Contract And Procurement Fraud Flashcards
Which of the following is NOT a common red flag of procurement fraud schemes involving collusion among contractors?
A. All contractors submit consistently high bids.
B. The same contractors bid on each project or product.
C. Bid prices decline when a new competitor enters the competition.
D. More competitors than usual submit bids on a project or product.
D. More competitors than usual submit bids on a project or product.
All the following activities are included in the presolicitation phase of procurements involving open and free competition among contractors EXCEPT:
A. The procuring entity develops the bid specifications.
B. The procuring entity issues the solicitation document.
C. The procuring entity identifies its needs.
D. The procuring entity determines the method for acquiring the goods or services.
B. The procuring entity issues the solicitation document.
Which of the following is NOT a common red flag of a bid tailoring scheme?
A. Competitive awards vary among several suppliers.
B. Only a few bidders respond to bid requests.
C. A contract is not rebid even though fewer than the minimum number of bids are received.
D. There are unusually broad specifications for the type of goods or services being procured.
A. Competitive awards vary among several suppliers.
Rowena, a Certified Fraud Examiner (CFE), is an auditor for the government’s Office of Audit and Evaluation. While conducting a routine audit of ten construction contracts from the Public Works Department, Rowena notices some unusual characteristics in the contracts’ bidding documents. The contracts were all awarded to the same contractor, and the specifications in all ten contracts had unreasonably narrow specifications for the types of goods being procured. Which of the following types of procurement fraud schemes is MOST LIKELY at issue here?
A. A procurement employee divided a large project into several small projects that fall below the mandatory bidding level.
B. A procurement employee has intentionally included unallowable costs in the projects’ contracts and budgets.
C. A procurement employee has drafted bid specifications in a way that gives an unfair advantage to a certain contractor.
D. A procurement employee convinced their employer that it needs excessive or unnecessary products or services.
C. A procurement employee has drafted bid specifications in a way that gives an unfair advantage to a certain contractor.
Which of the following is NOT an appropriate technique for detecting a nonconforming goods or services scheme?
A. Determining if the costs of the contract have exceeded or are expected to exceed the value of the contract
B. Interviewing procurement personnel about the presence of any red flags
C. Conducting unannounced inspections of questioned goods or materials
D. Reviewing the inspection and test reports of questioned goods or materials
A. Determining if the costs of the contract have exceeded or are expected to exceed the value of the contract
Which of the following is a red flag of a procurement fraud scheme in which vendors are colluding to evade the competitive bidding process?
A. The winning bidder subcontracts work to losing bidders
B. Qualified contractors do not submit bids
C. There is a pattern indicating that the last party to bid wins the contract
D. All of the above
D. All of the above
Which of the following is a way that dishonest contractors collude to evade the competitive bidding process?
A. Submit invoices for work that was not performed or materials that were not delivered.
B. Submit token bids that are not genuine attempts to win the contract.
C. Use obscure publications to publish bid solicitations.
D. Submit bids that are competitive in price.
B. Submit token bids that are not genuine attempts to win the contract.
Which of the following is an appropriate technique for detecting change order abuse?
A. Interviewing complaining contractors and unsuccessful bidders about the presence of red flags
B. Reviewing any change orders submitted by the contractor that add new items
C. Examining change orders that increase the scope or price of the existing contract
D. All of the above
D. All of the above
Which of the following statements about vendor management best practices is INCORRECT?
A. Vendors should be subject to a background check before they are added to the vendor master file.
B. Vendor master files should be kept current to reduce the risk of duplicate payments.
C. The procedures used to monitor vendors should address the red flags of vendor schemes that pose the greatest risk.
D. The person who maintains the vendor master file should have the authority to approve payments for invoices.
D. The person who maintains the vendor master file should have the authority to approve payments for invoices.
High percentages of returns, missing compliance certificates, and evidence of falsified test inspection results are red flags of which of the following procurement fraud scenarios?
A. Two or more competing contractors agreeing to refrain from bidding
B. A contractor delivering goods or services that do not conform to the contract specifications
C. A contractor charging the procuring entity for labor costs that are not permissible
D. A procuring employee manipulating the bidding process to benefit a favored contractor
B. A contractor delivering goods or services that do not conform to the contract specifications CORRECT
To prevent contract and procurement fraud, companies should implement a continuous monitoring program to monitor their procurement activities.
A. True
B. False
True
Which of the following is NOT an appropriate technique for detecting a cost mischarging scheme involving labor?
A. Comparing the direct and indirect labor account totals from the prior year to the current year
B. Reviewing the standard and actual labor rates to determine if there are any significant differences
C. Examining the total hours expended on the contract and comparing them to hours billed
D. Inspecting questioned goods or materials by examining packaging, appearance, and description
D. Inspecting questioned goods or materials by examining packaging, appearance, and description
Which of the following is NOT one of the key phases of procurement processes that employ competitive bidding mechanisms?
A. The presolicitation phase
B. The post-award and administration phase
C. The purchase and procurement phase
D. The solicitation phase
C. The purchase and procurement phase
The solicitation phase of procurements involving open and free competition among contractors includes which of the following activities?
A. The procuring entity performs its contractual obligations.
B. The procuring entity determines the method for acquiring the goods or services.
C. The procuring entity identifies its needs and develops the criteria used to award the contract.
D. The prospective contractors prepare and submit their bids.
D. The prospective contractors prepare and submit their bids.
An inaccurate vendor master file can result in greater risks of duplicate payments, unfavorable payment terms, and noncompliance regarding regulations.
A. True
B. False
True
