Case Example of Product Substitution

Equipment Supply Contracts A detailed review of several donor-financed health sector projects revealed numerous instances of the substitution of substandard medical equipment and materials used in the construction of hospitals, including the inoperable medical equipment illustrated in the photos below. Previous similar reviews and investigations revealed that such schemes were often implemented through bribes of […]

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 […]

Case Example of Leaking Bid Information

Road Contract A national road agency became concerned by escalating bid prices in its internationally-financed road project.  As a result, the agency adopted a confidential policy that it would not accept any bid that was 30% or more above the Agency’s cost estimates.  In the next round of bidding, the winning bidder submitted a bid […]

Case Example of Fictitious Contractor

Feasibility Study An employee of an international donor submitted an application to engage a consultant to prepare a feasibility study for a proposed project to import natural gas from a neighboring country.  The study was approved at an estimated cost of almost $500,000. The employee conducted a sham “competition” for the study and selected a […]

Case Example of False Statements and Claims

Construction Contract A losing bidder for a large construction contract complained to the international donor that the Project’s Bid Evaluation Committees had improperly disqualified it and another firm for trivial and correctable errors in their bid documents, leaving only one remaining bidder, which was awarded the contract. The investigation confirmed that the two firms had […]

Case Example of False, Inflated and Duplicate Invoices

South Asia A former employee of an international consulting firm reported that the company’s South Asian branch agreed to pay a kickback in exchange for a contract award, with the bribe to be financed by the submission on false and inflated invoices. The investigation disclosed the following. The firm’s contract provided that it was entitled […]

Case Example of Failure to Meet Contract Specifications

Urban Road Project The contract specifications for this road project called for an urban asphalt road in the capital city that would handle substantial vehicle and truck traffic and which would last for ten years.  The picture of the road, below, was taken only thirteen months after completion. The investigation revealed that the contractor had […]

Case Example of Excluding Qualified Bidders

Construction Contract A losing bidder for a large construction contract complained to the international donor that the Project’s Bid Evaluation Committees had improperly disqualified it and another firm for trivial and correctable errors in their bid documents.  This left only one evaluated bidder, which was awarded the contract. The investigation confirmed that the two firms had been […]

Case Example of Change Order Abuse

Central Asia Agricultural Improvement Project A “representative” of a Project Implementation Unit (PIU) paid an unannounced visit to a US company that was bidding for a $25 million agricultural testing laboratory.  He told the owners that they would win the contract if they hired him as a “consultant” to help prepare its bid.  The rep […]

Potential Scheme: Bribes and Kickbacks

A bribe is usually defined as the giving or receiving of a “thing of value” to corruptly influence the actions of another, most commonly to influence a contract award or the execution of a contract.  A “kickback” is a bribe paid incrementally by the contractor as it is paid, usually an agreed percentage of the […]