Tender Fraud has been, is & will always be in the spotlight. There are many instances detected and they will continue to be detected, especially in emerging markets.
Policies and procedures need to be put into place to ensure early fraud detection. Government departments and private companies are focusing extensively on implementing and extending risk, governance and compliance systems.
The main objectives are to increase the entity’s ability to detect fraud early and implement stiff penalties and exposure for those found guilty of manipulating tenders.
Some of the measures that are used to avoid tender fraud are:
Conflict of interest is one area of tender fraud that is becoming more sophisticated. Fraudsters hide their true identities to conceal family relationships with influential people in tendering entities. It has been found repeatedly that government employees have ownership interests in suppliers, either directly or through their spouses or family members.
In a study by Price Waterhouse Coopers (PWC) bribery was the most prevalent type of scheme uncovered accounting for 27% of the schemes identified.
What's unique is that almost half (45%) of respondents did not enter a specific market or pursued a particular opportunity because of corruption risks. And 42% believe their competitors pay bribes. (1)
Tender fraud cases involving bribery represent some of the most objectionable abuses of authority and often involve experienced employees.
It is now the norm for all bidders for state & government contracts to be published on the relevant government department’s website, including the disclosure of personal details of all directors, shareholders, trustees and key officials.
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