The Red Flag System as the Gatekeeper in Tender Fraud Prevention and Detection of Misrepresentation

Abstract

South African media publications frequently report on procurement fraud committed in Africa and South Africa--a matter which has evolved into a significant issue. Procurement fraud is committed in all the phases of the procurement cycle, but in this research, it is revealed that the unlawful act occurs mostly during the bidding or tender phase. Procurement fraud is not seen as a crime by business and this illicit act is thus committed because of ignorance in respect of the misrepresentation of information, and the red flag indicators of these misrepresentations. This article analyses the kinds of misrepresentation that takes place during the tender phase and highlights the importance of red flags in detecting procurement fraud, especially during the tender phase of the cycle. The identification of red flags was studied in order to comprehend the role that such identification plays in detecting and preventing procurement fraud in the tender phase. We also highlight the scope of the...