Example:

A project owner appoints an engineer to manage a pre-qualification for a project contract so as to obtain a short-list of five suitable contractors which can then submit bids for the contract.  A contractor which wishes to be short-listed pays a cash bribe to the engineer to ensure that its main competitors are eliminated from the short-list on artificial grounds.  The engineer produces a short-list which contains the corrupt contractor and some weaker competitors, but not its strongest competitors.  The engineer falsely informs the project owner that it has selected the best five competitors.  The project owner relies on the engineer’s advice.  The contractor which bribed the engineer wins the project as the best evaluated bidder.

Explanation:

The project owner may call for bids from any organisation which wishes to participate (open competition).  However, in some cases, this may result in such a large number of bids being submitted that the project owner may have difficulty in evaluating them all.  Therefore, so as to prevent this happening, the project owner may call for a pre-qualification exercise before asking for bids.  Organisations which wish to bid for a specific contract, or for any contract during a specified time period, will be asked to submit details of their technical, commercial and financial status.  This may include a list of their key employees and equipment, a list of projects they have completed, their health and safety, quality and integrity management programmes, and their financial accounts.  The project owner, or its consultant, will then evaluate the documents received, and select a short-list of organisations which they believe have appropriate resources and experience to undertake the project or range of projects.  These pre-selected contractors will then be asked to submit a formal bid for a specific project.  

While this may be a more efficient process for the project owner, it adds an additional corruption risk to the process, as a corrupt contractor and corrupt pre-qualification evaluator can arrange for the improper admission of an unqualified contractor to the approved list, or the improper exclusion of qualified contractors.