Rutgers – NIGP Conference May 1, 2014 Atlantic City, NJ Susan Jacobucci, Esq., CMFO “The character that takes command in moments of crucial choices has already been determined. It has been determined by a thousand other choices made earlier in seemingly unimportant moments. It has been determined by all the little choices of years past — by all those times when the voice of conscience was at war with the voice of temptation — whispering the lie that it really doesn't matter. It has been determined by all the dayto-day decisions made when life seemed easy and crises seemed far away — the decisions that, piece by piece, bit by bit, developed habits of discipline – or of laziness, habits of self-sacrifice — or of self-indulgence, habits of duty and honor and integrity — or dishonor and shame.” Ronald Reagan, The Citadel, May 15, 1993 Moral Compass Doing the “Right Thing” Following the Rules C.I.G.A.R. Conflicts Information Gifts Abuse of Office/Power Representation Pay to Play Statutes Nepotism Form of Government? Certifications? Limits of Authority Am I entering the process as an independent, objective individual? Am I am solely in the public interest? (not my own, a vendor, my superior, my friend) Am I acting within the statutes, ordinances, rules…am I coloring within the lines? Has anything influenced my decisions along the procurement process? Have I maintained confidentiality. Play fair Don’t take something that isn’t yours Don’t take anything from strangers Don’t tell secrets or “talk out of school” Don’t play favorites Bid rigging Bid List Sharing Procurement manipulation Specs specific to one vendor Estimate manipulation Manipulating lowest, responsive, responsible bidder definition Where can things go wrong? I need a Widget Widget Arrives What is it and where do I get it? Placing the Order Specs. RFP, Quotes or Bid? Choosing Doing the Work/ Getting the Item Paying, Performance and Maintenance Widget in Place and Working Who is coming to you with the request? Do you work with your “money”/budget person? What is your procurement authority? Where can things go wrong? A vendor, superior, “friend” convinces you that the government agency needs a widget.[Outside influence] You have a part of an outside company whose product you are convinced will help the agency/or save money… [Conflict/personal interest] What is it? How many? Is it within my realm of knowledge Research (not only the product/service) but the trends and present climate What are my options for procurement? Where can things go wrong? Bad description Narrow description – only a certain company manufactures it Only Timbuktu carries it Maybe its time to rethink the product Who is writing the description/specs? Who is estimating the cost? What are the pitfalls of cost estimation? The boilerplate Change Orders Options in the bidding process Too specific or two broad Pre-bid meetings - communications Where can things go wrong? Procurement officer knew nothing about the item (a fire engine). Allowed a helpful vendor to write the specs. Unsurprisingly, the vendor’s company was the only one to meet the specs. Purchasing agent let a friendly bidder know the engineer’s estimate. Vendor underbid and “made up” the difference with change orders. Lowest, responsive, responsible bidder Getting quotes Weighting the bid Disclosure of “choice” criteria Public Opening Sharing of documents Procurement Officer in a “police agency” pled guilty to sharing confidential information with a contractor about ongoing criminal probes into the a competing contractor’s billing practices in exchange for prostitutes, cash, and luxury travel. The Contract Being clear Meeting of the minds Payments and timing Making sure the bid and placement of order match Where can things go wrong? Make sure everything you agreed to in RFP is in the order request Include installation parameters Include maintenance concerns Be Specific Is it what was ordered Internal controls Who checks If installing – what are criteria Warranties –how are they followed/voided Maintenance (only widget in the world) Where can it go wrong? Consultant conveniently orders extra computers for his own private side sale. Purchasing Officer slips a few extra cartridges of toner in the order. It doesn’t work Installation delayed Multiple vendors Platforms are different Where can it go Wrong? Didn’t order it Voiding the Warranty Engineer or other sign-off Performance guarantee Maintenance guarantee Fails to perform Fails to…. Planned obsolescence Where can it go wrong? Payment dates changed Unforeseen delays Out of stock, business (better deal comes along) Where are maintenance agreements filed Spreadsheet or other performance tracking Fixed Asset No longer useful – what to do with it? You are a Procurement Specialist who works in the State of Greenacre Purchase and Property Office. Your neighbor of 17 years, who works for a State lobbying firm, offers you a ticket to join him for a John Mayer concert at the Greenacre Center. You are not sure if the ticket came from your friend’s lobbying firm or from him personally. The face value of the ticket is $375. A Procurement abused her authority and improperly used a government vehicle when she employed a government vehicle and three employees under her supervision to move personal property in a government rental vehicle. The employees helped her for 3 hours. A government purchasing agent used his official position to obtain contracts for private sector companies with which he had an affiliation. In addition, the PA accepted a “finder’s fee” (i.e., kickbacks) from one company for his efforts in helping the company obtain government contract work. A Purchasing Agent whose responsibilities included fleet management and authorization of repairs of municipal vehicles had attempted to obtain free repair services for his personal vehicles from two vendors. The PA also insinuated to the vendors that the cost of repairing his personal vehicles could be recouped as part of the charges for repairs to municipal vehicles. The purchasing office employees were part of a scheme in which they used government funds to purchase laptops and recycled computer components from the contractor’s sales manager at inflated prices, and split the overcharged amounts among themselves. In 2005 and 2006, while serving as a contracting specialist at Camp Arijan, Murray received approximately $225,000 in bribes from DOD contractors. In return, he recommended the award of contracts for various goods and services. Murray also admitted that he received an additional $20,000 in bribes from a DOD contractor in exchange for the award of a construction contract The employee put in an order at the department print shop, certifying that a series of posters were for official business. The posters were actually for the employee’s side business. Additionally, the employee purchased a conference table, for which his own business got a $400 credit toward a conference table of its own. In another bribery case at Camp Arifjan, another Army Major, James Momon, Jr., accepted cash bribes from five DOD contracting firms that supplied bottled water and other goods and services to bases in Kuwait. Momon, a contracting officer at the camp, awarded contracts and Blanket Purchase Agreement calls to those contractors, receiving $5.8 million as payment for his actions. Momon pled guilty to bribery and conspiracy to commit bribery.