It can be the simplicity of it that may cause the greatest risk and impact, relaxing procurement procedures or not monitoring procedural non-compliance can create an environment where procurement fraud can thrive.
Would you recognise the simple ways in which procurement fraud can occur, would you be able to identify an insider threat from their behaviour or why certain decisions are made. I have outlined a chronology of case events below and then highlighted the specific fraud and corruption risk thereafter.
CHRONOLOGY OF EVENTS
A Request for Proposal (RFP) for consultancy services and a Request for Quotation (RFQ) for training services to support the consultancy services and capacity building was raised on the same date by a global organisation. A small number of companies responded to the bid and quotation public procurement notice submitting their technical and commercial bids.
Within the Schedule of Requirement the consultancy services was to be completed in 2 months.
At the closure of the bid deadline, vendors received a 'Public Bid Open Report' highlighting the 3 companies that submitted quotes for the training services. No confirmation was received regarding the award of the consultancy services contract.
Two months after the closing dates a notification was received by the vendors that the RFP for consultancy services had been cancelled. Within this email it also highlighted that similar services were being advertised.
The same day an RFP was published for the 'Development and delivery of a training programme'. It appeared that the RFQ had now been changed into an RFP public procurement notice.
When completing the new RFP it was noted that within the Terms of Reference there was a difference within the technical and financial deliverables, specifically, that the technical deliverables related to the training and the financial deliverables related to consultancy and that there was no mention of training.
This point was queried on three separate occasions before the TORs for the training bid was subsequently changed to that of consultancy and not training as published publicly within the RFP and continued to be published on the public procurement notices.
In the original RFP for consultancy services, the consultancy period was for 2 months. This new RFP for consultancy services was for 4 months.
Even though there had been a change from training services to consultancy services, it was publicly published as training services and in the electronic bid submission it was still highlighted as training services, even though the change in TORs for bid submissions were confirmed to bidders as consultancy services.
The bid closing dates were extended on more than one occasion.
The environment for fraud was created within the bidding process and is clearly a high risk of corruption and bid manipulation within the RFP and RFQ processes. If this was or became a common procurement practice then it is likely that procurement fraud would flourish and go on undetected as it had become custom and practice.
Procurement fraud is not just a financial crime; it's a betrayal of trust that undermines the integrity of public and private institutions
To highlight the risk in more detail it is possible that this is just bad procurement practices, however, it is necessary to outline concerns surrounding bid manipulation in more detail.
Initial technical and commercial bids and quotes for the consultancy and the training services could have been shared as the training bid was re-bid.
Only after continued clarification did the training requirement and terms of reference change to a consultancy bid.
The RFQ for the risk assessment consultancy was cancelled and looking at the public procurement notices was never published as an RFP.
Vendors were notified that there was only 3 companies submitted technical and commercial quotations for the training, however, were never updated on their quotes and in fact an RFP for risk assessment training was published for the same requirement.
Concern in providing these commercial and technical information is that as an RFQ was cancelled and then published as an RFP, technical and commercial information could have been improperly shared with another company to bid on the new RFP.
Why was there a need to publish the same requirement for risk assessment training within 2 months.
It is also of note that timescales for the consultancy was initially for 2 months and in the new TORs is for 4 months. This information is likely to change a companies financial bid as they may perceive that it is a bigger piece of work.
The companies bidding on the RFP for training would be companies that could provide the requirement but not necessarily the consultancy, changing the TORs in this way from a training to consultancy service may likely exclude consultancy and training companies from bidding.
Concerns that regardless of the quality of technical and commercial bids submitted, an environment of manipulation has been created where any bid submission can be rules in or out.
As a side issue, when procurement professional post their name in any messaging with bidding companies this communication leaves it open for individuals to be approached through messaging route in social media and increases the bribery risk.
As a final concern surrounding the governance of this global organisations anti-corruption and procurement systems, a report outlining these concerns was made on two occasions to their published hotline without any acknowledgement. It is unknown whether any action was taken.
CONCLUSION
As has been highlighted within other posts, to create an anti-corruption environment there should be communication and engagement with staff and suppliers. The lack of response to these reports and clear risk will mean that future reports where corruption risk is identified will likely not be received as victims of the corruption or perceived corruption will believe that no action will be taken or the organisation will look to hide these activities. Thus an organisation will never understand the level of fraud and corruption risk that it is being targeted by.
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