**We examined results using different thresholds as a robustness check.** In the following discussion, a distinction will be drawn between “soft” and “rigid” red flags. Table 2 describes the different definitions in each case. The rigid standard imposes stricter requirements on indicators used to increase the confidence that an unusual pattern in contracting is present. Soft red flags weaken the requirements for the flag indicator, although even “soft” levels are set relatively high. Thus, we observe soft red flags with higher frequency that the rigid ones.

_<u>Table 2: Red Flag Definitions</u>_

|**II**|**The definition of warning signs**|**Acceptable range**|
|---|---|---|
||**_Advertising/ Bid opening_**||
|1|Time between advertising of the contract and bid opening (weeks)|Greater than 6 weeks for ICB,<br>greaterthan 4weeksforNCB|
|2|Time betweenbid opening and bid evaluation|Less than3months|
|3|Numberofsubmitted bids|Atleast4bids|
|4|Ratio of submitted bids to the number of companies that bought<br>bidding documents (%)|Soft Threshold: Greater than 50 %<br>RigidThreshold: Greaterthan30 %|
||**_Bid evaluation/ contract award_**||
|5|Time betweenbid award and actualcontract signing date|Less than3months (~92days)|
|6|Ratio of non-responsive bidders to all bidders|Soft Threshold: Greater than 50 %<br>RigidThreshold: Greaterthan30 %|
|7|Was thelowest bidderconsiderednon-responsive?|Yes|
|8|For ICBcontracts: didinternationalcompanies bidinthe auction?|Yes|
|9|If the winner is the lowest bidder, what is the percent gap between<br>1<sup>st</sup> and2<sup>nd</sup> bid quotes?|Soft Threshold: Greater than 20%<br>RigidThreshold: Greaterthan30%|
|10|Were any two bids submitted within 1 % (Rigid Threshold) or<br>2.5 % (SoftThreshold) ofeachother?|No|
|11|Difference betweencontract estimate and winning bid|Less than30%|
|12|Difference betweencontract award andfinalcontract amount|Less than30%|
|13|Thresholds for procurement methods and prior review|Threshold exceeded by less than<br>30%|

**Our robustness checks did not significantly alter results.** For example, a rigid red flag on the ratio of submitted bids to companies that bought bid documents will be raised when the ratio is equal or less than 30%, suggesting that the remaining two-thirds of bidders abstained from further bidding. A soft red flag will be raised if fewer than 50 percent of firms bid. For simplicity, we only present findings based on rigid definition of red flags; soft red flag statistics can be found in Annex Table A2.  As would be expected, there are considerably more red flags using a ‘soft’ classification.  But this different classification does not alter the ranking of projects by number of red flags in contracts, or substantively alter other results presented below.

**Table 3 summarizes the results regarding 13 rigid red flags** , which were ranked from the most frequent to the least frequent.  There were total of 142 rigid red flags detected in the sample of 60 contracts compared (178 soft red flags were detected). The most common red flags revealed by our analysis are limited competition in procurement auctions, unreasonable delays associated with signing a contract, and limited participation of international companies in ICBs.  We discuss the red flags and results in detail below, in order of occurrence through the project cycle.

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