Vietnam

VN-Project Preparation Technical Assistance Facility Project
 Second Ho Chi Minh City Environmental Sanitation 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.




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Background

In July 2010, the Socialist Republic of Vietnam and the International Development
Association (“IDA”) signed a Credit Agreement for the VN-Project Preparation Technical
Assistance Facility Project (the “PPTAF Project”). The PPTAF Project sought to increase
the government agencies’ capacity to plan and prepare public investments efficiently. The
PPTAF Project began in October 2010 and closed in December 2015.

In 2012, funds from the PPTAF Project were assigned for the preparation of the Second
Ho Chi Minh City Environmental Sanitation Project (the “HCMC Project”). In 2013, the
HCMC Project’s implementing agency (the “PIA”) solicited Expressions of Interest
(“EOI”) for a contract (the “Contract”), which included a responsibility to help prepare
bidding requirements for later HCMC Project contracts. Company X submitted its EOI for
the Contract and, subsequently, submitted its Technical Proposal and Financial Proposal.

The PIA informed the World Bank that it had noted an arithmetical error while reviewing
Company X’s Financial Proposal. According to the PIA, Company X had mistakenly
quoted a price of approximately euros (“EUR”) 700,000 when the actual sum of costs was
EUR 100,000 cheaper. After the downward correction, Company X received the highest
evaluation score and was recommended for Contract award. Subsquently, in response to
the World Bank’s request, the PIA sent to the World Bank the Company X Financial
Proposal showing the arithmetical error.

Allegations & Methodology

The World Bank undertook a mission to Ho Chi Minh City to discuss the proposed Contract
award to Company X. During the mission, the World Bank found two different versions
of Company X’s Financial Proposal: one with costs that, in fact, did add up to the
purportedly mistaken sum and another with a sum EUR 100,000 cheaper. This matter was
referred to the World Bank Group’s Integrity Vice Presidency (“INT”).

INT’s investigation consisted of, among other things, a review of project documents as
well as documents and statements obtained from the PIA, Company X, and two other
subjects of INT’s investigation: Company A and its affiliate, Company B.

Findings

   1. Evidence indicates that Company X entered into an improper arrangement with
      Company A and Company B to include false prior experience information in
      Company X’s EOI and Technical Proposal for the Contract.

Evidence indicates that, during the EOI stage for the Contract, Company X learned from
the General Director of Company B (“General Director B”) that Company X did not meet
the qualifications set by the PIA.

Evidence indicates that Company X, Company A, and Company B decided to misrepresent
Company X’s past experience during the EOI stage and again in Company X Techincal
Proposal by enabling Company X to claim credit for Company A’s projects.


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Evidence indicates that, pursuant to the arrangement, Company A agreed to provide
Company X with at least six false project references in relation to works where Company
A purportedly hired Company X as subcontractor. Evidence indicates that neither
Company X nor Company X employees were involved in the subcontracts.

Evidence indicates that Company X included the false project references in its EOI and
Technical Proposal and obtained false certifications from Company A in case the PIA
required supporting documentation. Evidence indicates that Company B worked closely
with Company X to create, compile, and submit documents containing these
misrepresentations to the PIA.

Evidence indicates that as part of the agreement, once Company X was awarded the
Contract, it would prepare bidding requirements for subsequent HCMC Project contracts
with specifications tailored to benefit Company A and Company B.

   2. Evidence indicates that Company X, through General Director B’s assistance,
      replaced its already-submitted Financial Proposal with a new Financial Proposal
      with a lower price quote in order to be awarded the Contract.

Evidence indicates that, after the opening of the financial proposals for the Contract and
before the completion of the consultant evaluation report, General Director B informed
Company X that it would not be awarded the Contract with the submitted price of
approximately EUR 700,000. Evidence indicates that General Director B then suggested
that Company X produce an amended Financial Proposal, lowering the price by EUR
100,000, which he would then insert into the PIA’s records.

Evidence further indicates that Company X and General Director B agreed to create a new
version of the Financial Proposal that listed one cost category EUR 100,000 lower than in
the original submission. Evidence indicates that General Director B replaced Company
X’s already-submitted Financial Proposal with this altered one. Ultimately, evidence
indicates that the altered Financial Proposal with the lower price quote enabled the
evaluation committee to recommend that Company X be awarded the Contract.

Corrective Actions

The World Bank imposed the administrative sanction of debarment with conditional
release on General Director B, Company A, Company B, and Company X. These
ineligibilities extend to any entity that is directly or indirectly controlled by the sanctioned
individual and companies.




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