Timothy Baugher, the former president of Pontiac-based Asphalt Specialists LLC (ASI), admitted to taking part in a secret scheme to rig bids for asphalt paving projects in Michigan. Baugher’s actions, carried out between July 2017 and May 2021, allowed him and others to cheat taxpayers and create the illusion of fair competition.
Court documents revealed that Baugher conspired with another company, Allied Construction Company Inc. (Allied), along with employees from both companies, to coordinate their bids on government paving contracts. Instead of competing honestly, these companies made secret deals to decide who would win the contracts and who would submit fake, non-competitive bids. This kind of scheme tricks customers into thinking they are getting a fair deal, when in reality, the companies have already rigged the outcome in their favor.
This guilty plea marks an important moment in an ongoing federal investigation into the Michigan asphalt paving industry. So far, ten people have admitted guilt in this far-reaching scandal.
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How the Scheme Worked
Bid rigging is when companies secretly agree to cheat the system by manipulating bids to take turns winning contracts. In this case, ASI and Allied would coordinate with each other to ensure that one of them would always win. For example, if ASI wanted to win a contract, Allied would purposely submit a much higher bid to make it look like ASI offered the best price. Customers thought they were getting a good deal, but it was all a trick.
The contracts affected by this scheme were funded by taxpayers, meaning public money meant to fix roads and transportation infrastructure was involved. The dishonest deals gave an unfair advantage to the companies involved and hurt honest competitors who were shut out of the process.
Speaking on the case, Acting Assistant Attorney General Doha Mekki said, “Americans deserve to pay a fair, competitive price to fix transportation infrastructure.” She emphasized that the Department of Justice is determined to hold people accountable when they break the rules and harm taxpayers.
Serious Penalties for Breaking the Law
Baugher’s guilty plea is just one part of a larger investigation by federal authorities. The Antitrust Division of the U.S. Department of Justice, along with the Offices of Inspectors General from the Department of Transportation and U.S. Postal Service, has been working hard to uncover wrongdoing in the asphalt paving industry.
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This investigation has already led to several guilty pleas. In January 2024, ASI and another executive from the company admitted to participating in the conspiracy. Allied and two of its executives also pleaded guilty back in August 2023. ASI was ordered to pay a hefty fine of $6.5 million as punishment for its role in the scheme.
What Happens to Baugher Next?
For his part in the conspiracy, Baugher pleaded guilty to violating Section 1 of the Sherman Act, a law designed to prevent unfair business practices like price-fixing and bid rigging. He now faces up to 10 years in prison and a fine of up to $1 million. For corporations, the penalties can be even higher, with fines reaching $100 million or more, depending on the financial harm caused by the crime.
Anthony Licari, Special Agent in Charge of the Department of Transportation’s Office of Inspector General, stated, “Fair and open marketplace competition is essential in providing consumers and taxpayers the integrity expected in procuring contracts funded with public dollars.” He and other officials stressed the importance of holding corporate executives accountable when they break the law.
A federal judge will decide Baugher’s sentence at a later date, considering the guidelines for punishment and other legal factors. Meanwhile, the investigation into bid rigging and other unethical practices in the asphalt paving industry continues.
