Corruption, what is it and why does it seem to flourish in the world of business and in particular government contracting? Corruption as defined by Webster’s dictionary is a lack of integrity or honesty (especially susceptibility to bribery); use of a position of trust for dishonest gain (“corruption,” 2010). All over the world there are stories of corruption from money laundering, unfair awarding of contracts, bribery, and even espionage. Procurement and contracting seem to be one of the areas most prone to corruption, which inevitably has a bearing on how effective public spending can be. Additionally, corruption impairs government agencies as well as private companies because it increases production costs, eliminates true competitiveness, and in a nutshell is not good for business.
The purpose of government contracting is to facilitate business transactions between different companies, big or small, with government agencies in order to meet the needs of the government. Contracting is the main way a government operates and public money is spent. Thus, contracts are the main channels for implementing public policy, which makes stopping and controlling corruption in procurement a determining factor in policy and project efficiency.
While corruption can take place in any phase of the contracting process, it seems to be most prevalent during the evaluation phase because this is the time that potential bids are analyzed in order to select the most appropriate contractor, but the risks are not limited to this phase alone. Corruption can occur even before a contracting process starts, when decisions are made about what to contract because some project rewards start off allocated to a specific contractor. Furthermore, there is also opportunity for abuse once the contracting process has finished and the contractor has been selected. This can include a lack of performance, wanting to renegotiate contracts, over-billing the
Cited: Berrios, R. (2006). Government contracts and contractor behavior. Journal of Business Ethics, 63(2), 119-130. doi:10.1007/s10551-005-3969-8. Barbara Crutchfield George, Kathleen A. Lacey (2006). Investigation of halliburton co./tskj’s nigerian business practices: Model of analysis of the current anti-corruption environment on foreign corrupt practices act enforcement. The Journal of Criminal Law and Criminology, Vol. 96, No., pp. 503-525. Stable URL: http://www.jstor.org/stable/40042774 Corruption. (2010). Retrieved November 9, 2010, from http://www.websters-online-dictionary.org/ Larry G Medley Sr. (1997). Can government contracting be reengineered? AACE International Transactions ,28-34. Retrieved November 11, 2010, from ABI/INFORM Global. (Document ID: 23529337). Phung Nguyen. (2003). A history of government contracting. Journal of Public Procurement, 3(3), 416-421. Retrieved November 13, 2010, from ABI/INFORM Global. (Document ID: 724871931). Sauer, B. (2010). Deterring false claims in government contracting: Making consistent use of 18 U.S.C. § 287. Public Contract Law Journal, 39(4), 897-917. Retrieved November 13, 2010, from ABI/INFORM Global. (Document ID: 2142006641).