Red Flag: Incomplete, Questionable Payment Documentation

The lack of  complete or appropriate supporting documentation is a potential indicator of many different schemes, but most directly of false, inflated or duplicate invoices and failure to meet contract specifications.  Be alert for: Unexplained or excessive delays in producing supporting documents that should be readily available; Discrepancies in the documentation, for example, between the amounts […]

Red Flag: Payment of Unjustified High Prices

Unreasonably high prices are a primary indicator of corruption, as the bribe-payer usually inflates its prices, with the permission and assistance of the bribe recipient, to fund the bribe and exploit the corrupt relationship.  Generally, corruption causes prices to rise dramatically, not just the few percentage points that might be expected as the result of […]

Red Flag: Questionable Invoices

“Questionable invoices” include those that: Are submitted without supporting documentation, or with copied rather than original supporting documents; Cannot be matched to the associated work product; Include terms and amounts that differ from the related purchase orders or contracts; Are unprofessional in appearance, e.g., lack complete addresses, are handwritten or without pre-printed numbers; Are unmarked […]

Red Flag: Questionable Contract Amendments (Change Orders)

Questionable contract amendments, or “change orders,” include those that: Increase the value of a contract without adequate justification or documentation; Increase the price of a sole source contract award above the sole source  threshold; Promptly follow a low bid award, making the contract price higher than other bid prices; Are disproportionately approved for certain contractors, […]

Red Flag: Delivery of Poor Quality Goods, Works or Services

Poor quality works can reflect not only shoddy workmanship but deliberate fraud. To constitute fraud, the poor quality work must be accompanied by willful and knowing misrepresentations by the contractor, for example, a contractor bills for work that it knows it did not do. This red flag can indicate the following schemes: Failure to meet contract […]

Red Flag: Acceptance of Poor Quality Goods, Works or Services

The continued acceptance of poor quality goods, works or services by project officials or inspectors, particularly after they are on notice of such problems, is a strong indicator of corruption. This red flag can indicate the following scheme: Corruption Click on the scheme listed above to see more information about the scheme, a more complete listing […]

Red Flag: Complaints Regarding Goods, Works or Services

Poor quality goods or works are the primary indicator of fraudulent implementation by a contractor.  Corruption should be suspected if project officials or construction supervisors continue to accept such works, especially after being put on notice of quality problems. This red flag can indicate the following schemes: Failure to meet contract specifications Product substitution Corruption Click on the […]

Red Flag: Long Delays in Contract Negotiations or Award

Long, unexplained delays between the submission of bids and the recommendation of a contract award or the signing of a contract can be the result of corrupt activity by project officials and bidders.  For example: Project officials might find it difficult to justify the award of a contract to a favored bidder under the procurement rules […]

Red Flag: Multiple Awards Just Under Procurement Thresholds

Multiple contract awards to the same company that are clustered just below a procurement threshold (for example, multiple sole source contract awards to one company for $49,000, when the limit for sole source awards is $50,000), is a strong indicator of possible corruption. Be particularly alert for such awards that appear to be the result […]

Red Flag: Winning Bid Very Close to Budget or Cost Estimates

A winning bid that is too close to confidential project cost estimates or budgets can indicate the leaking of bid information or an unbalanced bidding scheme.  Both schemes are usually the result of corruption, as project officials provide such information to a favored bidder to enable it to win. This red flag can indicate the following schemes: Leaking […]