Contract and procurement fraud
Red Flags of Schemes Involving Collusion Among Contractors
Download 0.62 Mb.
|
- Navigate this page:
- Collusion Between Contractors and Employees
| Red Flags of Schemes Involving Collusion Among Contractors
Common red flags of schemes involving collusion among contractors include: The industry has limited competition. The same contractors bid each project or product. The winning bid appears too high. All contractors submit consistently high bids. Qualified contractors do not submit bids. The winning bidder subcontracts work to one or more losing bidders or to non-bidders. Bids appear to be complementary bids by companies unqualified to perform the work. Some bids fail to conform to the essential requirements of the solicitation documents (i.e., some bids do not comply with bid specifications). Some losing bids were poorly prepared. Fewer competitors than normal submit bids on a project or product. When a new contractor enters the competition, the bid prices begin to fall. There is a rotational pattern to winning bidders (e.g., geographical, customer, job, or type of work). There is evidence of collusion in the bids (e.g., bidders make the same mathematical or spelling errors; bids are prepared using the same typeface, handwriting, stationery, or envelope; or competitors submit identical bids). There is a pattern where the last party to bid wins the contract. There are patterns of conduct by bidders or their employees that suggest the possibility of collusion (e.g., competitors regularly socialise, hold meetings, visit each other’s offices, subcontract with each other, and so on). Collusion Between Contractors and Employees Often, procurement fraud schemes involve collusion between contractors and the procuring entity’s employees. The manner in which these schemes are perpetrated generally depends on the corrupt employee’s level of influence. The more power a person has over the bidding process, the more likely it is that the person can influence which entity is awarded the contract. Therefore, procurement employees involved in procurement fraud schemes tend to have a good measure of influence on the competitive bidding process. Various types of procurement employees are potential targets for corrupt contractors, including buyers, contracting officials, engineers and technical representatives, quality or product assurance representatives, subcontractor liaison employees, and anyone else with authority over the awarding of contracts. Frequently, when a vendor bribes an employee of the purchasing company to assist him in any kind of procurement fraud scheme, the cost of the bribe is included in the corrupt vendor’s bid. Therefore, the purchasing company ends up bearing the cost of the illicit payment. Procurement fraud schemes involving the purchasing entity’s contractors and employees generally include the following: Need recognition schemes Bid tailoring Bid manipulation Leaking bid data Bid splitting Unjustified sole source awards or other non-competitive method of procurement Download 0.62 Mb. Share with your friends:
|