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Non-Collusion Affidavits: More Than Just Filler for Your Bid Files

8/20/2013
Non-collusion affidavits serve some very valuable purposes, and as such, should be an integral part of every bid project file.
 
Non-collusion affidavits are sworn statements executed by vendors along with their bid submissions attesting that the vendor has not colluded with any other vendors in preparing the bid. Conventional wisdom says every vendor responding to a competitive solicitation should complete these documents. 
 
But the natural question is: What unscrupulous vendor would rig bids and then honestly disclose that fact on a non-collusion affidavit? The answer, of course, is none. Still, non-collusion affidavits do have benefits, and they fall into three categories:
 
Education
 
Large, sophisticated corporate bidders are usually well-advised and aware of antitrust laws and their impact on the bidding process. Many medium-sized and small businesses are similarly aware that collusion with competitors in the preparation or submission of a bid is illegal. Yet that is not necessarily true for all business enterprises. 
 
The Attorney General’s Office regularly encounters small companies and sole proprietors that are genuinely unaware that agreeing with one’s competitors on price or any other terms of sale is a violation of state and federal antitrust laws. If reading and signing a non-collusion affidavit informs even one potential bidder that all bids must be made strictly independently, the document has served a valuable purpose. The result will be a better-informed pool of bidders and more successful competitive solicitations.
 
Deterrence
 
Some would-be conspirators are more concerned about perjury laws than they are about antitrust laws. Falsification, the making of an intentionally false statement sworn to before a notary public, is a first-degree misdemeanor under Ohio Revised Code Section 2921.13(A)(6). In the final analysis, it makes no difference what deters a potential bid-rigger. The main thing is that he is deterred!
 
Remediation
 
Let’s say that the non-collusion affidavit failed to educate or deter a particular vendor. A fully executed non-collusion affidavit can be a valuable tool in holding wrongdoers accountable and securing a remedy for the harm they cause. It can be used in criminal prosecution or civil litigation against such a party.
 
First, a charge of falsification can be effectively combined with charges for violation of antitrust laws to strengthen a criminal case. Second, in the event the just-discovered illegal activity has been occurring for a significant period of time, the Attorney General or other counsel bringing civil antitrust claims may face statute of limitations problems. (Under Ohio law, the statute of limitations for recovery of damages on antitrust claims is four years.) However, courts often grant relief from the running of a statute of limitations when a party has engaged in fraudulent concealment of its unlawful acts. An intentionally false non-collusion affidavit can be an extremely valuable piece of evidence in establishing fraudulent concealment.
 
The bottom line is that while requiring non-collusion affidavits may seem like a meaningless act that does nothing more than add to the paperwork or bytes a public entity has to store, nothing could be further from the truth. They serve a variety of functions, all with the end result of making the market more competitive for the benefit of Ohio taxpayers. As such, you should ensure they are a part of every bid package.
 
Jennifer L. Pratt, Chief
Ohio Attorney General’s Antitrust Section