Example:

A group of contractors which routinely compete in the same market secretly agree to share the market between them.  They will each apparently compete on all major bids, but will in advance secretly agree which of them should win each bid.  The contractor which is chosen by the other contractors to win a bid will then notify the others prior to bid submission as to its bid price.  The other contractors will then bid at a higher price so as to ensure that the pre-selected contractor wins the bid.  The winning contractor would therefore be able to achieve a higher price than if there had been genuine competition for the contract.  If sufficient contracts are awarded, each contractor would have an opportunity to be awarded a contract at a higher price.  This arrangement is kept confidential from the project owners on respective projects who believe that the bids are taking place in genuine open competition, and that they are achieving the best available price. 

Explanation:

This is an example of a cartel arrangement.  They are also sometimes called competition offences or anti-trust offences.  In some countries these types of arrangements are made illegal by specific anti-cartel laws.  In other countries they may be dealt with under fraud laws (as the competitors are defrauding the project owner by pretending that they are in competition, whereas in fact they are colluding with the outcome that the project owners therefore pay more for their projects than they would have done had there been genuine competition).

Cartels are very difficult to identify if they are successfully kept secret by the participants. The project owner may believe that prices are unusually high, but it may be difficult to prove that this is because of a cartel rather than due to market conditions. 

Due to the difficulty in identifying cartels and the damage they cause, some countries offer full immunity to the first participant in a cartel to report the cartel to the authorities.  A condition of immunity will be that the reporting participant must fully cooperate in the investigation and give evidence against the other participants.  The other participants will then be heavily fined if found guilty, and may be banned from public sector contracts for a specified period.  Individual managers may be jailed.