Recipient

COMMUNICATION

Recovery Act Concerns

CompetitionThe Recovery Act encourages fixed price contracts and competition to the “maximum extent possible ”

• Suggestion of gifts, money, favors or gratuities

and competition to the maximum extent possible. Therefore, be on the lookout for bid rigging, price fixing and any indicators that suggest a violation of fair competition.Small Business ParticipationThe Recovery Act encourages funding to Small 

Frau

• Boastful, arrogant attitude• “Holier than Thou” demeanor

• Comments of relationships with management• Evasiveness or lack of communication

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Businesses. Too often, businesses who are in financial difficulty are tempted to commit fraud. Be VERY aware of communication, performance, and behavioral fraud indicators.Contract Financing

Evasiveness or lack of communication The Recovery Act allows for agencies to provide Frau

• Disinterest or lack of questions• WAY too many questions or requests• The SAME question over and over

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financing to contractors who find it difficult to secure cash flow in the current tight credit market. ANY contractor who requests contract financing should be carefully monitored for fraud, Structuring Contract DeliverablesThe Recovery Act permits agencies to structure 

• “Is there any way to get around this?”• Claiming ignorance of rules• Too much humor during conversations

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contract line items to allow invoicing and payments based on interim and partial deliverables, milestones & percent of completion. As such, please be on the lookout for fraud indicators regarding invoices such as: duplicates, copies, and non-verifiable vendors.BA i

• Frequent time extension requests• Payment advance requests • Bud

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Buy 

American

The Recovery Act requires that projects for the construction, alteration, maintenance, or repair of a public building or public work must utilize iron, steel, and manufactured goods produced in the U.S. unless expressly exempted. Beware of fictitious vendors, product substitution and scams to utilize foreign products without an exemption or waiver.

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• Resistance to audits, inspections and site visits• Claiming documents were “lost or destroyed”• Recipient employee relays concern or complaint

Large Money, Large ProblemsHistorically, when agencies are tasked to award large sums of money in a short amount of time the risk for fraud increases. Oftentimes, few select large companies are the only qualified bidders for large projects. Please be aware of market 

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Recipient employee relays concern or complaint conditions and report any pre-award indicators of

bid rigging, price fixing or market allocation.

See more at www.oig.doc.gov

ANYTHING that indicates lying, 

stealing, cheating, waste or abuse!
Recipient

BEHAVIOR

Recipient

BEHAVIOR

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PRE-AWARD• Collusive bidding or “bid rigging”

POST–AWARD• Product substitution

BE AWARE • Poor perform

– Suspicious bidding trends & patterns– Qualified bidders DO NOT bid– Competing bidders drop out

• Product overage• Suspicious or non-verifiable existence of vendors• Unauthorized personnel with access

• Tardy reportin• NO reporting• Too many err

– Competing bidders drop out– Competing bidders become subs

• Price fixing and pricing agreements

• Unauthorized personnel with access• Less than arms length transactions• Conflicts of interest 

S i i t d l ti it

• Repeated erro• Missing docu• No original do

• Defective & Inflated Pricing 

– Salaries, consultants – Equipment– Goods and services

• Suspicious, unexpected or unusual activity

• Recipient under investigation by another agency• Award money runs out too quickly 

• Altered docum• Duplicate doc• Too many bud

• Background checks indicate poor cash flow

– (i.e. Dun & Bradstreet)

POST–AWARD

• Suspicious use of cash transactions• Filing bankruptcy or financial problems• Site Visit / Inspection Concerns

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• NO budget re• Poor account• Consistent or 

• Limited internal controls • Excessive changes to personnel • Claiming the same costs twice – double dipping

– “Ghost” employees

– Missing equipment– Co-mingled projects

• Personnel ap

FOLLO

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• Unexplained increases in costs or claims• Shifting cost categories or accounts

– Project misrepresentations– Business misrepresentations

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