I can say with a fair degree of confidence that of all the areas of specialization I have been involved in, the two that have been the most corrupt in the real world have been in privatization of public assets and procurement (I know some of my friends who work in finance may think differently, though I digress). I'll save the privatization one for another time - like when I can afford a B7 armored car and advanced plastic surgery...Procurement is basically you trying to get a good price from a supplier in return for volume - and you both get certainty.
As you can imagine, with a lot of confidentiality involved with a small group of people looking at large sums, the temptation to resort to the Dark Side can be overwhelming. And often, finding out the evidence for this is just about impossible. And it can be rewarding. For some contracts in the $5-10 million range, a kickback can go into 6 figures. And for contracts in the $100 million level, the payoff is easily 7 figures. On a smaller scale, decisions can be swayed with gifts. This can include dinners and tickets to prime sports events. The trouble is, this is often not seen as bribery but rather hospitality. Whilst the line is blurred, the truth is...it is wrong.
One of the most obvious ones is with Christmas gifts. In many companies, there is a rule that all gifts must be declared and "pooled", to be raffled off to all people in the company. A very real problem is that many individuals then make it clear that any gifts should be sent to people's homes and not work addresses. I recall that in one instance, the buying department of a mid size retailer received no presents from any supplier - zilch. And this was from a business unit which controlled a budget spend of over $100 million. A little investigation soon revealed what really happened. Unfortunately, the end result was not even a slap on the wrist...
In this blog I do not go into great detail about how I resolve complex challenges, but I will state that my experience is that those who work in procurement are in a privileged position and one where temptation is all around them. I am not satisfied that the temptation is resisted effectively.
From what I have seen, so many existing controls are painfully insufficient and more effective ones recommended raise considerable ire as breaches of trust and or privacy. My view is that procurement professionals must realize and accept that they need to be subject to a greater level of scrutiny and accept that this may involve actions which other specialities may not accept.
In the end, it's a balancing act, but one that has for too long given people too much freedom that has been abused. It is high time that procurement professionals recognise that standards need to become tougher - much tougher.
In this game, if you have to have nothing to hide and then you will have nothing to fear.
