bids.
The same suppliers submit bids and each company seems to take a turn being the successful bidder.
Some bids are much higher than published price lists, previous bids by the same firms, or engineering cost estimates.
Fewer than the normal number of competitors submit bids.
A company appears to be bidding substantially higher on some bids than on other bids, with no apparent cost differences to account for the disparity.
Bid prices drop whenever a new or infrequent bidder submits a bid.
A successful bidder subcontracts work to competitors that submitted unsuccessful bids on the same project.
A company withdraws its successful bid and subsequently is subcontracted work by the new winning contractor.
Prices
Identical prices may indicate a price-fixing conspiracy, especially when:
Prices stay identical for long periods of time.
Prices previously were different.
Price increases do not appear to be supported by increased costs.
Discounts are eliminated, especially in a market where discounts historically were given.
Vendors are charging higher prices to local customers than to distant customers. This may indicate local prices are fixed.
Suspicious Statements or Behavior
While vendors who collude try to keep their arrangements secret, occasional slips or carelessness may be a tip-off to collusion. In addition, certain patterns of conduct or statements by bidders or their employees suggest the possibility of collusion. Be alert for the following situations, each of which has triggered a successful criminal antitrust prosecution:
The proposals or bid forms submitted by different vendors contain irregularities (such as identical calculations or spelling errors) or similar handwriting, typeface, or stationery. This may indicate that the designated low bidder may have prepared some or all of the losing vendor's bid.
Bid or price documents contain white-outs or other physical alterations indicating last-minute price changes.
A company requests a bid package for itself and a competitor or submits both its and another's bids.
A company submits a bid when it is incapable of successfully performing the contract (likely a complementary bid).
A company brings multiple bids to a bid opening and submits its bid only after determining (or trying to determine) who else is bidding.
A bidder or salesperson makes:
Any reference to industry-wide or association price schedules.
Any statement indicating advance (non-public) knowledge of competitors' pricing.
Statements to the effect that a particular customer or contract "belongs" to a certain vendor.
Statements that a bid was a "courtesy," "complementary," "token," or "cover" bid.
Any statement indicating that vendors have discussed prices among themselves or have reached an understanding about prices.
A Caution About Indicators of Collusion
While these indicators may arouse suspicion of collusion, they are not proof of collusion. For example, bids that come in well above the estimate may indicate collusion or simply an incorrect estimate. Also, a bidder can lawfully submit an intentionally high bid that it does not think will be successful for its own independent business reasons, such as being too busy to handle the work but wanting to stay on the bidders' list. Only when a company submits an intentionally high bid because of an agreement with a competitor does an antitrust violation exist. Thus, indicators of collusion merely call for further investigation to determine whether collusion exists or whether there is an innocent explanation for the events in question.
Conditions Favorable To Collusion
While collusion can occur in almost any industry, it is more likely to occur in some industries than in others. An indicator of collusion may be more meaningful when industry conditions are already favorable to collusion.
Collusion is more likely to occur if there are few sellers. The fewer the number of sellers, the easier it is for them to get together and agree on prices, bids, customers, or territories. Collusion may also occur when the number of firms is fairly large, but there is a small group of major sellers and the rest are "fringe" sellers who control only a small fraction of the market.
The probability of collusion increases if other products cannot easily be substituted for the product in question or if there are restrictive specifications for the product being procured.
The more standardized a product is, the easier it is for competing firms to reach agreement on a common price structure. It is much harder to agree on other forms of competition, such as design, features, quality, or service.
Repetitive purchases may increase the chance of collusion, as the vendors may become familiar with other bidders and future contracts provide the opportunity for competitors to share the work.
Collusion is more likely if the competitors know each other well through social connections, trade associations, legitimate business contacts, or shifting employment from one company to another.
Bidders who congregate in the same building or town to submit their bids have an easy opportunity for last-minute communications.
Grant, Price fixing in PW. Never NEver never ever happen.
Can't go with ya on that one.
Can't go with ya on that one.
EcoClean
New member
I think this is all being blown out of proportion. I don't think Celeste's proposed new network has any intentions of "price fixing". When new contracters are around seasoned contracters, they may learn on their own that they may not be charging enough. This is simply learning about one aspect of the business. Besides, I didn't get the impression that this will even be a focused point in the Network. I'm not trying to argue or start a word fight; I just don't understand why Celeste's new network is taking so much heat over this issue when other networks, organizations, and BBS have been talking about pricing for years with no mention of "price fixing".
Micah, I Dont believe anyone here is saying that. These guys just want to make and awareness that no orgaziation can really discuss this with out that happening.
Maybe its a learned experinces that Celeste may consider changing or maybe not.
I behind whats shes doing either way because the simplicity of what shes doing.
Carolina Prowash
Exterior Surface Pros
Holy cow Grant....so much typing, but a very informative post nonetheless and one that would be worthy of repeating to a group of contractors when a meeting takes place.
One of the main reasons that I don't think the PWNC or any of its contractors would have to defend themselves is (a) we will all be aware of the potential of perception and (b) there are so many contractors in the Carolinas and those that elect NOT to join will still be bidding and doing business therefore would not be privvy to any of the inner workings of the network so would diffuse any suspicion.
I do appreciate all the support and input - thanks so much guys
Celeste
One of the main reasons that I don't think the PWNC or any of its contractors would have to defend themselves is (a) we will all be aware of the potential of perception and (b) there are so many contractors in the Carolinas and those that elect NOT to join will still be bidding and doing business therefore would not be privvy to any of the inner workings of the network so would diffuse any suspicion.
I do appreciate all the support and input - thanks so much guys
Celeste
Carolina Prowash
Exterior Surface Pros
Last call for this mailing: The first PWNC newsletter will be going out on Wednesday, December 12. If you're in the Carolinas and want to be on this list, please send your email address to:
info@pwnc.org
Look forward to hearing from you!
Celeste
info@pwnc.org
Look forward to hearing from you!
Celeste
Mike Cooke
Moderator
Celeste,
Did u get my e-mail address
Did u get my e-mail address
Carolina Prowash
Exterior Surface Pros
Yep - gotcha
Celeste
Celeste
Hello Cleaners in the Carolinas, get registared for Charleston
Carolina Prowash
Exterior Surface Pros
Wow - just came to see when I started this thing publicly....some thread I'm excited about Charleston!
I'm excited about Charleston!