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New Jersey asphalt companies accuse competitor of bid-rigging

On Behalf of | May 16, 2012 | Commercial Litigation |

Two New Jersey asphalt companies are suing an out-of-state competitor, accusing it of conspiring with several local municipalities to control the road paving business. The commercial dispute involves seven eastern Pennsylvania cities, all of which are said to have played a role in the competing business’ plan to rig the bidding process.

The lawsuit alleges that all seven of the municipalities issued invitations to bid on road construction projects that required specifications only one business could deliver. Those specifications required bidding companies to use a particular brand of asphalt sealer, called Grip Tight, as well as a specific grade of gravel to be used in a process called “high performance chip seal.”

The problem was that the defendant company is the exclusive distributor of Grip Tight, at least in the northeastern United States. Not only that, the lawsuit claims, but the defendant purchased the entire supply of gravel from the only quarry that produces the grade of gravel the municipalities required. Therefore, no other companies were eligible to bid on the projects. Finally, the municipalities required that bidding companies own and use a 22-foot gravel spreader, which eliminated much of the competition.

The attorney representing the two New Jersey companies explained that many times, municipalities will allow bidding companies to use substitute materials. But that wasn’t the case for these bid invitations, he said. The municipalities accepted no substitutes for the brand of pavement sealer they specified. In fact, according to the lawsuit, a road department employee for one township, which isn’t named in the lawsuit, admitted that the defendant gave the paving specifications to the township.

In addition to the company accused of rigging the bidding process, the lawsuit names three townships. The lawsuit’s claims include illegal restraint of trade, anti-competitive conduct, discrimination, interference with economic opportunity and violation of Pennsylvania’s competitive bidding law.

Unfortunately, bid-rigging is an all-too-common practice, in New Jersey and across the country. Rather than allowing companies to compete fairly, bid rigging creates unfair monopolies and prevents businesses from being allowed to expand and thrive. If you suspect your company is the target of a bid-rigging scheme, it may be time to contact an attorney who focuses on commercial litigation to ensure you aren’t shut out of further business opportunities.

Source: The Morning Call, “N.J. firms allege Emmaus company sought monopoly on paving jobs,” Peter Hall, May 3, 2012