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Ethics. Charlene Lydick, C.P.M. Director of Procurement Operations University of Colorado. University of Colorado. Ethics – Where Do You Draw the Line?. There is nothing more important to the procurement professional than the subject of ethics and ethical behavior. Law vs. Ethics.
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Ethics Charlene Lydick, C.P.M.Director of Procurement OperationsUniversity of Colorado
Ethics – Where Do You Draw the Line? There is nothing more important to the procurement professional than the subject of ethics and ethical behavior.
Law vs. Ethics • Laws: rules of conduct or action prescribed or formally recognized as binding or enforced by a controlling authority. • Ethics: set of moral principles or values that define or direct us to the right choice. An action may be legal but unethical
Ethics in Procurement • Purchasers have a great deal of power • Opportunity to abuse that power • Purchasing decisions have a significant impact on others • Ethics is the fundamental building block of the procurement profession • Code of Ethics
Obligations of the Procurement Professional To Employer To Suppliers To Profession
Integrity of the Process “If this action is held up to public scrutiny, will I still feel that it is what I should have done, and how I should have done it?” - Harlan Cleveland, 1972
#1 What Message Are You Sending? You are conducting an RFP for marketing services for your school’s Communication Department. Marketing firms are a creative bunch and one of the seven responses you receive arrives in a leather messenger bag. The information tag is still on the bag and a quick internet search shows that value of the bag is approximately $275. What would you do?
#2 Helping a Small Business You’ve met with a local small business who is interested in doing business with your school. You’ve explained your school’s policies and procedures, the various types of solicitations, where open solicitations are posted, etc. ---- generally tried to help them get their foot in the door. You think this small business has potential and called them to let them know you published a solicitation you think they might be interested in. The owner calls you asking for advice. He’s never responded to a solicitation before and wants to be sure he is responding correctly. What would you do?
#3 Eagle . . . or Bogey A staff member in the IT department has been invited to play in a golf tournament at an upscale resort course as part of a conference he’ll be attending; lunch, dinner and drinks included. His fees will be paid by a software company. This will give him an opportunity to network and talk with the developers and engineers of a software product your school is interested in. The total value is approximately $500. He sees the value in the contacts. He calls you for your opinion. What would you do?
#4 Playoff Tickets … REALLY! As the result of a competitive solicitation, your school has an agreement with ABC Telecom as sole provider of telecommunication cables, supplies and services. It’s year two of a five year agreement. Telecom is your commodity and you work with Sally Smith, the sales rep, on a regular basis. Your hometown hockey team is in this year’s Stanley Cup playoffs. Sally Smith offers you two seats to a playoff game in ABC Telecom’s suite. Since ABC Telecom was awarded the agreement in a fair and open competitive process, accepting the tickets won’t influence your purchasing decisions. And you are a really big hockey fan and probably will never, ever have a chance for playoff tickets again. What would you do?
#5 Whaddaya see down there? A research lab wants to order a Virtual Scanning Electron Microscope. The PI tries to sole source it from the Super-Duper Microscope Company because he likes the machine and has received what he believes is a favorable quote from the sales rep, Sam Supernaw. Because of your professional experience and research, you know that there are other microscope companies who can provide the same type of instrument so you do a formal competitive solicitation.
#5 WhaddaYa See Down There? (continued) At 10 a.m. of the due date, you get a frantic call from Sam Supernaw. Super-Duper Microscope’s response was sent via overnight express service from company headquarters on the east coast; however, he just received notice that because of a major snow storm, the package won’t be delivered until the next day. Responses from five other companies are received prior to the 4 p.m. deadline, including a response sent from the east coast. Do you allow a late submittal? What would you do?
#6 Better Late Than Never? You are conducting an RFP for medical lab services for your school’s student health center. Included in the criteria are stringent technical requirements to provide lab results electronically within defined timeframes, electronic billing requirements, and the need to work with established student health insurance carriers. There are four known companies that have the potential to provide the services. Based on her research, including discussions with various medical lab service providers prior to initiation of the RFP, the medical director feels that Top Notch Techno Lab Services can probably best meet the needs of the student health center. She is, however, supportive of the RFP process and fully open to reviewing all responsive proposals.
#6 Better Late Than Never? (continued) Proposals are due at 3 pm. At 3 pm on the due date, you get a frantic phone call from the local sales rep stating that he is in the lobby of your building trying to deliver Top Notch Techno Lab Services’ proposal but that the elevator has him locked out and he can’t get to your office on the 5th floor. You’re surprised because the elevators do not require special access; however, you tell him you’ll meet him in the lobby. You immediately go to the lobby; he’s not there. You check all around inside and outside; no sign of him. You return to your office. He finally arrives at 3:25 pm stating that he had to move his car to a different parking space. Do you accept the proposal? What would you do?
#7 Thursday Night Football Your school’s football team will be playing a nationally televised home game which will provide good exposure for the school and team. The problem is it’s a Thursday night game, your team isn’t doing too well, and is not favored to win this game. Athletics is concerned about low ticket sales and that empty seats won’t look good on TV. They want to offer complimentary blocks of tickets to major suppliers in order to fill the seats. They contact you for your input. What would you do?
#8 How We Gonna Get There? One of your major suppliers is having a national customer informational event. This is a strategic supplier who has a contract with your school and has been a good partner. The event will include useful educational sessions as well as the opportunity to meet with manufacturer reps. Procurement professionals and end users from private industry, public entities (K12; cities; counties; states) as well as higher education are invited. It would be beneficial for your buyers and some end users to attend, however, travel budgets are tight. It is customary for this supplier to pay all or part of the expenses for major customers. Do you take advantage of this offer? What would you do?
#9 To Accept or Not To Accept A campus department employee answered an online customer satisfaction survey for a supplier which they use on a regular basis; usually for small dollar purchases (<$2,000). A week later he is notified that his name was chosen in a random drawing from all survey respondents and he won an iPad Mini. The department administrator calls you to find out if it’s ok for the employee to accept the iPad Mini. What would you do?
#10 Who’s Gonna Pay? You are close to completing a contract for student health insurance using a consortium agreement that was competitively solicited. The financial obligation includes a 2% fee to the consortium. A top administrator comes to you and says he has been talking directly to the health insurance company; they will offer your school the same deal available through the consortium thereby saving the 2% fee. Since the 2% would ultimately be paid by the students, this will be a savings for the students and they are already paying a lot for health insurance. What would you do?
