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Procurement Guide |
Printable
Guide |
| This guide is
designed to assist you in evaluating the procurement process to detect
violations of the law which harm the public procurement process. Preventing
fraud and corruption of the process essential. When violations of
the law cannot be prevented, it is essential to identify and prosecute
the violators to obtain redress and deter future violators. Your assistance
in bringing evidence of illegal conduct in public contracting to our
attention is essential to safeguarding the integrity of the government
purchasing process. |
What are the
relevant laws?
Legislation that
became effective April 17, 2000 included several important tools for
combating fraud and corruption in government contracting. First, the
criminal laws now specifically identify false claims and the making
misrepresentations in connection with a government contract a serious
crime. Second, the laws against bid rigging and collusion now carry
increased penalties. Third, the laws governing bribery, gratuities,
gifts and conflict of interest have been strengthened.
What do I look for?
Fraudulent and corrupt practices take a variety of forms and it is
not possible to describe all manifestations here. Nevertheless, the
following are examples of common practices which may be illegal. Some
violate the criminal law and some violate antitrust laws.
Misrepresentations
It is illegal for a vendor to intentionally misrepresent an important
fact in connection with a government contract. The misrepresentation
need not be in writing and need not be in a certification. Any material
misrepresentation will violate the law. Moreover, it is illegal to
make such a misrepresentation during any part of the negotiation,
bid, award or administration of the contract. False
Claims
It is illegal for a vendor to knowingly make a false claim for payment
in connection with a government contract.
Price Fixing
Competitors may not agree to raise, stabilize or otherwise affect
the prices at which they will sell goods or services. Such agreements
are illegal whether or not they set specific prices - any agreement
among competitors affecting price levels is illegal.
Vertical Price Fixing
An agreement between a seller of a product and the buyer as to what
price the buyer will resell the product is illegal.
Bid-rigging
Competitors may not agree in any way to affect the outcome of a competitive
bid process. They may not agree who will win the bid, what bids each
will submit, that a bidder will not submit a bid or to rotate who
will win particular contracts.
Bribery
A vendor may not offer or give any benefit to a public official in
exchange for an official act or an act that violates the public official’s
duty. Similarly, a public official may not solicit or take any benefit
from vendor in exchange for an official act or a violation of his/her
duty. “Benefit” includes anything regarded by the recipient
as a gain or advantage to him/herself or to a person or entity in
whose welfare he/she is interested.
Gratuity
A vendor may not offer or give any benefit to a public official because
of official acts by the public official or because the public official
properly or improperly assisted the vendor. Similarly, a public official
may not solicit or take such benefits.
Gifts
A public official may not solicit or take any benefit from a vendor
that is not permitted by law. In other words, a public official should
be sure that there is legal authority to accept any benefit from a
vendor or potential vendor.
Conflict of Interest
A public official may not transact business on behalf of the government
with any business in which the official or any member of his/her family
has financial interest. Further, a public official may not receive
any benefit directly or indirectly from any contract for goods or
services to be provided to the governmental entity where he/she works.
What can you do?
It is important that contracting officials and vendors be vigilant
to detect potential violation of law which corrupt or derail the competitive
bid and normal procurement process. If you have reason to believe
a violation of law has occurred, contact the Division Criminal Justice,
Financial Crimes Bureau, Antitrust/Procurement Fraud Unit.
The Division of Criminal Justice
Financial Crimes Bureau, Antitrust/Procurement Fraud Unit was established
to combat fraud and corrupt practices government procurement. The
Division investigates violations of the law and pursues criminal and
civil remedies to punish and deter illegal conduct and obtain restitution
and damages when appropiate. To
report a possible violation contact:
Division of Criminal Justice-Financial Crimes Bureau
Antitrust/Procurement Fraud Unit
25 Market Street P.O. Box 085
Trenton, NJ 07628
(609) 292-2848
Additional information may be obtained at:
www.njdcj.org |
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