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Guide to Combating Corruption & Fraud in Infrastructure Development Projects

  • Detection
    • Complaints
      • General initial interview questions
      • How to Generate Complaints and Reports
      • List of fraud reporting sites for Multilateral Development Banks
    • Red Flags
      • Red Flags Listed by Project Cycle
      • “Visible red flags” of Implementation Fraud
      • Proactive Fraud Detection Tests
    • Due Diligence
      • “Top Five” Due Diligence Background Checks
      • Free and Subscription Internet Sites
      • Local and On-Site Due Diligence Checks
      • Due Diligence Service Providers
  • Proof
    • Proving Common Schemes
      • Corruption Schemes
      • Bid Rigging Schemes
      • Collusive Bidding Schemes
      • Fraud Schemes
      • The Basic Steps of a Complex Fraud and Corruption Investigation
    • Elements of Proof for Sanctionable Offenses
      • Elements of Proof of Corrupt Practices
      • Elements of Proof of Obstructive Practices
      • Elements of Proof of Coercive Practices
      • Elements of Proof of Collusive Practices
      • Elements of Proof of Fraudulent Practices
  • Evidence
    • The Basics of Evidence for Investigators
  • Prevention
    • Anti-fraud Resources
Home » Proof » Most Common Schemes » Potential Scheme: Split Purchases

Potential Scheme: Split Purchases

Project officials can split what should be a single contract or purchase into two or more components, each below the relevant procurement threshold, to facilitate sole source or less competitive contract awards.  For example, what should be a single procurement of labor and materials for $200,000 can be arbitrarily split into two contracts – one for labor for $99,000 and the other for materials for $99,000 – to avoid the need for competitive bids for contracts over $100,000.

Split purchases also can be used to avoid upper level review or to facilitate other schemes, such as kickbacks or fictitious vendors.

RED FLAGS OF SPLIT PURCHASES

  • Two or more related purchases from the same supplier each in amounts just under competitive bidding thresholds
  • Unjustified separation of components, for example, labor and materials, for a single contract, to avoid competitive bidding thresholds
  • Bid packages in amounts just below procurement thresholds

CASE EXAMPLES OF SPLIT PURCHASES

See actual case example of split purchases from investigated cases.

BASIC STEPS TO DETECT AND PROVE SPLIT PURCHASES

  1. Identify and interview all complainants to obtain further detail.
    • General interview questions
    • Split purchases questions
  2. Obtain the following documents and information and examine them for the red flags listed above:
    • Relevant procurement thresholds
    • Purchase orders and contracts
    • Change order requests and approvals
  3. List purchases by date, amount and supplier and examine for indications of split purchases.
Category: Most Common Schemes

International Anti-Corruption
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