Procurement – Bidding and Contract Award
- User department or technical staff insisting on using a particular brand or supplier despite there being a lack of objective justifications, and in particular, becoming irrational or irritated when queried or challenged.
- Use of the same supplier(s), or repeated extensions of contract with the same contractor(s), over years without any record of quotation exercise or price comparison, and the supplier(s)/contractor(s) are apparently not competitive in the market in terms of quality and price.
- Unfamiliar names of suppliers never/seldom heard of in the trade and whose reputation and reliability is unknown or in doubt, but either always winning bids or always on the quotation invitation list but never having any business awarded.
- Winning bids often just slightly below the next lowest bids, and/or always submitted in the last minute or late, etc.
- Staff frequently using exceptions or overrides to bypass normal procedures and controls, e.g. frequent use of the single quotation / direct purchase method claiming urgency.
- Purchases show pattern of being intentionally pooled together and approved while the normal approving authority is away from office (e.g. on long business trip or vacation), or repeated purchases of the same goods/services from the same supplier(s) often just below the value requiring a higher approving authority, etc. – showing signs of avoiding normal approval process.
- Where a contractor/supplier has been engaged under a term contract (often with highly competitive rates stated in the contract), staff frequently issue variation orders to the contractor/supplier for goods/services not covered by the contract (with different prices or specifications), resulting in increased payments to the contractor/supplier or substitution with lower quality goods.
- Unexplained/unusual increase in cost of goods sold to sales ratio, materials cost, etc. which does not compare with the industry norm or other branches of the same business operator.
Suspicious signs on quotations or quotation invitation
list, e.g. vendor which does not appear to be in the relevant business being
invited, vendor name very similar to another more well-known one or not on the
approved suppliers list, vendors’ addresses / phone numbers / formats of
quotations identical or very similar with each other, vendor’s contact
information matches that of an employee or with no information except a mobile
phone number, etc.