Former Michigan Asphalt Executive Pleads Guilty in Bid-Rigging Scheme

A former Michigan asphalt company executive has admitted to his role in a bid-rigging conspiracy that manipulated paving contract prices in the state, according to a recent announcement from the U.S. Department of Justice (DOJ). Timothy Baugher, the former president of Pontiac-based Asphalt Specialists (ASI), pleaded guilty last month to colluding with Clarkston-based F. Allied Construction and employees from both firms to rig bids in each other’s favor, per the DOJ’s statement.

According to the plea agreement, Baugher and his co-conspirators arranged bid prices so that the predetermined losing company would intentionally submit non-competitive proposals, ensuring that contracts were awarded as planned. The scheme lasted from July 2017 through May 2021, according to the DOJ. Baugher’s guilty plea marks the tenth conviction in the Justice Department’s ongoing investigation into bid-rigging and collusion in Michigan’s asphalt paving industry.

The DOJ further noted that ASI and another former executive from the company had already pleaded guilty in January 2024 for their involvement in the conspiracy with Allied Construction. Additionally, Allied Construction and two of its executives had entered guilty pleas in August 2023.

As part of his plea deal, Baugher admitted to violating Section 1 of the Sherman Act, a key U.S. antitrust law established in 1890. He now faces a maximum penalty of 10 years in prison and a $1 million criminal fine, per the DOJ statement. His sentencing hearing will be scheduled at a later date.

“Fair and open marketplace competition is essential in providing consumers and taxpayers the integrity expected in procuring contracts funded with public dollars,” said Anthony Licari, special agent in charge from the Department of Transportation’s Office of Inspector General, Midwestern region, according to the DOJ’s release. “Corporate executives who collude to fixing prices and rigging bids will be held accountable.”

In response to the legal developments, a spokesperson for ASI told Construction Dive that the company’s founders are no longer involved in its operations. The firm emphasized that it has implemented several compliance measures, including appointing new leadership such as a CEO, CFO, general counsel, and chief compliance officer. Additionally, ASI has strengthened its bidding integrity processes, legal reporting structures, and compliance policies.

“ASI today is not the company it was when these practices occurred, and they are inconsistent with our core values,” the company said in its statement. “ASI is committed to moving forward with a clear focus on serving our customers and doing well by doing right.”

Source: Construction Dive