Contract and procurement fraud
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| Bid Manipulation
In bid manipulation schemes, a procuring employee manipulates the bidding process to benefit a favoured contractor or supplier. Thus, these schemes occur during the solicitation and evaluation phases. In short, bid manipulation schemes involve a fraudster who attempts to influence the selection of a contractor by restricting the pool of competitors from whom bids are sought. Therefore, in these schemes, a corrupt vendor persuades a purchasing company employee to ensure that one or more of the vendor’s competitors cannot bid on the contract, thereby improving that vendor’s chances of winning the contract. Some common ways to commit these schemes include: Using obscure publications to publish bid solicitations Publishing bid solicitations during holiday periods Accepting late bids or falsifying the bid log Altering bids Extending bid opening dates without justification Prematurely opening bids Releasing confidential information Discarding or losing a bid or proposal Disqualifying bids for improper reasons (e.g., voiding bids for alleged errors in specifications) Adding new vendors to the qualified bidder list for no apparent reason Limiting the time for submitting bids so that only those with advance information have adequate time to prepare bids or proposals A variation of these schemes involves a corrupt sales representative who deals on behalf of a number of potential bidders. The sales representative bribes a contracting official to rig the solicitation process, ensuring that only those companies that he represents will get to submit bids. Likewise, in some sectors, it is not uncommon for buyers to “require” that bidders be represented by certain sales or manufacturing representatives. To protect their client’s interest, these representatives might pay a kickback to the buyer. The result of such transactions is that the purchasing company is deprived of the ability to get the best price on its contract. Some common red flags of bid manipulation schemes include: Weak controls over the bidding procedures Evidence of changes to bids after they were received Winning bid is voided for errors and job is re-bid or awarded to another contractor An otherwise qualified bidder is disqualified for seemingly arbitrary, false, frivolous, or personal reasons Procurement employee accepts late bids Contract is awarded to a non-responsive bidder The bids of competing contractors are lost Bid deadlines are changed Despite receiving fewer than the minimum number of bids, the contract is not re-bid Invitations for bids are sent to unqualified contractors Invitations for bids are sent to contractors that previously declined to bid Download 0.62 Mb. Share with your friends:
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