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Procurement Ethics

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

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  1. Procurement Ethics Presented by Greg Tolbert & James Gayton Location or Date

  2. 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

  3. Procurement Ethics Before We Get Started

  4. Procurement Ethics Our Goals • Context • Issues & analytic framework • Tools

  5. Procurement Ethics

  6. Contract Remedies Avoid PowerPoint Poisoning

  7. Contract Remedies

  8. Contract Remedies Stay Awake

  9. Contract Remedies Remember to preface my personal ethics questions with “Say, I have a friend who …”

  10. Procurement Ethics Stay Out of the Headlines

  11. Procurement Ethics

  12. Procurement Ethics

  13. Procurement Ethics Stay Out of the Unemployment Line

  14. Procurement Ethics Stay out of Court

  15. Contract Remedies

  16. Procurement Ethics Why Are We Here?

  17. Procurement Ethics Disclaimer

  18. Procurement Ethics Public Expectation

  19. Procurement Ethics The Tension

  20. Procurement Ethics Context The Development of Government Procurement

  21. Procurement Ethics England – 1600’s • Class system • Political power held by wealthy landowners • Government Service is a path to wealth

  22. Procurement Ethics Colonial America

  23. Procurement Ethics American Revolution

  24. Procurement Ethics

  25. Procurement Ethics Congressional Reform • Centralized Purchasing Authority • The Patriot Financier

  26. Procurement Ethics War of 1812

  27. Procurement Ethics 1850s

  28. Procurement Ethics Civil War

  29. Procurement Ethics

  30. 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)

  31. 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

  32. Procurement Ethics

  33. Procurement Ethics Whiskey Ring Scandal

  34. Procurement Ethics Teapot Dome • Bribery scandal • U.S. government oil lease • No-bid contracts • Very favorable lease terms

  35. Procurement Ethics Abscam • FBI sting operation • Targeted political corruption • 7 Members of Congress convicted

  36. Procurement Ethics Operation Double Steel • Undercover FBI operation • Offered bribes and kickbacks to government officials involved in purchasing materials and equipment • 58 arrests

  37. Procurement Ethics Military Contracts • Air Force Lease of Boeing KC-767 tankers • Lease more expensive than purchase • Price inflated to favor future employer

  38. Procurement Ethics Duke Cunningham • Member of Congress (CA) • Bribery – accepted $2.4 million • Prison

  39. Procurement Ethics

  40. 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)

  41. Procurement Ethics 2015

  42. Procurement Ethics Where are We Today? • Public corruption exists • Costs taxpayers • Diverts resources

  43. Procurement Ethics

  44. Procurement Ethics

  45. Procurement Ethics The Battle is Joined

  46. Procurement Ethics Selected United States Federal Laws

  47. 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

  48. Procurement Ethics Key State Laws Procurement Ethics

  49. 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

  50. 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

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