Corrupt Practices during Pre-Qualification and Tendering Phase

The following are some examples of the circumstances in which bribes could be paid during the prequalification and tendering phase.

a) A bidder which is properly qualified may find itself being rejected at pre-qualification stage as a result of a bribe paid to a representative of the owner or engineer by another bidder. The reasons given for rejection would be artificial. Alternatively, no reasons may be given. The rejection of several potential winners could result in the favoured bidder being given an unfair advantage at
tender stage.

b) There may be, in relation to a project at tender stage, confidential details such as the owner’s minimum and maximum acceptable prices, or tender assessment system. Possession of this information may assist a contractor in its bid. The leaking of this information by a representative of the owner or engineer to the favoured bidder in return for a bribe may therefore give it an unfair
advantage.

c) The tenders may be received by the owner and not be opened at a public opening exercise. In this case, no-one except the owner will be aware of the bidders’ prices and other critical tender components. This secrecy will enable a representative of the owner to provide confidential information to the favoured bidder in return for a bribe. This bidder can then amend its tender (for example by dropping its price) so as to secure a winning position. The tenders can then be publicised, and the favoured bidder announced as the winner, and no-one will be aware that the winning bidder was given the secret opportunity to amend its tender.

d) The tender process may be corrupted by international pressure. For example, during an allegedly competitive tender process, the government of a developed country may influence the government of a developing country to make sure that a company from the developed country is awarded a project, even if it is not the cheapest or best option. Such pressure can take many forms, including the offer of aid, arms deals or agreements to support a government’s application to join an international organisation. Great lengths are taken to conceal this pressure in some cases. In
others, it is remarkably overt.

The following are some examples of fraudulent practices during the pre-qualification and tendering phase.

a) The bidders may secretly collude with each other to share the market. This normally entails the bidders agreeing that each one of them will win a certain number of projects, or a certain amount of turnover, in a particular sector. In respect of each project, a winning bidder will be pre-selected secretly by all the bidders, and the other bidders will put in tenders at a price which is higher than that of the pre-selected bidder.

b) The bidders may agree with each other on a “losers’ fee” arrangement. This normally entails the bidders agreeing that they will bid in full competition with each other (i.e. no price fixing agreement, or pre-selection of the winner). However, they agree that they will each include in their price a fixed sum representing the estimated aggregate bid costs of all the bidders. The winner will then divide this fixed sum equally between the losers. The primary reason for this arrangement is compensation for the irrecoverable bidding costs of the losing bidders.

c) A group of suppliers of materials may collude to fix the minimum price of the materials they supply. Even when there is competitive tendering, prices will be kept higher than would be the case with genuine competition.

Steering the water sector

Implementing HR in the water sector:

UN human rights system now has a separate mechanism exclusively dedicated to issues related to the right to water and sanitation. The resolution also confirms that governments have obligations to ensure access to safe drinking water and sanitation under international human rights law.

Here in Male’ we seem to have forgotten the stenching smell of groundwater in densely packed islands after our tap started running desalinated water. We pay $$ for that convenience without realizing that foreign private companies are gearing up to control the multimillion-dollar market to “upgrade” the nation's ancient water and sanitation systems.

Think. Coastal Cartagena was the first of about 50 cities and towns to privatize its water in Colombia. The capital Bogotá bucked the privatization trend, refused World Bank money and transformed its public utility into the most successful in Colombia. Which direction shall we go? Which ever course we decide on it is vital that we realize that MONOPOLY and CORRUPTION are the two ugly faces of underdevelopment.