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Unit 9, Assignment 2 - Competitive Commercial Activities in Engineering (P3, P4, P5)
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Unit 9 Competitive Commercial Activities in Engineering Assignment 2For this second assignment, I will begin by describing how an engineering organisation carries out
tendering & contracting.
Tendering is one of the main ways for obtaining work in the engineering sector. Any tender
organised by a business organisation to supply goods & services might become a firm
commercial commitment & thus, must be seen as an indicator of the organisation’s
capability. Contracting is essentially an agreement that’s between the buyer & another party.
On the right is a diagram that shows the step
by step tendering process.
In my first case study, I have found that the
European Commission enforced a total fine of
€131 million on 5 groups, known as:
- Bridgestone
- Dunlop Oil & Marine/Continental
- Trelleborg
- Parker ITR
- Manuli
These groups got charged due to the fact that
they participated in a cartel for marine hoses
for 21 years. The cartel members fixed prices
for marine hoses, allocated bids & markets &
exchanged sensitive market information.
“The firms regularly met to fix prices and
exchange sensitive market information. Cartel
members referred to some markets as their
"private markets" and agreed upon a dozen or so pages of detailed "cartel rules" to limit their
conduct on the market.” What this meant was that no matter which company the consumers went
to in order to purchase marine hoses, the price would have been the same (no competition between
those 5 companies (cartel fraud)).
My second case study, I overcame Malaysian businessman (Leonard Francis) who pleaded guilty in
the late months of 2014 to fraud charges where he admitted to bribing the US Navy officers with
money, prostitutes, Cuban cigars & Kobe beef.
“This was a decade-long scheme involving tens of millions of dollars in bribes to win hundreds of
millions in business and over-payments. The Navy officers were paid in return for favouring GDMA as
a supplier of “husbanding agent” services. That involves a range of tasks for ships visiting ports,
including arranging for pilots and tugs; customs and catering; dock security; taxis; and food, fuel and
supplies. Three U.S> Navy Rear Admirals have been censured and there is likely to be further action
against various US naval officers”
The procedure for this fraud involved a several tools; GDMA (Glenn Defence Marine Asia)
destabilised their rivals in bidding processes to win the contracts, which was helped by a few insiders
that would say positive things on Francis’ behalf. However, the Navy should have questioned
whether the bids were realistic as they were very low as this is the first point to note for normally
winning practitioners. Once the contracts were won, more ships were directed to ports where
Francis’ company worked by the Navy officers involved, which allowed him to submit fake invoices
P3 Fahim Mohammed
, Unit 9 Competitive Commercial Activities in Engineering Assignment 2
(these invoices were most likely paid either without real checking of the detail, or through approvals
from those on the inside of the fraud).
P3 Fahim Mohammed
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