Presented by Greg Tolbert amp 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 ID: 619007
Download Presentation The PPT/PDF document "Procurement Ethics" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
Procurement Ethics
Presented by Greg Tolbert & James
Gayton
Location or DateSlide2
AgendaWhy Are We Here?Context
The Battle Is Joined
A Proposed Analytic Framework
Lifecycle Procurement EthicsHow Will They KnowTakeaway MessagesAdditional Resources
2
Procurement EthicsSlide3
Before We Get Started
3
Procurement EthicsSlide4
Our GoalsContextIssues & analytic framework
Tools
Procurement Ethics
4Slide5
Procurement Ethics5Slide6
Avoid PowerPoint PoisoningContract Remedies
6Slide7
Contract Remedies7Slide8
Stay AwakeContract Remedies
8Slide9
Remember to preface my personal ethics questions with “Say, I have a friend who …”
Contract Remedies
9Slide10
Stay Out of the HeadlinesProcurement Ethics
10Slide11
Procurement Ethics11Slide12
Procurement Ethics12Slide13
Stay Out of the Unemployment LineProcurement Ethics
13Slide14
Stay out of CourtProcurement Ethics
14Slide15
Contract Remedies
15Slide16
Why Are We Here?Procurement Ethics
16Slide17
Disclaimer
Procurement Ethics
17Slide18
Public Expectation
Procurement Ethics
18Slide19
The TensionProcurement Ethics
19Slide20
ContextThe Development of Government Procurement
20
Procurement EthicsSlide21
England – 1600’sClass systemPolitical power held by wealthy landowners
Government Service is a path to wealth
Procurement Ethics
21Slide22
Colonial America
Procurement Ethics
22Slide23
American Revolution
Procurement Ethics
23Slide24
Procurement Ethics24Slide25
Congressional ReformCentralized Purchasing AuthorityThe Patriot Financier
Procurement Ethics
25Slide26
War of 1812
Procurement Ethics
26Slide27
1850s
Procurement Ethics
27Slide28
Civil War
Procurement Ethics
28Slide29
Procurement Ethics
29Slide30
“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
30Slide31
The Crédit Mobilier Scandal
Procurement Ethics
31
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 investigationSlide32
Procurement Ethics32Slide33
Whiskey Ring Scandal
Procurement Ethics
33Slide34
Teapot DomeBribery scandalU.S. government oil lease
No-bid contracts
Very favorable lease terms
Procurement Ethics
34Slide35
AbscamFBI sting operationTargeted political corruption
7 Members of Congress convicted
Procurement Ethics
35Slide36
Operation Double SteelUndercover FBI operationOffered bribes and kickbacks to government officials involved in purchasing materials and equipment
58 arrests
Procurement Ethics
36Slide37
Military ContractsAir Force Lease of Boeing KC-767 tankersLease more expensive than purchase
Price inflated to favor future employer
Procurement Ethics
37Slide38
Duke Cunningham
Procurement Ethics
38
Member of Congress (CA)
Bribery – accepted $2.4 million
PrisonSlide39
Procurement Ethics
39Slide40
21st Century Contracts Managers
Procurement Ethics
40
Kerry Khan
Program manager
Bribes & kickbacks
Over $30 million
Plead guilty
Bribery
Bid-rigging
Consequences
Prison (19 years)
Restitution ($32.5 million)Slide41
2015
Procurement Ethics
41Slide42
Where are We Today?Public corruption existsCosts taxpayers
Diverts resources
Procurement Ethics
42Slide43
Procurement Ethics43Slide44
Procurement Ethics44Slide45
The Battle is Joined
45
Procurement EthicsSlide46
Selected United States Federal Laws
Procurement Ethics
46Slide47
United StatesConflict of Interests Law,18 U.S.C. §208Bribery
18 U.S.C. §
201
Unauthorized Compensation18 U.S.C. §203Post-Employment Restrictions 18 U.S.C. §207Voiding Transactions
18 U.S.C. §218 Procurement Ethics
47Slide48
Key State LawsProcurement Ethics
Procurement Ethics
48Slide49
Washington StatutesProcurement ReformRCW chap. 39.26Ethics in Public Service Act
RCW chap. 42.52
Local Government Ethics - Contracts
RCW chap. 42.23Public Records ActRCW chap. 42.56
Procurement Ethics
49Slide50
Procurement ReformRCW Chap. 39.26Regulates procurement of goods & servicesKey provisions
RCW 39.26.020
RCW 39.26.030
RCW 39.26.040Procurement Ethics
50Slide51
RCW 39.26.020Applies toGovernment
Procurement
Employees
ContractorsPotential ContractorsRequires compliance with Ethics in Public Service Act
Procurement Ethics
51Slide52
RCW 39.26.030Exemption from Public Records ActBid submissions & evaluations
Limited time
Goods and services procurements
