Berg Co. Pays $3.3M in Bid-Rigging Scheme

BOSTON – Berg Companies, Inc. (Berg) is shelling out $3.3 million to the federal government after admitting to a calculated scheme to inflate bids on contracts with the Defense Logistics Agency (DLA). The Washington-based company, now owned by Hunter Defense Technologies, Inc. of Solon, Ohio, systematically rigged the bidding process to ensure competitors won contracts at artificially high prices, ultimately costing taxpayers and the military.

The scheme, spanning from 2019 to 2021, revolved around Berg’s relationship with Noble Sales Co., Inc. d/b/a Noble Supply & Logistics (Noble), a Boston-based prime contractor for the DLA’s Maintenance, Repair & Operations (MRO) contracts for the European Command. These MRO contracts are supposed to leverage buying power to save money, but Berg and Noble turned it into a racket. Noble was required to solicit competitive bids, but instead, Berg colluded to submit inflated quotes.

According to the Department of Justice, Berg specifically coordinated with Noble and two other vendors to manipulate the bidding on rigid wall shelters. In one instance, Berg submitted inflated quotes on two solicitations for 10 shelters, allowing a New Mexico-based vendor to “win” at a higher price. They repeated this tactic on 26 solicitations for 29 shelters, benefiting a Florida-based vendor. The result? The DoD paid more than it should have, and the competitive process was gutted.

“As evidenced in this settlement agreement, these contractors manipulated and undermined the fair and open bidding process designed to save our military and taxpayers money,” stated United States Attorney Leah B. Foley. While Berg is cooperating, the damage is done. The US Attorney’s office made it clear that they will continue to pursue fraud, waste, and abuse of taxpayer funds and reward those who cooperate.

Assistant Attorney General Brett Shumate of the Justice Department’s Civil Division emphasized the danger of bid rigging: “This settlement reinforces the Department’s commitment in using the FCA to pursue anti-competitive fraud.” The DLA’s stated goal of “infrastructure savings, inventory cost reductions and favorable product pricing” was clearly not met in this case. U.S. Attorney Ryan Ellison for the District of New Mexico added that such collusion “erodes public trust, distorts fair competition, and drives up costs,” and that his office will continue to defend the integrity of the procurement process.

Berg has acknowledged responsibility for its role in the scheme. While the $3.3 million settlement offers some restitution, it won’t undo the fact that taxpayers were swindled. This case serves as a stark reminder that even companies supplying our troops aren’t above engaging in criminal behavior when the opportunity for profit arises.