Case Example of Manipulation of Bids

Public Utility Agency

During a special audit of the Utility’s procurement function, a losing bidder reported that a junior member of the Bid Evaluation Committee (BEC) told it that other members of the BEC had removed required documents from its bid in order to disqualify the company.  The bidder claimed that other sources told it that the BEC did this in order to facilitate the award of the contract to another firm as the result of corruption.  The bidder insisted that its bid was complete and showed the auditors a retained copy of its bid which included all of the required documents.

The auditors reviewed the Utility’s procurement files and Bid Evaluation Report, which indicated that the complainant and other losing bidders were disqualified heir because bidding documents were incomplete. The auditors contacted the other losing bidders who also insisted that their bids had been complete when submitted.  None of the losing bids could be located in the procurement files.  Finally, the auditors discovered that the score of the winning bidder had been arbitrarily raised to defeat the one remaining competitor.

As a result of their findings, the auditors recommended that the Utility adopt more transparent procurement procedures, including public bid openings, reading out the contents of bids at the opening and permitting a losing bidder to be briefed on the reasons that its bid was unsuccessful.