Collusive Tendering or Government Fraud?

Several Town Board meetings ago, a desperate Mr Feiner went on yet another attack against Town residents accusing them of bid-rigging regarding the former WestHelp Property and the Board-sanctioned MRH “deal”. Using his “Feiner Deflection Mode” persona, he began his statement and almost at once realized he could capitalize on his own dishonesty and deflect away from he and his Board, projecting the problem onto the public. Immediately after he accused everyone of bid rigging, Councilman Francis Sheehan could momentarily be seen reacting by rolling his eyes. Seconds later, the Board was staring down at the dais countertop, probably thinking, “Oh crap! He’s at it again.” There is no shortage of amazing statements that can eminate from our savant Supervisor. Since Mr Sheehan and Ms Juettner are running for Town Council in the upcoming election, neither offered any form of bail out assistance, trying to remain as distant as possible without snapping the cord from Mr Feiner’s campaign funding checkbook.

The Organization for Economic Co-operation and Development (OECD) is an international agency that has created a document entitled Guidelines For Fighting Bid Rigging in Public Procurement.
This document contains much information as to the bid-rigging, also know as Collusive Tendering. They make this statement: “Bid-rigging conspiracies can take many forms, all of which impede the efforts of purchasers - frequently national and local governments - to obtain goods and services at the lowest possible price. Often, competitors agree in advance who will submit the winning bid on a contract to be awarded through a competitive bidding process. A common objective of a bid-rigging conspiracy is to increase the amount of the winning bid and thus the amount that the winning bidders will gain.”

What is interesting throughout the document is the constant mention of collusion between bidders and how to recognize it and what safeguards should be in place to ensure bid-rigging is not happening on a particular project. What is lacking, or more directly not discussed, is the collusion between a bidder and an elected official and what they may be doing outside of the bid process. 

Case Example #1:

We have an a piece of commercial property a community acquired through foreclosure. Let’s also say that the community was required by law to sell the piece of property. And, the community could sell the property as a direct, private sale or an RFP. So far so good, but lets examine the circumstances and see whether they lead to bid rigging or not?

Circumstances:

Before the process even begins, an already proven guilty corrupt political leader has secret meetings with a prospective purchaser of a piece of commercial property. These meetings find arrangements being made without the knowledge of colleagues that work hand-in-hand and in constant agreement with this corrupt politician. He then tries to create an illegal lease deal for his conspirator. When that is stopped, he offers a sale. When a higher offer is tendered, he refuses it and continues to offer the lower bidder the property.

Example #2:

A private resident has a .7 acre piece of property he has put up for sale. There are no takers. Being industrious, he reaches out to his political representatives about how he can sell the property and what would be the best avenue to approach. It’s suggested he use state, county and local buzzwords to help entice the government to purchase it. He’s told to use buzzwords such as homeless, affordable housing, municipal workers and the always reliable firefighters, police and teachers. 

Circumstances:

Before the process even begins, an already proven guilty corrupt political leader has secret meetings with a prospective purchaser of a small piece of combined commercial/residential property at the entrance of s small, lower income neighborhood. It is predetermined by the already proven guilty corrupt political leader that another 7-story affordable housing apartment in an already saturated area would be acceptable. When the neighborhood complains, he tells them he already green-lighted this project and while the affordable management company will run it, he neglects to tell them they will only be managing it for four years. At that point it will get “sold” to one of their for-profit subsidiaries and no longer be restricted to low income residents. As mounting resistance increases, he continues to lie to the neighborhood saying it cannot be changed. Legal challenges go unheeded and the neighborhood loses. 

Example #3:

Time is wearing on and an already proven guilty corrupt political leader is nervous about his re-election chances. He decides he needs to acquire more votes previously unachievable based on money he illegally funneled to a alleged corrupt school board, whose former members are now sitting politicians. To get these votes, he needs the higher level politicians to support his scheme. They are all too willing.

Circumstances:

Two years leading up to an election, an already proven guilty corrupt political leader decides on his own to abandon the community’s affordable housing resource that was gifted to the community from a superior agency, which allows them to maintain and collect rent from for many years with little or no effort. As a way to gain votes from that community, he begins working with other higher level politicians and informs them of his plans (or maybe not). The already proven guilty corrupt political leader begins a misinformation campaign to turn the property over to a school for handicapped individuals, stating that this is the only property that can work for them – as long as it is destroyed. The already proven guilty corrupt political leader decides to award the bid to a start-up company who falsified bid submission documents to receive the bid. The already proven guilty corrupt political leader adamantly insists the bid go to this company.

Example #4:

A developer purchases a small piece of residential property but knows he can get the already proven guilty corrupt political leader to spot-zone it to what they want based on their private meetings. Oversized and unwanted by the neighborhood, the plan gets immediate and unrestricted municipal approval.

Circumstances:

Before the process even begins, an already proven guilty corrupt political leader has secret meetings with a prospective purchaser of a small piece of property in the middle of a small residential neighborhood for the purpose of building their proposed assisted living housing. The neighborhood objects to the oversized structure on an undersized plot. The already proven guilty corrupt political leader states he is in favor of this oversized proposal, to which the neighborhood again objects. As a minor concession, the developer is allowed to resize the footprint of the structure and increase the height to not lose any billable apartments. The already proven guilty corrupt political leader has the developer’s attorney’s craft a zoning rule change that over-benefits the developer. The Town then adopts as a Town-wide zoning change, allowing unrestricted and oversized assisted living housing in every neighborhood.

Would these constitute bid-rigging? In the context of the The Organization for Economic Co-operation and Development, it is hard to say. However, there are several signs that indicate bid rigging that may be applicable throughout these few (and there are more) examples. Regular meetings between the bidders and the recipient take place, the same suppliers are the repeated bidders (and awardees), regular suppliers fail to bid, suppliers withdraw from the bidding process, spoken or written references to the bids, suppliers meet privately with parties offering the bids, bids are accepted from companies incapable of successfully executing the contract, a “last minute” bid is “found” or submitted after the other bids have been opened.

Is this bid rigging? Or is merely accusing residents who are not a part of the process and are wholly reliant on the information supplied from the community and it’s leaders, enough to constitute bid rigging? ABG is insulted that Mr Feiner would even allude to, let alone accuse residents of bid rigging given his history. Clearly, there is bid rigging taking place in our Town. Mr Feiner, however seems to have it backwards.