Unethical Procument Practices

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The Procurement Integrity Act: Is the Government Promoting Unethical Business Practices and Unfair Competition? In its efforts to streamline procurement practices, it appears that the government may have reinstated the “old boy” network, resulting in fewer contracts being awarded under full and open competition. BY deBBIe e Y TChISon

As a result of a multitude of procurement reforms over the last decade, there have been an increasing number of companies entering the federal marketplace. These reforms, along with the fact that the federal government is the world’s largest customer (spending more than $200 billion each year), have made the process of selling to the federal government simpler, easier, and more desirable. However, many companies that sell to the government are small businesses that lack the knowledge or the organizational structure to have an effective compliance program in place in order to manage conformity with contract terms and conditions. In addition, these procurement reforms have resulted in the elimination of thousands of positions within the government acquisition workforce. Also, the majority of the remaining workforce is due to retire in the near future. Private contractors will replace these dwindling government procurement positions.1 If the government privatizes more of its functions, are rules and regulations truly being enforced or are violations being overlooked? In its efforts to streamline government procurement practices, it appears that the government may have reinstated the “old boy” network that was repealed with the enactment of the Procurement Integrity Act (PIA). The result is fewer contracts being awarded under full and open competition, thus increasing costs and promoting unethical business practices and unfair competition. Although violations to PIA carry fines, imprisonment, and

the potential for suspension and debarment, there continues to be widespread favoritism and conflicts of interest (COIs) within the industry. These violations are due to the high turnover of government procurement personnel, as well as the lack of oversight over both government procurement officials and private contractors.

Requests for proposals (RFPs), also known as solicitations, are issued every day for products and services ranging from office supplies to military defense machinery. In response to an RFP, proposals are submitted and evaluated and a contract is awarded to one or more contractors. However, the rules that dictate the proposal and contract processes differ between commercial contracting and government contracting. Commercial contracting is governed by the Uniform Commercial Code (UCC). In commercial contracting, it About the Author DEBBIE EYTCHISON, CFCM, is a graduate student at the University of Redlands in Redlands, California. She has more than 15 years of experience in the government contracting field and is currently the estimating and contracts supervisor at Exotic Electro-Optics, a manufacturer of optical components for the aerospace and defense industries. She is a member of the NCMA Inland Empire Chapter in Southern California. Journal of Contract Management / Summer 2008 27


the procurement IntegrIty act: Is the government promotIng unethIcal busIness practIces and unfaIr competItIon?

does not matter whether the business (contractor) is a small or large company, and only the contract, its formation, and performance are addressed in the rules and regulations of the UCC. The UCC does not address rules with respect to proposals, nor does it address improper business practices, except to say that all transactions are to be handled “in good faith.” Contracting with the federal government, on the other hand, is governed by the Federal Acquisition Regulation (FAR), the Defense Federal Acquisition Regulation Supplement (DFARS), other agency-specific supplements. The FAR, considered to be the primary rule book, addresses the rules and regulations regarding...
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