7. Conclusion
Fraudulent overpricing in infrastructure projects is common in Brazil and is also globally a ubiquitous problem. Its determination in Brazil has been based upon the utilization of a deterministic approach, which has sometimes been ineffective in proving beyond reasonable doubt that overpricing has occurred. Consequently, it has been difficult for Judges to apply criminal convictions for this practice. To address this pervasive problem a new probabilistic method for determining overpricing is presented. The new approach enables forensic experts to establish the probability of overpricing occurring in accordance with the variability that exists for quantities and the unit prices resources needed to construct a project. Once it is adopted, the budget for public works will no longer be represented by a fixed value, but by a range of possible values associated with certain level of confidence. The reliability of the method is assured by the LLN principle and depends on data on quantities and unit prices. In Brazil, the data on unit prices are monthly surveyed by IBGE, and the data on quantities are currently being surveyed in the review process of an important official database, the SINAPI. Once this data available, the decisions on infrastructure projects’ prices can be made probabilistically, instead of deterministically. A major limitation of the proposed method is its dependence upon the use of reliable empirical data that has been collated in standardized format; this may not be available in many other countries. In this case of Brail, SINAPI forms part of its legislative framework but in other jurisdictions such databases of this nature may have an innate bias and be subjective due to their lack of standardization rendering the proposed method to be obsolete.
