In the largest settlement of its kind in Utah, Price Waterhouse, an international accounting powerhouse, will pay state agencies $400,000 to settle an antitrust investigation by the state Attorney General's Office.
"We're trying to send a message here," said Wayne Klein, assistant attorney general."If you're trying not to be fully competitive in bidding . . . we're going to be looking for you. And if we catch you, we're going to punish you."
Utah Attorney General Jan Graham on Friday announced the agreement, in which Price Waterhouse and a former executive agree to maintain procedures that should ensure healthy competition for public bidding on consulting contracts, according to a statement by the Attorney General's Office.
The case is one of a handful of high-profile antitrust cases being battled by the local Attorney General's Office.
The complaint against Price Waterhouse started with an observation by a state transportation employee who had just attended a seminar about how to watch for collusive bidding practices.
The Utah Department of Transportation employee told the Attorney General's Office he noticed a similar situation involving competitive bids for contracts to consult on UDOT software systems, Klein said.
Antitrust laws prohibit scenarios where companies that would normally bid competitively against each other, join together. In these informal agreements, companies sometimes agree to submit a minimum bid and agree to alternate who will submit a lower, thus winning bid.
It's a bad situation for the public, Klein said, because the competitive process is interrupted. Higher prices - especially for state-funded projects - mean more paid out of state coffers and the public pocket.
"It's a concern when any business is involved," he said "It's of double concern when it's a state department."
In the agreement announced Friday, Price Waterhouse and its former director Don Hoffeditz of Sacramento, Calif., deny they violated Utah law and that they engaged in any wrongdoing.
The company agreed to pay $135,000 to UDOT, $115,000 to the Attorney General's Office, and $150,000 toward antitrust education and enforcement efforts, according to the statement.
Between 1980 and 1995, Price Waterhouse was awarded consulting work with UDOT under 11 contracts.
Klein would not say if the state is investigating other companies as part of this situation.
The Attorney General's Office tries to give state agencies tips to spot antitrust activity.
Antitrust arrangements can be suspected if people who typically would be submitting bids do not, or if there seems to be a rotation among the winning bids from an industry.
Sometimes bids are all very similar, except for the winning bid that is slightly lower. In other cases, companies may not put the effort into a bid they normally would, Klein said.
Competitive companies can spend up to $10,000 bidding for a project. At UDOT, the software consulting contracts awarded were $60,000 to $1 million, he said.