The fact that their rates are similar does not suggest they're colluded -- the going rate is expected to be similar between competitors in a competitive market. People with higher than average rates will be encouraged to drop their rates when people do not hire them, and people with low rates will be encouraged to raise them when they are swamped with work and are continually told they were the cheapest.

> contractor rates are actually just market rates and thus appear to be colluded

But I’ve also seen these rates “protected” on the supply side (eg keeping resources benched, etc).

Typical salary “bands” for same role, experience, etc. are usually pretty wide. Hourly rate quotes are extremely consistent. Yet underlying value is labor.

To be clear, I’m not asserting that any foul play. Just an interesting observation.

What I know for a fact happens, is if (for example) I were Accenture bidding on a project, I know I'm probably up against Deloitte on this project, let me buy my old coworker a beer, the one that now works at a Deloitte, magically both bids have same rate or Accenture slightly undercuts. This is labor intensive though, so what I'd really do is just bid you a price based on what I or my boss already know Deloitte is going to bid because we've already had those beers and the conversations are just common knowledge at this point. So it's not really collusion, but has similar consequences.

On the other hand, salary bands typically are referred to as "market rates" which is a misnomer. There's no way an efficient market should have that amount of deviation as you mentioned.

It's a niche where I can legitimately say if you can afford less you don't need the value multiple I bring, and it's just straight contract labor, not consulting.

When the chips are down, sure, I absolutely do market work to survive, but when they're good, I can afford to do a value based pitch. Certainly a dynamic. :)