Manipulation of bids

In the procurement process, bidders can manipulate bids by false statements in order to win the contract or increase (personal) profits.

Risk type: Practice

Risk driver: External

DESCRIPTION

Bidders can manipulate their bid by furnishing false documentation in order to win a contract. This risk is also known as fraudulent contractor qualification. Common false statements can concern the bidder’s financial condition (false financial statements, inflated sales amounts or account balances, etc.), its track record, or its employees’ educational or professional credentials. For example, a consulting firm can include a highly qualified consultant in its bid and replace that consultant with a less qualified and less expensive person after being awarded the contract. This is a very common scheme by bidders not only to win contracts but also to increase profits of contracts later on.¹

RED FLAGS

• Project owners that have worked with the bidder before have negative feedback or even blacklist the bidder.¹
• The bidder’s track record lacks credibility.¹
• Received bids include obviously incorrect statements.
• Bids are received with absent, inadequate, or altered supporting documentation.¹
• Bidders win contracts for which they have no apparent qualification.¹

KEY GUIDING DOCUMENTS

IACRC, 2015, Collusive bidding schemes, Guide to Combating Corruption & Fraud in Development Projects, International Anti-corruption Resource Center (IACRC), http://guide.iacrc.org/potential-scheme-collusive-bidding/, accessed 15.10.2015

FULL REFERENCES

1. IACRC, 2015, Collusive bidding schemes, Guide to Combating Corruption & Fraud in Development Projects, International Anti-corruption Resource Center (IACRC), http://guide.iacrc.org/potential-scheme-collusive-bidding/, accessed 15.10.2015