Potential Scheme: Excluding Qualified Bidders

Project officials can facilitate the selection of a favored bidder by improperly excluding other qualified bidders, often as the result of corruption.

Common methods to exclude qualified bidders include:

  • Adopting unreasonable prequalification procedures, for example, unreasonably high annual turnover requirements
  • Failing to adequately publicize requests for bids, for example, only advertising locally
  • Making it difficult or impossible for prospective bidders to buy bid packages
  • Allowing an unreasonably short time to respond to requests for bids
  • Adopting unreasonably narrow contract specifications, for example, using brand names to define contract requirements
  • Splitting purchases so that procured amounts are below the bidding limit (to allow non-competitive or sole source awards)
  • Bundling contracts in unreasonably large or small amounts to discourage or eliminate certain bidders
  • Intimidating or threatening potential bidders to discourage or prevent them from bidding
  • Improperly disqualifying bidders for trivial or correctable errors

RED FLAGS OF EXCLUDING QUALIFIED BIDDERS

  • See the list of common methods to exclude qualified bidders, above
  • One or a few contractors win a disproportionate number of contracts of the same type
  • Apparently qualified companies consistently fail to bid, or lose unfairly in the selection process
  • Fewer than 30% of the companies that purchase bid packages submit bids
  • Fewer than the expected or normal number of bidders, based on prior similar contracts, submit bids
  • Complaints from prospective bidders regarding the above practices

CASE EXAMPLES OF EXCLUDING QUALIFIED BIDDERS

See actual case examples of excluding qualified bidders from investigated cases.

BASIC STEPS TO DETECT AND PROVE EXCLUDING QUALIFIED BIDDERS

  1. Identify and interview all complainants and confidential sources to obtain further detail.
  2. Obtain the following documents and examine them for the red flags listed above:
    • Procurement Guidelines and thresholds
    • Requests for expressions of interest
    • Approved bidders list (short list) and prequalification criteria
    • Published notices and advertisements for bids
    • Requests for bids or proposals
    • Bid evaluation reports
    • Complaints from bidders
  3. Determine if a reasonable number of bids or proposals were received compared to the expected or previous number of bids for similar procurements.
  4. Determine if bidders were disqualified for what appear to be arbitrary or trivial reasons.