Case study: Investigating suspected fraud with opentender.net

In a previous post, we looked at Indonesia Corruption Watch’s method for monitoring corruption risks in procurement. Now let’s work through an example following their six step process.

An ICW investigation in 2021 revealed potential fraud risks in the construction of a faith-based community center in the province of South Sulawesi, with a contract value of about US$1 million (Rp. 19 billion). 

1. Identify procurement procedure 

The procurement package was selected based on the fiscal year and type of work. Based on a search on opentender.net, this community center development project in 2020 had a potential risk score of 75 out of 100. ICW also found several negative online news reports about the project.

Step 1A:

Step 1B:

Step 1C:

Step 1D: 

2. Review planning process

After establishing basic details about the project, ICW tracked down planning information known as the General Procurement Plan (RUP). However, the General Procurement Plan Information System or SIRUP did not mention the location, volume of work, description and specifications of the project. The only information that could be used for analysis was the contract implementation schedule which ended in December 2020.

Step 2A: 

Step 2B: 

3. Identify similar procurements 

Then, ICW searched for similar procurements in the local government’s e-procurement records, using a distinctive keyword from the procurement package project title. Their search of the e-procurement database brought up records related to the faith-based community center development project and construction work dating back to 2016. The budget tended to increase over time. In 2016, the local government issued a “continued construction” tender with an estimated price of Rp. 2.3 billion (roughly US$140,000). In 2018, there was another tender for Rp. 1.9 billion (US$115,000), then Rp. 6.5 billion (US$400,000) in 2019, and the budget tripled to Rp. 19.3 billion (US$1.2 million) in 2020.

Step 3:

4. Review company track record

They identified the name of the company that won the construction project in 2020. This company was likely to be a family-run business, because the president and commissioner both had the same address.

In addition, the company also worked on other government projects that faced controversy. In August 2021, a local news site reported that farmers in an area nearby could not use a local dam. According to local news reports, the irrigation and dam rehabilitation project was carried out by the same vendor in 2020 for a budget of Rp. 3.5 billion.

The company president’s name was mentioned in news reports about a public inquiry involving the provincial representative council, in which he was suspected of offering a fee to win a government project worth around Rp. 34 billion. The president was also once suspected of falsifying data regarding work experience. 

«And this is our suspicion that this person or his company has problems in carrying out projects. We can identify that the company’s management has a problematic track record,» said ICW Knowledge Management Division Coordinator Wana Alamsyah.

Step 4A:

Step 4B:

5. Review project implementation

ICW received information that the construction of the community center actually started in 2008. This project stopped in 2013, then continued again in 2016 with a budget of Rp. 2.3 billion (USD 140k). The contract signing was carried out in mid-2016. The assumption is that the work will begin in July or one month after the contract is signed.

From a search via Google Maps, ICW obtained a photo of the building’s structure taken in April 2016. Furthermore, in February 2018, there was a photo of a building frame with one dome that was not yet finished. If related to the 2016 project, it is suspected that the budget of Rp. 2.3 billion (USD 140k) was only to make one dome.

The center development project started again through a procurement package worth Rp. 1.9 billion (USD 116k) which was announced on June 28, 2018. The contract signing was carried out on June 25-30, 2018. In April 2019, ICW obtained photos, using Google Maps, showing one main dome and four smaller domes on the four sides of the building. Meanwhile, the building was only in the form of foundation pillars.

In 2019, the local government held a tender to continue the construction of the center with a budget of Rp. 6.5 billion (USD 400k). However, the budget was not enough to complete the work. ICW found video documentation on YouTube dated July 2020 showing that the center had begun to function, but there were several pillars of the building that were not yet finished.

On September 3 2020, the local government announced a procurement package worth Rp. 19.4 billion (USD 1.2M) to complete the construction of the center. The contract signing was carried out from October 3 to October 17, 2020. Meanwhile, the contract implementation schedule ended in December 2020. Based on this data, ICW believes that the construction of the center will not be completed on time. There are allegations that the project was made just to spend the budget.

Step 5A:

Step 5B: 

Step 5C:

Step 5D: (search for a follow up/continued project e.g. the following fiscal year)

Step 5E:

Step 5F: continue searching through online platforms on different dates, posts, showing the location of the project (e.g. online map, online streaming platform videos, etc)

From online map:

From Youtube:

6. Analysis 

Another clue that strengthens the alleged violation is the number of tender participants. There were 21 companies that registered, but only three companies submitted bids. Of the three companies, two of them did not submit an original bid guarantee, leaving one company to be determined as the winner.

The suspicion that the center development project was not completed on time was also proven. Based on a photo on Google Maps dated December 31, 2020, the construction process is still ongoing. It appears that the building has not been fully completed. Project boards and scaffolding are installed at the front of the structure. In addition, through its official website, the local government acknowledged the delay in completing the project. The construction of the center was only 75 percent finished in January 2021 and was targeted for completion in March 2021.

New advocacy strategy

After the investigation process, ICW submitted all evidence and recommendations to the LKPP on August 25, 2021. The LKPP reacted to the report by sending a letter to the relevant local government’s audit office on September 24, 2021 requesting a response and follow-up. After six months without a response, ICW then sent a letter to the local government audit office asking them to follow up on the complaint report.

A year later, the audit office had still not provided a response or explanation. According to Wana, the complex and time-consuming follow-up process could potentially indicate mismanagement or negligence. ICW then used a new strategy and reported the local government’s audit office for possible negligence to the Indonesian Ombudsman. At that time, the Indonesian Ombudsman already had a complaint channel related to mismanagement in procurement.

On March 7, 2023, the Ombudsman of the region sent a letter to ICW notifying them that an investigation had commenced. The letter also included a request to the local audit office for clarification or a written explanation.

Finally, on April 3, 2023, the audit office responded to ICW. The letter essentially said that the audit office had “clarified” the parties related to the construction of the community center. However, as of January 2025, ICW has not received an explanation or results of an audit in response to the allegations of potential fraud in the construction of the structure.Wana said the case showed how complicated the process of procurement monitoring was for civil society and the long, draw-out mechanism for reaching a resolution.

“It’s incredibly tiring. Especially when there is a security risk, the burden borne by the public in submitting complaints is very large.”