Controlling Collusion in the Construction Industry: Some Lessons From Recent US Experience

• NCJ Number: 106574
• Author(s): M K Block; J S Feinstein
• Date Published: Unknown
• Length: 27 pages
• Grant Number(s): 81-IJ-CX-0062; 83-IJ-CX-4055
• Sponsoring Agency: National Institute of Justice (NIJ); US Dept of Justice NIJ Pub
• Sale Source: National Institute of Justice/; NCJRS Photocopy Services
• Publication Type: Research (Applied/Empirical)
• Language: English
• Country: United States of America

Annotation

An assessment of the impact of recent criminal antitrust enforcement in the construction industry concluded that increasing the penalties for antitrust violations is the most effective method for reducing collusion.

Abstract

The analysis used an indicator of collusion to estimate the effect on bid-rigging of the recent major increase in antitrust efforts related to highway construction and brought by the Antitrust Division of the U.S. Department of Justice (DOJ). This increase began in the late 1970's. The study used data from the Federal Highway Administration which covered contract information for all 50 States from 1975-1981. A second data set came from the Antitrust Division and covered all DOJ cases in highway construction in 1975-1982. The analysis of profit levels showed that the recent efforts to suppress the level of bid-rigging did work. Surprisingly, however, the greatly enhanced penalties for violating the antitrust laws appear to be the most effective in controlling the level of bid-rigging. No consistent evidence existed that the increase in the number of cases brought was, by itself, a very important factor in reducing collusion in highway construction. Data tables, 11 references, and an appendix presenting definitions of study variables. (Author abstract modified)