I shared how I discovered this alleged bid-rigging case earlier in my post. As the Competition and Consumer Commission of Singapore has issued their proposed infringement decision regarding the case, I will refer to the case as “alleged” until the finalized infringement decision is issued by the CCCS.
The reality is that I managed to detect the case by a combination of luck and prior exposure to bid-rigging cases years ago in my 29 years experience spanning internal audit, IT audit, cybersecurity and charity governance.
I had just been transferred to a cybersecurity role back in late 2022. As part of my role, I was the first level quotation approving officer for a quotation for Vulnerability Management Software Licence for my organization. As I was reviewing the documents supporting the award to the lowest price vendor, I realized something quite peculiar about the pricing for the quotation. In the public sector, quotations were called for estimated procurement value of goods and services that ranged from SGD 6,000 to SGD 90,000.
I was the Director of Internal Auditor for a decade and when I reviewed the quotation, my internal audit instincts took over naturally. The first thing to strike me was that the prices of by the three quoted vendors were fairly close. They were $63,000 for the lowest quote, followed by $68,888 for the second lowest and $69,000 for the highest.
$68,888.
That was the trigger that set into motion the chain of events that led to the proposed infringement decision by the CCCS pursuant to the Competition Act 2004. The thing that struck me was the number – $68,888.
For those who are of Chinese ethnicity, you know that the number “8” is an auspicious number, in that in the cantonese dialect, “8” sounds like “fatt” or prosperity. That made me very curious because it did not gel with my understanding of the situation. The vendors for this quotation were re-sellers of the software which was by an overseas principal. As the principal was not asian, I did not expect the number 8 to feature in the pricing. Using 8 type of figure is a very asian or Chinese cultural flavour, more likely in quotations bidded by Chinese owners of businesses or companies for more traditional industries such as construction, printing and other small and medium enterprise type of business.’
I rationalized that if the re-seller were to apply a mark-up to the price provided by the product principal, then the probability of having $68,888 would be fairly remote. A number like $68,888 is a very deliberate decision by the vendor.
The next issue that struck me was that the second highest and highest prices were very close. $68,888 and $69,000 were very close. $69,000 was also a fairly rounded number. These signs triggered my auditor’s instinct because they appeared to be artificial and made-up. Fraud is the use of deception to achieve an advantage or economic gain. The artificial numbers made me suspect that there was potentially fraud at play here.
Initially, I thought it must have been a coincidence. But having recently achieved certifications in the Institute of Singapore Chartered Accountants (Financial Forensic Professional) and Certified Fraud Examiner (by the Association of Certified Fraud Examiners), I realized that as a professional, I needed to perform additional procedures if I came across evidence of possible fraud and could not disregard what was staring me in the face. At the same time, I felt that the vendor was challenging the system and me being part of the system to mitigate occupational fraud from happening under our noses.
I proceeded to do an FI@Gov check using their ACRA BizFile access to determine who were the officers, shareholders and directors of all three vendors who had bidded for the quotation.
Lo and behold, once the results from the FI@Gov check came back, I was looking the following information:
(1) The director and secretary of both QBTT Pte Ltd and Contabilita Pte Ltd were the same two individuals.
(2) The official address of QBTT and Contabilita were the same exact address which I later verified on Google Maps as appearing to be a residential unit.
The two pieces of information above strongly suggested that there appeared to some collusion going on as clearly the other two vendors in the quotation were the exact same individuals behind the two different companies.
Once I had established the above, I also went back to basic auditing skills 101 to review the entire set of quotation submissions by all three vendors. After scrutinizing all the documents very closely given the circumstances discovered, I further came across the following:
(3) The specification compliance form, which was a Word document that required vendors to indicate “Y”, “N” or “NA” to the table of compliance to the requirement specifications had one common pattern — all three were formatted using Wingdings for the tick sign. I double-checked that the original Word document uploaded into GeBIZ by our Finance and noted that it was not using Wingdings. This “smoking gun” made me come to the conclusion that this appeared to done by the vendor who seems to have deliberately formatted it using Wingdings.
Based on all the above, I wrote up the preliminary investigation report and advised the Finance colleagues to lodge the appropriate reports to CCCS. The rest is history as close to 1.5 years later, CCCS issued their proposed infringement decision based on their investigations.
What the CCCS was able to ascertain was the Rei Securite Pte. Ltd. appeared to be engaging in “… agreements and/or concerted practices” with the key person involved with QBTT and Contabilita. I had been unable to establish any link between Rei and QBTT or Contabilita when I encountered the case in late 2022.
As at today, CCCS has not updated their proposed infringement decision as yet so as at now these are still subject to the final decision by CCCS.
I still believe that when you are in roles that deal with governance, there is a certain degree of “righteousness” in the nature of work, in that we are trying to help mitigate fraud, wrong-doing and non-compliance for the betterment of organizations and society in general.
Again, the credit to how this case has developed goes to CCCS and their officers. I have only shone the light on irregularities that I could not help but flag out due to the blatant nature of the activity. I was able to do what I did because of what I learnt the various foundational skills from the Auditor-General’s Office, the Accountant-General’s Department and years as the Director of Internal Audit with the Ngee Ann Polytechnic.
What are some of the irregularities that you have detected in your own experiences?
Feel free to share in the comments section if you are able to.
P.S. (As at 5 Sep 2024, CCCS had fined the relevant parties for their involvement in this bid-rigging case. CNA just put out this report.)
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