How Tendering Frauds Are Committed
Posted: Tuesday, January 19, 2010
by Dr irfan Ahmad
tender service
Definition
Procurement fraud can be defined as dishonestly obtaining an advantage, avoiding and obligation or causing a loss to public property or various means during procurement process by public servants, contractors or any other person involved in the procurement.
Procurement Fraud can be committed:
By Public Servants
From Outside
By Contractors & Suppliers
By Collusion
Inside collusion
By two or more Insiders
Outside collusion
By Two or more contractors
Cartels or collusion tendering
Mix collusion
Inside and outside personals working together.
Distinction between fraud and error
The basic distinction between fraud and error is that of intention. Any error is unintentional, i.e. the person committing the error does not do so knowingly. Errors are accidental and may arise due to negligence or a genuine misunderstanding on the part of the person committing then. As opposed to errors the fraud is intentional The person committing fraud does so knowingly, willfully, and with the motive of gaining advantage or benefits by cheating or causing loss or injury to another person or state, acting along or in the collusion with one and another.
Summary
A major reason why people commit procurement fraud is because they are allowed to do so. There area wide range of threats facing government agencies the threat of fraud can come from inside or outside the department, but the likelihood that a fraud will be committed will be greatly decreased if the potential fraudster believes that the rewards will be modest, that they will be detected or that the potential punishment will be unacceptably high. The main way of achieving this must to be establish a comprehensive system of control which increases the likelihood of detection and increase the cost to the fraudster.
It has been said that there are three requirements which need to be met to reduce the risk of procurement fraud; Good Ethics, Good People, Good System.
This Article has been viewed 215 times. (Not updated in real-time.)
Top-level comments on this article: (8 total)Thank you for the information, Doctor. I hope it can help save problems for someone.
I found this article informational but not all that fun to read. Maybe injecting a little humor or personal opinion?
I would have liked to read more about Good Ethics, Good People, and Good Systems as it relates to reducing the risk of procurement fraud. You got me interested anyway. Look forward to the next.
What a fascinating subject to write about. Very interesting indeed.
Useful information for when you need it. Anyone else picked up pencils at Ikea - apart from me, that is?
Thanks for sharing the information. It's a good article.
Hi Dr. Ahmad. The world will be a better place if there are no enterprising individuals who are inclined to commit fraud. Great article and well-written. From the definition you gave me before about tenders, it is also known here in the U.S. as an Invitation to Bid. Thanks again for the information. All the best to you and yours, ~Nenita~
you are welcome
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