Risk Areas
1.2 Sustainment and Contracting
Explanation of risk area
Procurement has long been identified as a significant area of corruption risks; the World Bank, for example, has estimated that public contract awards worth about $1.5 trillion are influenced by corrupt practices. Risks affecting procurement are magnified by large sums of money involved, by the complexity of tender processes, and by officials’ discretionary authority. These risks are magnified in operational environments, which usually feature significant financial flows combined with tighter timelines, a greater degree of outsourcing, and fewer checks and balances. In these environments, risks of fraud, corruption, and theft, committed by both mission officials and contractors, all increase.
Examples
Case Study: Corruption and UN peace operations
Fuel diversion: UNMIL
In early 2017, the UN Mission to Liberia (UNMIL) Fuel Unit reported 34 cases of suspected fraud involving a total loss of 92,000 litres of fuel worth approximately $64,000. Mission personnel appear to have diverted fuel resources through excessive refuelling and theft of bulk fuel.
View case studyBribery and fuel theft: Afghanistan
In U.S. v Hightower, a military officer was found guilty of accepting bribes in return for allowing a host nation company to steal fuel. Fuel, an indispensable commodity, was the subject of other criminal cases related to deployments in Iraq and Afghanistan, and reported by the U.S. Office of Government Ethics. As a key commodity, fuel appears to have been at risk of diversion in most operations.
View external case studyIndicators & Warnings
Bypassing key tender procedures
Designing bids for unnecessary or inappropriate items
Vague or biased specifications and selection criteria in the bids
Narrow bid specifications, corresponding to one company’s product features
Regular use of ‘exceptional’ or ‘urgent’ orders without adequate rationale
Contracting officers’ or implementers’ insistence on dealing with particular suppliers
Awarding contracts unfavourable to the contracting entity
Bypassing key contract implementation procedures such as audits
Lack of documentation of key meetings from contracting officers, implementers, and/or auditors
Acceptance of agents, intermediaries or subcontractors, especially when their tasks are unclear or their work history inadequate
Continued acceptance of low-quality or delayed work
Sequential purchases from the same supplier just under a threshold that would necessitate an audit
Significantly higher or lower use of materiel than estimated
Excessive stocks of products, either because it sits unused or because wrong quantities have been delivered
Product substitution: products of lower quality than foreseen are delivered
Poor product quality and/or product failure
Changes in orders or product characteristics at short notice
Reports of wrongdoing