How strong forensic data analytics capabilities allow companies and contract owners to catch bidding fraud.
Contract owners have been fighting bid rigging, collusion and other fraudulent activities for some time. Recently, contract owners have started using advanced forensic data and analytics (FDA) to turn the tide.
There are many methods to detect fraud through FDA, but ultimately it comes down to using FDA tools to pinpoint potential fraud or irregularities within large amounts of data. With strong FDA tools and methods such as Benford’s Law, auditors can dig deep into datasets to find patterns in specific years, through specific types of contracts, or even among specific bidders.
Accurately value damages
Insights gathered from FDA are critical in helping contract owners see what kind of contracts are more susceptible to fraud than others. It can also help quantify damages from collusion, and allow contract owners to arrive at a more exact value of possible damages, which could then be used to negotiate higher repayment amounts.
What should companies do to facilitate fraud detection?
Naturally, it requires good data for FDA to be effective. For instance, it can be a challenge to find companies who keep enough records of both winning and losing bids to provide the kind of robust datasets needed for fraud detection. The need to maintain records and install methods of collecting that data is even more important than ever. After all, you can’t analyze what you don’t have.
Moving forward, we can expect to see FDA capabilities going even further, providing more statistical analysis rather than pure data analysis and running correlations and regressions to find outliers.
Find out more about FDA techniques in tackling bidding fraud in our article and contact us to discuss how we can assist you in your fight against fraud.