Antitrust Analysis of Competitive Bidding in Bid Depository Systems

A major portion of construction in the United States involves competitive bidding. Participants in the delivery of construction projects have an interest in the regularity of the bidding process. Bid shopping is a general contractor practice focused on lowering bid prices of trade contractors. This practice has the potential to affect the quality of construction delivered and the viability of individual trades. Such industry practices have given rise to control of bidding, in particular to bid depository, with overall beneficial results. The bid depository interjects a neutral party between the general contractor and the trade contractors to receive trade bids and present them in a timely fashion to meet overall project bidding. Where activities of the bid depository have restrained bidding, antitrust actions have been brought. As a consequence, bid depositories have had a checkered existence in this key area of the construction industry. This paper reviews the rationale for bidding controls, and the legal issues involved in bid depository operation. Guides for lawful operation of a bid depository are offered.