This section describes the most common “red flags,” or indicators, of possible corruption, bid rigging, collusive bidding and fraud in development projects. In most cases look for a number or a pattern of red flags, rather than relying on any one red flag, before drawing any firm conclusions.
Knowledge of red flags also can be used to evaluate complaints. If, for example, a whistle blower alleges kickbacks, look for the red flags of kickbacks in the relevant transactions.
The information is organized as follows:
Red Flags Listed by Project Cycle
See thirty of the most common “red flags” in the contracting and procurement process, listed in the order that they might appear in a project, from the initial planning stage through the bidding process to contract award and implementation. Click on a red flag to match it to the related scheme or schemes and see how to follow up to determine if the scheme or schemes are in fact present.
A more comprehensive list of red flags for each scheme can be found in the Most Common Schemes and Steps of Proof section.
The Visible Red Flags of Implementation Fraud
View photos and descriptions of the most common signs of implementation fraud, including the failure to meet contract specifications and product substitution, in the construction of roads, buildings and the delivery of equipment.
“Proactive,” Computer-Aided Tests for Collusive Bidding, Bid Rigging and Fraud
This section briefly describes the steps to proactively look for indicators of bid rigging and fraud through computer-aided techniques. These are particularly effective to detect indicators of collusive bidding by contractors.