In 2017, the OIG received a whistle-blower report alleging tender manipulation by the Principal Recipient of a Global Fund-financed malaria grant. A few days before the tender closing date, the report alleged, three employees from the Principal Recipient had proposed a kickback scheme to the regional sub-recipient in charge of the procurement. They suggested manipulating the tender conditions to favor a particular transport supplier. In return, the supplier would pay a 20% kickback on the value of the contract. The kickback would be financed by inflating the prices for the transportation of the goods and would be shared between the three employees and the local procuring sub-recipient.
However, the sub-recipient refused to facilitate the scheme and as a result disrupted the potential collusion. Instead, the sub-recipient selected a transportation supplier based on expertise and price, following the proper procedures. The OIG found that the final prices paid for the contract were within market prices and had not been artificially inflated to pay for kickbacks.
Furthermore, the transport supplier that had been solicited by the Principal Recipient employees refused to collude and enter into the tender manipulation.
As a result of the investigation, the OIG and the Secretariat Country Team worked closed together to mitigate the risk of such a scheme happening again. All transport contracts are now centralized under one single service provider procured through an international tender. The Country Team has also mandated the Local Fund Agent to carry out post-tender checks on high risk tenders and procurements.
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