Supports the goals of:TransparencyEffective
Procurement Ethics
52Slide53
RCW 39.26.040Protection of statutory intent regarding use of volunteersSimilar ethics rulesCompensation for official duties
Outside compensation
Limited application
Agency established group of volunteers to advise managementProcurement Ethics
53Slide54
Ethics In Public Service ActRCW chap. 42.52Applies to state employees and state officersCreates special rules for ‘Section 4’ employees
Key Provisions
RCW 42.52.140 & .150
RCW 42.52.020RCW 42.52.030RCW 42.52.040
RCW 42.52.080RCW
42.52.050
RCW 42.52.110 & .120
Procurement Ethics
54Slide55
RCW 42.52.140 & .150Gift RestrictionsAbsolute prohibition [.140]
No gift of any kind or value if intended to influence state employee
General limitation [.150]
$50 per source/gift per yearList of gifts “presumed not to influence”Section (4) restrictions [.150(4)]Complete list of acceptable giftsUnsolicited
Procurement Ethics
55Slide56
RCW 42.52.020Conflict of InterestFinancial or otherwise
Direct or indirect
Business transactions
Professional activitiesObligations
Procurement Ethics
56Slide57
RCW 42.52.030Financial Interests in TransactionsSpecific conflict of interestCommon method of defrauding government
No financial interest
Direct or indirect
Contract, sale, lease, purchase, or grantBy, through, or under supervisionIn whole or in partNo self-dealingNo participation in official capacityOfficer, agent, employee, member, or beneficial interest
Procurement Ethics
57Slide58
RCW 42.52.040Assisting in transactionsNo help on the sideDirectly or indirectly
Compensation or not
Participation at any time
Under official responsibility within 2 yearsApplies to business in which employee is partner, managing officer, or employeeLimited exceptions
Procurement Ethics
58Slide59
RCW 42.52.080Employment after public service2 years back, 1 year aheadValued above $10,000
Same contract or contracts
Limited 2 year prohibition
No beneficial interest in contract or grantParticipated in authorization or fundingAbsolute prohibition if intended to influenceActual or reasonable beliefCannot assist in transaction in which employee participated
Procurement Ethics
59Slide60
RCW 42.52.050Confidential InformationRestriction on duties both as a state employee and outside employmentNo employment that requires disclosure of confidential information
No use for benefit of you or another
Unless specifically permitted by law or contract
No unauthorized disclosuresNo intentional concealmentProcurement Ethics
60Slide61
RCW 42.52.110 & .120Compensation for duties & outside activitiesGenerally, only pay from stateOfficial duties [.110]
Compensation, gift, reward, or gratuity
Performing, omitting, or deferring
Limited exception for employees of institutions of higher education Outside activities [.120]Start with absolute prohibitionList of conditions and duties that would allow such payAdditional conditions if pay is from a state agency
Procurement Ethics
61Slide62
RCW Chap. 42.23Applies to cities, counties, towns, districts, municipal and quasi-municipal corporations [.020]No beneficial interest [.030]Direct or indirect
By, through, or under supervision
In whole or in part
Includes any paymentsLong list of exceptions“Remote interests” permitted [.040]Must be disclosed to governing bodyGoverning body approves contract
Privilege lost if attempt to influenceProcurement Ethics
62Slide63
RCW Chap. 42.23, cont.Any such contract is void[.050]$500 penalty + any other criminal or civil liability [.050]Grounds for forfeiture of office
Sets a floor local governments can raise [.060]
Other prohibited acts [.070]
Securing special privilegesOutside compensationOutside employment that might require disclosure of confidential informationDisclosure of confidential information
Procurement Ethics
63Slide64
Ethics Violation as CrimeRCW 9.18.130Collusion to prevent competitive billingRCW 9A.56.020
Theft
RCW 9A.60.020
Obtaining signature by deceptionRCW 9A.68.010BriberyRCW 9A.68.020 & .030Requesting or receiving unlawful compensationRCW 9A.68.050Trading in special influence
Procurement Ethics
64Slide65
A Proposed Analytic FrameworkProcurement Ethics
65Slide66
Public vs. Private
Procurement Ethics
66Slide67
Procurement Ethics
67Slide68
Procurement Ethics
68Slide69
Procurement Ethics
69Slide70
Why Do We Care About Procurement Ethics?
