Case Example of Unjustified Sole Source Awards

Development Agency

The head of corporate procurement for an international development agency became progressively more concerned as she witnessed the award of more than 20 sole source contracts for IT services to a small start-up company, totaling more than $4 million over three years, processed at the personal direction of a senior executive.   Eventually she reported the matter to the agency’s integrity unit, which found the following.

The first contract was for $49,000, just under the $50,000 competitive bidding threshold, followed quickly by two other sole source contracts for a little more than $100,000 each, well above the threshold.  These funds were paid for a report on the usefulness of the internet, the contents of which, the investigation revealed, were clipped entirely and verbatim from existing websites, except for minor edits to remove the evidence of the actual source of the materials.  The investigators found that it took a little more than one day to locate, download and print the documents, which were contained in two, one-inch ring binders.  The IT firm, however, billed for three months of staff time for what it claimed was “original research” on the topic.

The IT company then forwarded the entire proceeds for the internet study to an account designated by the senior executive.  Thereafter, the firm received numerous additional sole source contracts for IT staffing services, most well above the source threshold.

The senior executive was terminated as the result of the investigation and the IT company declared ineligible for further contracts.