Exploring Irregularities in Brazilian Public Bids: An In-depth Analysis on Small Companies

Camila S. Braz; Marco Túlio Dutra; Gabriel P. Oliveira; Lucas G. L. Costa; Mariana O. Silva; Michele A. Brandão; Anisio Lacerda; Gisele L. Pappa

doi:10.5753/jis.2024.3836

Authors

Camila S. Braz Universidade Federal de Minas Gerais https://orcid.org/0000-0002-9238-5395
Marco Túlio Dutra Universidade Federal de Ouro Preto https://orcid.org/0009-0000-3865-5799
Gabriel P. Oliveira Universidade Federal de Minas Gerais https://orcid.org/0000-0002-7210-6408
Lucas G. L. Costa Universidade Federal de Minas Gerais https://orcid.org/0009-0002-8898-4237
Mariana O. Silva Universidade Federal de Minas Gerais https://orcid.org/0000-0003-0110-9924
Michele A. Brandão Instituto Federal de Minas Gerais https://orcid.org/0000-0001-7808-9357
Anisio Lacerda Universidade Federal de Minas Gerais https://orcid.org/0000-0002-2483-7572
Gisele L. Pappa Universidade Federal de Minas Gerais https://orcid.org/0000-0002-0349-4494

DOI:

https://doi.org/10.5753/jis.2024.3836

Keywords:

public bids, fraud detection, e-government, small businesses, network analysis

Abstract

In Brazil, bidding processes constitute the main method through which the Public Administration acquires goods and services, and they aim to select the best proposal between several bidding companies. Analyzing public bids can reveal several negotiating characteristics between companies and the public sector, including alerts of fraudulent activities involving such businesses. This article presents two approaches for detecting irregularities within small companies using data extracted from public bids in the Brazilian state of Minas Gerais. For each approach, we perform exploratory and geospatial analysis to better understand specific characteristics of the companies with irregularity alerts. Furthermore, we execute a network analysis to examine the underlying connections between such companies. Our findings reveal the efficacy of both approaches in indicating small companies that may be involved in fraudulent activities. Our methodology and results represent a significant advance for the public sector as they have the potential to enhance mechanisms for overseeing and preventing fraud within bidding processes.

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