Kickbacks and corrupt payments – A kickback is paid by the contractor after they’ve received payment for the project. A corrupt payment is promised to influence the recipient for a successful bid. It can be monetary, but can also take the form of goods or services.
Corrupt Influence – This includes paying over the market value, buying more items than needed, qualifying an untested or unqualified supplier, and excluding qualified bidders.
Collusion and manipulation by bidders – Collusion often accompanied by a kickback and involves groups agreeing to submit complementary bids to win contracts, sometimes on a rotation basis. This system may be used to divide areas between select parties and to monopolize the field. Manipulation usually occurs when a bid, or circumstances surrounding it, are managed to benefit a preferred bidder. Examples are leaking information from fellow bidders, accepting late bids, and re-bidding of the tender.
Billing fraud – This is the intentional submission of false, duplicate, or inflated invoices by a supplier or contractor. This can also happen in collusion with the representatives of the buyer who will profit in some way or another from the fraud.
Conflicts of interest – This is where a member of the team fails to disclose their interests with a contractor or supplier, liaises with them unofficially, or accepts gifts or payments. Where an employee purchases items through their company and bills this to a project for private use, this is deemed to be personal interest and is fraudulent.
Delivery fraud – There are three main types of delivery fraud: variation abuse, contract specification abuse, and improper claims. In variation abuse, a contractor submits a successful low bid and subsequently submits further multiple variations to increase financial gain. Fraudulent contractors may flaunt contract specifications by delivering sub-par goods or services, aware they fail to meet the quality that is expected. In order to succeed, the quality of the items or work is concealed or falsely represented. Sometimes, suppliers exploit operating costs with false or exaggerated requests for reimbursement of expenses, personal or unauthorized spend, or duplication.
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