Mongolia

                            Governance Assistance Project &
Economic Capacity Building Technical Assistance Credit Project

                                             Redacted Report



                                                        July 2019
                            Statement of Use and Limitations

This Report was prepared by the World Bank Group (the “WBG”) Integrity Vice
Presidency (“INT”). It provides the findings of an INT administrative inquiry (the
“Investigation”) into allegations of corrupt, fraudulent, collusive, and/or coercive practices,
as defined by the WBG for purposes of its own policies, rules and procedures (the “WBG’s
Framework regarding Anti-corruption”), in relation to the WBG-supported activities. The
purpose of the Investigation was to allow the WBG to determine if the WBG’s Framework
regarding Anti-corruption has been violated.

This Report is being shared to ensure that its recipients are aware of the results of the INT
Investigation. However, in view of the specific and limited purpose of the Investigation
underlying this Report, this Report should not be used as the sole basis for initiating any
administrative, criminal, or civil proceedings. Moreover, this Report should not be cited
or otherwise referred to in the course of any investigation, in any investigation reports, or
in any administrative, civil, or criminal proceedings.

This Report is provided without prejudice to the privileges and immunities conferred on
the institutions comprising the WBG and their officers and employees by their respective
constituent documents and any other applicable sources of law. The WBG reserves the
right to invoke its privileges and immunities, including at any time during the course of an
investigation or a subsequent judicial, administrative or other proceeding pursued in
connection with this matter. The WBG’s privileges and immunities cannot be waived
without the prior express written authorization of the WBG.




                                              1
Background

In June 2006, the International Development Association (“IDA”) and the Government of
Mongolia (“GoM”) signed a Grant Agreement for the Governance Assistance Program
(“GAP”). The Project closed in December 2014.

GAP was designed to complement the work undertaken under the Economic Capacity
Building and Technical Assistance Credit Project (“ECTAC”) (collectively, GAP and
ECTAC are the “Projects”). GAP sought to assist the GoM in improving the efficiency
and effectiveness of governance processes in the management of its public finances;
promoting transparency and accountability in the performance of public sector functions;
and fostering the investment climate in Mongolia.

Mr/Ms. A had a consulting contract under the Project. Among his/her responsibilities,
Mr/Ms. A was charged with monitoring the bidding and selection processes of consultants
and contractors.

During the Projects, Mr/Ms. A monitored the evaluation and procurement process for a
contract under GAP (the “GAP Contract”), in which a company (“Company A”) was
recommended for award. In addition, Mr/Ms. A monitored the procurement and award of
a contract under ECTAC (the “ECTAC Contract”) to Company A.

Allegations and Methodology

INT received information that Mr/Ms. A’s adult child worked for Company A. Additional
information alleged that Mr/Ms. A had been working closely with Companies A and B
from Country X. In addition to reviewing Company A’s financial records, the findings of
this report are based on exchanges with both Company A and Mr/Ms. A.

Findings

       Evidence indicates that Mr/Ms. A solicited two GAP Contract bidders for a job
       for his/her adult child. Company A subsequently offered a job to and hired
       his/her adult child.

During bidding for the GAP Contract, Mr/Ms. A separately e-mailed Company A’s Vice
President of Operations and another bidder and asked the firms to consider his/her adult
child (“Mr/Ms. B”) for hiring. This was eight days after Company A and the other firm
submitted their bids for the GAP Contract during the second round of bidding.

Evidence indicates that this request resulted in Company A offering Mr/Ms. A’s adult
child, Mr/Ms. B, with a paid internship and thereafter an employment contract.
Subsequently, Company A hired Mr/Ms. B for a paid internship, and later for full-time
employment.

INT’s findings indicate that Company A extended its paid internship offer to Mr/Ms. B
three months after the evaluation committee had recommended the company for the GAP

                                           3
Contract 1 and just prior to the special procurement notice for ECTAC Contract being
advertised.

Evidence indicates that Mr/Ms. A actively participated in the evaluation of the bidding
process. His/Her responsibilities included, but were not limited to, answering questions for
bidders and receiving the bid submissions themselves. Shortly after Mr/Ms. B received a
full-time employment contract from Company A, the evaluation committee awarded the
ECTAC contract to Company A. Company A was the lowest evaluated bidder and
submitted the lowest read out price.

Corrective Actions

The World Bank imposed administrative sanction against both Company A and Mr/Ms. A.




1
    The Bank objected to award of the GAP Contract to Company A because Company A’s bid was non-
       compliant with the requirements. The GAP Contract was not awarded to Company A.

                                                  4