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Fraud in Procurement Process (Phase 6: Post Contract Award (Certify goods…
Fraud in Procurement Process
Phase 1: Establish need for good & services
Maintain excessive stock levels to justify purchases
Declare serviceable items as excess / selling as surplus while continuing to purchase
Buying in response to aggressive sales activities
Estimates prepared after RFQs requested
Failure to develop alternative sources
Suppliers with excessive stocks & try to sell out to buyers
Phase 2: Development of Specifications
Define specifications to fit capabilities of a single contractor / preferred supplier
Define specifications to fit a specific product
Advanced release of information to favored contractor
Selective release of information to favored contractor
Breaking up of requirements to allow rotation of bids
Unclear specifications that make comparisons of estimates complicated
Phase 3: Pre-solication ( before bidding)
unwarranted & misinformation sole source justifications
erroneous statements to justify sole source
Justification of sole source signed by unauthorized managers
technical personnel provide advance info to carefully selected suppliers
Invalid restrictions in RFQ documents to limit competition
Phase 4: Solicitation
Restriction on procurement to prevent qualified suppliers
Limiting time for submission tenders which only allow those with advance information can respond
Improper social contact with supplier representatives
Conduct bid conferences in such a way that bid rigging / price fixing is facilitated
Phase 5: Bid Acceptance
Improper acceptance of late bid
Falsification of documents / receipts to get a late bid accepted
Change in the bid after other bidders' prices are known ( change date, prices)
Falsification in supplier's qualifications, financial capability, successful completion of previous jobs
Submission of bids by one bidder in a different party's name
Rejection of bids w/o any valid reason
Deliberate loss of bids
Use biased individuals on evaluation panel
Phase 6: Post Contract Award
Certify goods w/o inspections
No action taken for non-compliance with contract terms & conditions
Double payments for same items/ services
Contract files are incomplete
Products ordered been substituted
Time sheets signed & approved w/o monitoring
Being invoiced for items not delivered
Costs increase significantly after 1st order
Invoices settled earlier than contract requires
Charge for skills levels below those contractually agreed