The Most Common Schemes and Steps of Proof

This section lists the 16 most common corruption, bid rigging, collusive bidding and fraud schemes in development projects. Under each scheme see a brief description of the scheme, a complete list of red flags for the scheme, actual examples of the scheme, and the steps to help you determine if the scheme is in fact present.

The schemes fall into the following four categories:

Corruption, which includes bribes and kickbacks and hidden interests.  Bribes and kickbacks refer to the giving or receiving of a thing of value to improperly influence a contract award or other action; hidden interests refers to undisclosed financial interests in contractors and consultants by project and government officials.  Such offenses constitute a “corrupt practiceunder IFI Guidelines.

Bid rigging, which refers to various schemes by project officials to rig the selection process to ensure that a favored bidder wins and to exclude competitors.  As such, bid rigging is a red flag of corruption and circumstantial evidence of corrupt influence.

Collusive bidding, which refers to agreements among bidders to submit artificially high priced bids and otherwise defeat competition. Collusive bidding is punished as a collusive practice under IFI Guidelines.

Fraud, which includes, among other offenses, knowing and willful misrepresentations, the willful omission of material facts, the forgery of signatures or documents, the failure to meet contract specifications and fraudulent billings.  The various forms of fraud constitute fraudulent practices under IFI Guidelines.