70
Procurement EthicsSlide71
How to Think About Procurement EthicsDon’t think about “ethics”“Ethics” is NOT “Morals”List of rules governing conduct
Not about being “right” or “wrong”
Think about compliance
Behave in accordance with rulesNo appearance
of improprietyNot restricted to actions during work
71
Procurement EthicsSlide72
Potential Ethical Issues
Procurement Ethics
72Slide73
Potential Ethical Issues, cont.
Procurement Ethics
73Slide74
Less Obvious Ethical Issues
Procurement Ethics
74Slide75
Less Obvious Ethical Issues, cont.
Procurement Ethics
75Slide76
First Draft
76
Procurement EthicsSlide77
Analytic Framework for Procurement Ethics
77
Procurement EthicsSlide78
Lifecycle Procurement EthicsProcurement Ethics
78Slide79
Procurement Stages
Procurement Ethics
79Slide80
Planning
Procurement Ethics
80Slide81
Solicitation
Procurement Ethics
81Slide82
Evaluation & Award
Procurement Ethics
82Slide83
Protest
Procurement Ethics
83Slide84
Contract Management
Procurement Ethics
84Slide85
How Will They Know?Procurement Ethics
85Slide86
It’s the Company You Keep
Procurement Ethics
86Slide87
Criminals are Not Trustworthy
Procurement Ethics
87Slide88
Warning Signs
Procurement Ethics
88Slide89
Warning Signs, cont.
Procurement Ethics
89Slide90
It’s How You Act
Procurement Ethics
90Slide91
Sources of InformationCo-workersDisgruntled spouses (or former spouses)Disappointed mistressesWhistleblowers
Competitors
Internal Audit
SAO AuditsWiretapsArrested co-conspirators91
Procurement EthicsSlide92
There’s An App for ThatMove towardIncreased transparencyGreater accountability
Cost effective government
Procurement Ethics
92Slide93
Takeaway Messages
93
Procurement EthicsSlide94
“An awful lot of corruption comes from government contracts. You can’t have no-bid contracts. You have to have transparent contracting procedures.”-
Melanie Sloan
Former federal prosecutor
Citizens for Responsibility & EthicsProcurement Ethics
94Slide95
Think AboutHistory is informativeLifecycle procurement ethics
Be alert for red flags
Procurement Ethics
95Slide96
Plan AheadEthics policyEthics training
Ethics advisor
Checks & balances
Audits
Procurement Ethics
96Slide97
Remember …
“If you can’t be a good example, then you’ll just have to be a horrible warning.”
Catherine Aird,
His Burial Too
97Slide98
Additional Resources
98
Procurement EthicsSlide99
Selected WebsitesWashington Executive Ethics Boardwww.ethics.wa.gov
Washington Department of Enterprise Services
www.des.wa.gov
NIGPwww.nigp.org NASPO
www.naspo.org NAEPwww.naepnet.org
MRSC
www.mrsc.org
99
Procurement EthicsSlide100
State StatutesRCW chap. 42.52, Ethics In Public Service ActRCW chap. 39.26, Procurement of Goods & Services
RCW chap. 42.23,
Code of Ethics for Municipal Officers – Contract Interests
RCW chap. 42.30, Open Public Meetings ActRCW chap. 42.56, Public Records ActRCW titles 9 & 9A, Crimes and Punishments & Criminal Code
100
Procurement EthicsSlide101
Procurement Ethics TrainingDES, Washington State Purchasing & Procurement Ethicshttp://des.wa.gov/about/pi/ProcurementReform/Pages/PRTraining.aspx
EEB, Training
http://www.ethics.wa.gov/TRAINING/Training.htm Procurement Ethics
101Slide102
OtherU.S. Department of Defense, Office of General Counsel, Standards of Conduct Office, Encyclopedia of Ethical Failure (October 2014)
http://www.dod.mil/dodgc/defense_ethics/
U.S. Office of Government Ethicshttp://www.oge.gov/home.aspx
Procurement Ethics
102Slide103
Transparent GovernmentAmerican Transparency – Open the Books Projectwww.openthebooks.com
Washington State Open Checkbook
www.fiscal.wa.gov/checkbook
Procurement Ethics
103Slide104
OtherJohn Mikesell & Cheol Liu, The Impact of Public Officials’ Corruption on the Size and Allocation of U.S. State Spending (2014)
Caitlin Ginley,
Grading the Nation: How Accountable Is Your State?
Center for Public Integrity, State Integrity 2012Procurement Ethics
104Slide105
Thank You
105
Procurement EthicsSlide106