Two San Francisco business partners who gamed state contracting rules to win $3 million in government contracts have pleaded guilty to bid-rigging in federal court and are awaiting sentencing.
John Brewer and Brent Vinch each face prison sentences of up to 10 years and $1 million penalties.
Vinch signed his plea deal last month, and prosecutors agreed to recommend that a judge reduce his sentence by up to 50 percent depending on his cooperation in court. Brewer signed his plea deal on Thursday and prosecutors agreed only to recommend a sentence on the lower end of his potential penalty.
A third defendant, Loraine Dixon, has not reached a plea agreement and charges against her are moving forward.
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According to plea agreements, this is how the company gained an unfair advantage in its bids.
While leading a company called Expert Network Consultants, Brewer and Vinch cultivated contacts who gave them tips about upcoming software contracts that different state departments planned to offer.
The software contracts tended to cost less than $250,000. In some cases procurement officers had to obtain only two bids before choosing a vendor because they were operating under rules that applied to small businesses.
Dixon, as a representative for a larger IT company with a state contract, allegedly had advance knowledge of some contracts and passed tips to Brewer and Vinch. Brewer and Vinch allegedly rewarded her with expensive cases of wine.
Brewer and Vinch then would craft a bid for a contract and encourage other associates to submit fake, noncompetitive bids for certain projects.
The fake bids would make the Expert Network Consultants proposal look more attractive, and win a contract for Brewer and Vinch. Prosecutors say the scheme allowed Brewer and Vinch to inflate their prices by up to 2 percent.
The company won 40 contracts using the scheme between 2008 and 2012, according to the plea agreements. It sold software to the Employment Development Department, the Department of Motor Vehicles, the Department of Justice and the Department of Insurance.