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Module 5:  Preventing corruption in project procurement

Monitoring

  • Appropriate senior management of the project owner monitor the procurement phase, and are alert to possible corruption indicators; e.g:
    • splitting up of contract amounts so as to come below a threshold
    • apparent urgency requiring sole sourced or accelerated procedures
    • the specification favouring one bidder
    • bids accepted after the submission deadline
    • an unusually low number of bids submitted
    • unusually low or high bid prices
    • complaints from losing bidders
    • unsuitable design, materials, or construction methods
    • unsuitable contract conditions
    • the appointment of contractors who are not suitably qualified
    • conflicts of interest in relation to project owner or bidder personnel
    • unknown or suspicious beneficial ownership of bidders
    • possible cartels (see below).
  • The person undertaking the monitoring reports any suspicious findings to the board of the project owner.
  • Specific monitoring should be undertaken in order to detect possible cartels.  If a cartel is well concealed by the bidders, it may not be possible to identify.  However, carelessly concealed cartels may be identifiable.  Possible monitoring actions include:
    • comparing bidders’ prices for patterns (e.g. prices differ by the same percentage spread, or BOQ rates are the same for losing bidders)
    • comparing bidders’ documents for similarities which suggest copying (e.g. identical method statements)
    • checking for prices which materially exceed market
    • identifying prices which are unusually close to the confidential estimate
    • internet searches of the bidders to check for rumours of cartels.
  • The person undertaking the monitoring reports any suspicious findings to the board of the project owner.
  • In the case of public sector contracts, the monitoring should ideally be undertaken by a reputable and suitably qualified independent third party who in addition to the above requirements:
    • issues periodic public reports
    • reports suspicions of corruption to the investigating authorities.
  • Monitoring is distinct from auditing, in that:
    • monitoring is a continuing ongoing process throughout the procurement phase by a manager or third party who is familiar with the project
    • auditing is a distinct activity undertaken by an audit specialist which takes place after the procurement has been completed.
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January 2025
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