If rumour is anything to go by, over the years public servants involved in procurement have devised numerous methods to frustrate the competitive procurement process, even when they are forced into using some form of competitive process such as a tender or RFP.
Their methods include innovative techniques that very often maintain the outward appearance of competition.
These include:
- Asking bidders to quote for optional extras, none of which are ranked relative to each other: the argument in favour of this approach is that the municipality requires a facility or good that meets a specified minimum configuration. Beyond this limited specification, there are a number of features that would be “nice to have,” if the available funding is sufficient to meet the cost of any one or more of them once the bids are received. For instance, bidders may be asked to bid for a sub-compact economy car. However, they are also asked to provide optional pricing for the following additional features:
- A) Larger motor than base specification;
- B) climate control rather than air-conditioning;
- C) power seats;
- D) heated external rear-view mirrors;
- E) heated seats; and
- F) a GPS System.
Some of these features are obviously far more expensive than the others. If there is insufficient funding to purchase the most desired optional feature (say the larger engine), the municipality nevertheless wants the option to purchase the lesser desired options, to the extent that the funding it has available.
The “priority” of the options therefore cannot be predicted until the bids are received.
The problem with this line of reasoning is the evaluating team often can effectively gerrymander the competition by cherry-picking features.
For instance, it may be found while supplier “A” has the lowest base price bid, if one adds on option (a), (e) and (f), then supplier “B” has the lowest bid. If one selects options (c), (d) and (e) then supplier “C” has the lowest bid.
Thus, it is possible to play favourites, simply by using optional features for cover. Ironically, it is possible to make a perfectly plausible argument the municipality is getting the best value for money in the circumstances.
One other concern would be short-term submission deadlines.
The problem with tender and RFP contests is that there is no way of knowing whether someone has been tipped off that the competition was about to start.
A party who has a week or two head start can put together a much better bid. By making the deadline very short, no one else has a chance. The outward appearance is that the municipality is acting quickly to cover off a critical need.
Rigging the interview is also a common concern. Guess who is most likely to perform well in an interview – someone who knows what questions will be asked.
If municipal staff have a favourite, they just make sure that he or she knows what questions are likely to come up. In order to make the competition even more one-sided, the questions that are asked are so technical that no one would be able to answer them correctly unless they had been briefed about them in advance.
Rigging the interview is an old-time favourite method of rigging a competition.
Other things to watch for are the specifications are so vague only the preferred bidder can understand what is wanted. There are an almost limitless number of ways to skew the specifications to favour a preferred bidder.
Weighting the evaluation criteria to favour one supplier over the others is also common in bid-rigging. Entering into a secret collateral arrangements with the preferred bidder is another issue to be aware of. Arbitrary use of “mandatory” specifications is also a common trait in these schemes.
As much as a tender or RFP can be rigged to make sure that one person wins, it can also be rigged to make sure that another person loses – or, better yet, the person concerned does not put in a bid or proposal at all.
