The persistent failure of qualified companies to bid is a strong indicator of bid rigging and corruption.
Firms can fail to bid for a number of reasons, including:
- Inadequate or short notice to submit expression of interest or to prepare bids;
- Inability to purchase the bidding documents;
- Unreasonably stringent pre-qualification requirements;
- Unreasonably narrow contract specifications;
- Intimidation and threats from project officials or other bidders;
- Agreements not to bid because of collusive bidding arrangements;
- Bidding would be futile because of corrupt relationships exploited by other bidders.
A review of several substantiated procurement fraud cases revealed that fraud and corruption was most likely present when less than one third of the companies that purchased bid packages actually submitted bids.
This red flag can indicate the following schemes:
Click on the schemes listed above to see more information on each scheme, a more complete listing of their red flags and steps to determine if the schemes are actually present.