Serge Gwabene
On the one hand kickback is a term used to refer to a misappropriation of funds that enriches a person of power or influence who uses the power or influence to make a different individual, organization, or company richer. Often, kickbacks result from a corrupt bidding scheme. Through corrupt bidding, the official can award the contract to a company, even though the company did not place the lowest bid. The company profits by having been awarded the bid and getting to perform the contract. In exchange for this corrupt practice, the company pays the official a portion of the profits. This portion is the kickback (Cornell,2021).
On the other hand, bid rigging is a form of collusion in which bidders on a contract decide who should be successful in the tender, and then draft their bids accordingly. Bid rigging is a form of market manipulation and can have significant antitrust implications. Whenever business contracts are awarded by means of soliciting competitive bids, coordination among bidders undermines the bidding process and can be illegal. Other bid-rigging agreements involve subcontracting part of the main contract to the losing bidders or forming a joint venture to submit a single bid (FTC,2021).
I Read a recent Article about Ex- Department of Education that faces federal charges on bribery which involves Kickback's and bid rigging in the State of Mississippi. The schemes operated by bid-rigging, false quotes, and altered purchase orders, to make money and profit by defrauding the Mississippi Department of Education into awarding contracts and purchase orders at inflated prices, directed to conspirators and their businesses.
There could have been several measures to prevent and deter the Fraud. Firstly, they should have ensured a diverse bidding pool that include a diverse pool of bidders. Furthermore, they should have avoided splitting contracts among multiple bidders as well as asking questions when bids do not make sense or deviate from others, they should have conducted a meticulous due diligence, exercise contract audit rights on the winning bidder. Also, they should have had procedures in place that advertise adequately the request for bids proposals. In addition to that they should have conducted an audit of the procurement documentation to spot any red flags
An accounting ERP could not have prevented the Fraud because firstly a lack of Internal and external control and Audit make it harder to detect such Fraud. In addition, the ERP is controlled by the same people who are trying to perpetuate the Fraud.
References
https://www.law.cornell.edu/wex/kickbacks
https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/dealings- competitors/bid-rigging
https://www.wtok.com/2020/09/03/ex-head-of-dept-of-education-faces-federal-charges-for- bribery-wire-fraud/