LEGAL AND ETHICAL ASPECTS OF GLOBAL BUSINESS

Scenario 3 Analysis
Bribe solicitation for confidential
information during pre-bidding or
bidding stage

Submitted By: Ravishekhar Kumar

ID: 20142144

Jindal Global Business School

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Corporate MBA-I

General Provision for the Bidding (Required to do analysis

of Scenario:3):
(a) bid means a tender, or an offer, in response to an invitation,
by a person, consultant, firm, company or an organization
expressing his or its willingness to undertake a specified task at a
price;
(b) bidder means a person who submits a bid;
(c) competitive bidding means a procedure leading to the award
of a contract whereby all the interested persons, firms, companies
or organizations may bid for the contract and includes both
national competitive bidding and international competitive bidding;
(d) contractor means a person, consultant, firm, company or an
organization who undertakes to supply goods, services or works;
(e) contract means an agreement enforceable by law;
(f) corrupt and fraudulent practices includes the offering, giving,
receiving, or soliciting of any thing of value to influence the action
of a public official or the supplier or contractor in the procurement
process or in contract execution to the detriment of the procuring
agencies; or misrepresentation of facts in order to influence a
procurement process or the execution of a contract, collusive
practices among bidders (prior to or after bid submission) designed
to establish bid prices at artificial, non-competitive levels and to
deprive the procuring agencies of the benefits of free and open
competition and any request for, or solicitation of anything of value
by any public official in the course of the exercise of his duty;
(h) lowest evaluated bid means,(i) a bid most closely conforming to evaluation criteria and other
conditions specified in the bidding document; and
(ii) having lowest evaluated cost;
(i) Ordinance

means

the

Public
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Procurement

Regulatory

Authority Ordinance, 2002 (XXII of 2002);

(j) repeat orders means procurement of the same commodity
from the same source without competition and includes
enhancement of contracts;
(k) supplier means a person, consultant, firm, company or an
organization who undertakes to supply goods, services or works;
and
(l) value for money means best returns for each rupee spent in
terms of quality, timeliness, reliability, after sales service, up-grade
ability, price, source, and the combination of whole-life cost and
quality to meet the procuring agencys requirements.
(2) The expressions used but not defined in these rules shall have
the same meanings as are assigned to them in the Ordinance
Specifications.- Specifications shall
allow the widest
possible competition and shall not favour any single
contractor or supplier nor put others at a disadvantage.
Specifications shall be generic and shall not include references to
brand names, model numbers, catalogue numbers or similar
classifications. However if the procuring agency is convinced that
the use of or a reference to a brand name or a catalogue number is
essential to complete an otherwise incomplete specification, such
use or reference shall be qualified with the words or equivalent.
*It shall be mandatory for all procuring agencies to advertise all
procurement requirements exceeding prescribed financial limit
which is applicable under sub-clause (i) of clause (b) of rule
42. However under following circumstances deviation from the
requirement is permissible with the prior approval of the Authority,(a)
the proposed procurement is related to national security
and its publication could jeopardize national security objectives;
and
(b) The

