Understanding the Red Flags of Collusion in Contracting
The Department of Justice’s Framework for Tackling Unfair Contracting Practices
The United States Department of Justice (DOJ) is cracking down on vendors or contractors who engage in the practice of collusion on contracts. Vincent M. Walden,CFE, CPA, wrote an article in the March/April 2020 issue of the Fraud-Magazine about the DOJ’s efforts to go after collusion practices in contracting. In the article, he provided information on what is collusion and the red flags that the DOJ identified as areas that created collusion in contracting.
For the general public and those vendors seeking contracts, this article provided some information that you should pay attention to when bidding on work. Based on the article, there were key points of interest that may be of interest to identify, minimize, or avoid the practice of collusion.
Definition of collusion
The COSO/ACFE Fraud Risk Management Guide defines collusion as a secret agreement between two or more parties for fraud or deceit.
Common schemes of collusion
There are various ways to engage in collusion. The DOJ identified three common schemes of collusion. The most common schemes are price-fixing, bid-rigging, and…
