Thursday, January 31, 2013

Possible Patronage in Bid-Rigging

One USAID official is on his way out the door and another is alleged to collude with him on a contract for services that was "wired" for him to win the contract. The US News story from the AP deals mostly about legal wrangling over whether the DOJ has jurisdiction to investigate but the chief allegation is:
In an inspector general's "memorandum of interview" last June, investigators described their probe into allegations that "Lisa Gomer, general counsel for USAID colluded with David Ostermeyer, chief financial officer for USAID, by working with him to write a scope of work for a personal service contract ... in the Office of General Counsel." 
"Gomer planned to select Ostermeyer for the position," the memo said.

Governments are often the victim of bid-rigging in auctions because managers face few consequences for possible under-performance by the contractor.

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