proposed

procurement
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advertisement

or

notice

or

publication of it, in any manner, relates to disclosure of

information, which is proprietary in nature or falls within the
definition of intellectual property which is available from a single
source.
REDRESSAL OF GRIEVANCES AND SETTLEMENT OF DISPUTES
3. Redressal of grievances by the procuring agency.(1) The procuring agency shall constitute a committee comprising
of odd number of persons, with proper powers and authorizations,
to address the complaints of bidders that may occur prior to the
entry into force of the procurement contract.
(2) Any bidder feeling aggrieved by any act of the procuring
agency after the submission of his bid may lodge a written
complaint concerning his grievances not later than fifteen days
after the announcement of the bid evaluation report under rule
35.
(3) The committee shall investigate and decide upon the complaint
within fifteen days of the receipt of the complaint.
(4) Mere fact of lodging of a complaint shall not warrant suspension
of the procurement process.
(5) Any bidder not satisfied with the decision of the committee of
the procuring agency may lodge an appeal in the relevant court of
jurisdiction.
4. Arbitration.- (1) After coming into force of the procurement
contracts, disputes between the parties to the contract shall be
settled by arbitration.
(2) The procuring agencies shall provide for a method of arbitration
in the procurement contract.
5.Overriding effect.- The provisions of these rules shall have
effect notwithstanding anything to the contrary contained in any
other rules concerning public procurements:Provided that the
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prevailing rules and procedures will remain applicable only for the
procurement of goods, services and works for which notice for
invitation of bids had been issued prior to the commencement of
these rules unless the procuring agency deems it appropriate to reissue the notice for the said procurement after commencement of
these rules.
Scenario:3: A consultant who is involved in bidding
process for allocation of government demand of material
for erection of railway line in Tamilnadu approaches me to
disclose the important detail regarding bidding process
and other competitors details.
Scenario:
There is huge order created by government of Tamilnadu for
laying of railway line,for which government need to purchase
121m long railway line of 200 metric ton in FEB-2015.My
company cast these line and need this order to complete the
annual sales target of 2014-2015.Bidding process is about to start
and a consultant involved in financial analysis of project with
these bidding process approached me by promising that he will
give all necessary data and bidding target of competitors and
government range of giving the order. By which our company will
win the order easily.
Hence As a representative of company xxx how should I
react and what should I do? What practices should our
company follow to minimize the chance of such cases?
Some useful facts:
High risk business sectors (Transparency International
Bribe Payers Index 2011)
Public works contracts & construction , Average CPI
score is 5.3 out of 10
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Immediate Actions Taken

Step:1 (Immediate Action)
Firstly, I will try to explain him about my companys quality
stringent policies. Refuse payment on the grounds that any
solicitation violates the business principles of my company
and may violate applicable laws such as those covering
accounting and/or anti-corruption in my country and/ or the
host country, and money laundering, and could lead to the
dismissal and criminal prosecution not only of the employees
concerned but also of the soliciting party
Step :2 (Report internally)
I will take time to think about the situation, dont act alone
I will refuse payment and will ask him to give in writing.
I will record the conversation between the executive at the
consultant end & me.
Immediately went to my senior and I will play it in front of
him.
Step:3 (Investigate)
Investigate the tendering process and working of consultant
as well as past detail of consultant with the help of other
Agencies like NGOs.
Include legal, operational and risk management specialists.
Possibility: 2
Still above steps may not be useful because I think it might be
possible if this consultant go and meet with the other party and if
other party accepts the proposal of corrupt consultant than this
will effect the bidding and I will lose the tender/order.
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Action:
Initiation of collecting action to improve overall business
integrity:
Disclose it to the competitors that you have approached with
confidential information and suggest jointly approaching
bidding agency with an NGO or committee framed to look
after the bidding disputes and corruption if nay for increased
scrutiny of the bidding process.
If
the suspicions
externally:

are

substantiated:

Disclose

Use various governmental agencies to report corrupt

practices.
In case of international business ,disclose the matter to
Embassy and consulate representation our home country to
seek guidance and support.
Industry trade associations to report on a no name basis
and in collective manner such solicitation to relevant
authorities.
Media/NGOs
Withdraw:
Withdraw from project or bidding process and disclose
the reason for the withdrawal to the public and official
organizing the tender.
Demand Prevention: How to reduce the possibility of
demand made under above circumstances?
General Company anti-corruption policies:

 Implement zero tolerance anti bribery policies based on

applicable laws and ethical values.
Policies should be available to all employee, business
partner, relevant government agencies, charities, labor
union and stakeholders.
Implement whistle blowing policies.
Provide training to all employee directly exposed to bidding
process and high value turnover between company and
other cooperates and government agencies. Training like
alert process, to whom to report.
Emphasize on criminal and reputation risk not only for
company but also for employee exposed to such activities.
Send regular reminder communication to exposed employee.
Provide competitive remuneration for company staff at risk
to reduce incentive to solicit and accept kickback.
Introduce anticorruption clauses and audit rights in contract
with business partner like contractors, suppliers etc.
Conclusion:
It is concluded from the above analysis of scenario that under
condition of Bribe solicitation for confidential information during
pre-bidding or bidding stage it is necessary to inform the
situation to the concerned management of the company rather
than dealing the situation individually. Collection of evidence is
also important .and it play important role during investigation by
external authority.
Companies must focus on best practices and guidelines provided
by chamber of commerce and different agencies like OECD
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dealing with anticorruption, under different condition of bribe and

solicitation.