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Procurement Ethics. Presented by Greg Tolbert & James Gayton Location or Date. Agenda. Why Are We Here? Context The Battle Is Joined A Proposed Analytic Framework Lifecycle Procurement Ethics How Will They Know Takeaway Messages Additional Resources. Before We Get Started. Our Goals.
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Procurement Ethics Presented by Greg Tolbert & James Gayton Location or Date
Procurement Ethics Agenda • Why Are We Here? • Context • The Battle Is Joined • A Proposed Analytic Framework • Lifecycle Procurement Ethics • How Will They Know • Takeaway Messages • Additional Resources
Procurement Ethics Before We Get Started
Procurement Ethics Our Goals • Context • Issues & analytic framework • Tools
Contract Remedies Avoid PowerPoint Poisoning
Contract Remedies Stay Awake
Contract Remedies Remember to preface my personal ethics questions with “Say, I have a friend who …”
Procurement Ethics Stay Out of the Headlines
Procurement Ethics Stay Out of the Unemployment Line
Procurement Ethics Stay out of Court
Procurement Ethics Why Are We Here?
Procurement Ethics Disclaimer
Procurement Ethics Public Expectation
Procurement Ethics The Tension
Procurement Ethics Context The Development of Government Procurement
Procurement Ethics England – 1600’s • Class system • Political power held by wealthy landowners • Government Service is a path to wealth
Procurement Ethics Colonial America
Procurement Ethics American Revolution
Procurement Ethics Congressional Reform • Centralized Purchasing Authority • The Patriot Financier
Procurement Ethics War of 1812
Procurement Ethics 1850s
Procurement Ethics Civil War
Procurement Ethics “For sugar [the government] often got sand; for coffee, rye; for leather, something no better than brown paper; for sound horses and mules, spavined beasts and dying donkeys; and for serviceable muskets and pistols, the experimental failures of sanguine inventors.” – Harper’s Monthly Magazine (1864)
Procurement Ethics The Crédit Mobilier Scandal • Phony construction company owned by Union Pacific RR stockholders • Hired Credit Mobilier to build the transcontinental railroad • Charged U.S. government twice the actual cost • Bribed Congress to stop investigation
Procurement Ethics Whiskey Ring Scandal
Procurement Ethics Teapot Dome • Bribery scandal • U.S. government oil lease • No-bid contracts • Very favorable lease terms
Procurement Ethics Abscam • FBI sting operation • Targeted political corruption • 7 Members of Congress convicted
Procurement Ethics Operation Double Steel • Undercover FBI operation • Offered bribes and kickbacks to government officials involved in purchasing materials and equipment • 58 arrests
Procurement Ethics Military Contracts • Air Force Lease of Boeing KC-767 tankers • Lease more expensive than purchase • Price inflated to favor future employer
Procurement Ethics Duke Cunningham • Member of Congress (CA) • Bribery – accepted $2.4 million • Prison
Procurement Ethics 21st Century Contracts Managers • Kerry Khan • Program manager • Bribes & kickbacks • Over $30 million • Plead guilty • Bribery • Bid-rigging • Consequences • Prison (19 years) • Restitution ($32.5 million)
Procurement Ethics 2015
Procurement Ethics Where are We Today? • Public corruption exists • Costs taxpayers • Diverts resources
Procurement Ethics The Battle is Joined
Procurement Ethics Selected United States Federal Laws
Procurement Ethics United States • Conflict of Interests Law,18 U.S.C. §208 • Bribery18 U.S.C. §201 • Unauthorized Compensation18 U.S.C. §203 • Post-Employment Restrictions 18 U.S.C. §207 • Voiding Transactions 18 U.S.C. §218
Procurement Ethics Key State Laws Procurement Ethics
Procurement Ethics Washington Statutes • Procurement Reform • RCW chap. 39.26 • Ethics in Public Service Act • RCW chap. 42.52 • Local Government Ethics - Contracts • RCW chap. 42.23 • Public Records Act • RCW chap. 42.56
Procurement Ethics Procurement Reform • RCW Chap. 39.26 • Regulates procurement of goods & services • Key provisions • RCW 39.26.020 • RCW 39.26.030 • RCW 39.26.040