According to an article in the December 15th, 2014 Washington Times, the new senior procurement official at the United States Treasury Department saw to it that approximately $15 million dollars in contracts dating back to 2009 were awarded to friends while she worked at the United States Department of Veterans Affairs (VA).  The findings come from a report made public on 12/15/14 by the office of the Inspector General.

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The employee in question, Iris Cooper, ran the VA’s office of acquisition operations.  In the report, it is stated that Ms. Cooper pre-selected Tridec Technologies LLC of Huber Heights, OH for a contract and, in turn, broke the work into smaller no-bid contracts which assured Tridec of getting the work.  The Inspector General’s report went on to mention that Ms. Cooper attempted to obstruct investigators in regards to the case.

US-DeptOfVeteransAffairs-SealThe chairman of the House Veterans’ Affairs Committee, Representative Jeff Miller (R-FL) stated, “this report detailing how two senior VA acquisition officials improperly steered contracts to their friends and then lied to IG officials in an attempt to cover it up is deeply troubling,”

Congressman Miller went out to say, “we’ve already been in touch with Treasury Department officials, who assured us they would investigate the circumstances surrounding the department’s hiring of Iris Cooper.”

At this time, Ms. Cooper’s attorney is denying any wrongdoing on her part.

This unfortunate story serves as a reminder to all decision makers that procurement ethics violations can cost businesses, and in this case American taxpayers, a great deal of money.  This is always a good time of year to remind your employees of business ethics in regards to giving and receiving gifts from clients and vendors.

While it is quite common for boxes of candy to arrive at the office, it is the higher-valued gifts that can be construed as a potential conflict of interest. Typically, such gifts may include tickets to concerts or sporting events, logo apparel, restaurant gift certificates and gift cards.  Of course larger scale items (wide-screen televisions, vacations, etc.) fall under the conflict of interest as well.

While one person may think it is no big deal they are wearing a supplier’s jacket, other people within the organization may view this person as a pawn of the supplier.  A certain level of respect is lost and trust in the employee will decrease.  People will wonder “what else” the employee is receiving from the supplier.

A conflicted employee may feel an obligation to the supplier who bares gifts.  While the gifts may seem innocent, there is a certainly level of influence and persuasion behind the offer.  Not to mention, “there is no such thing as a free lunch.”  You can be sure the expense of the gift is charged somewhere to your account.

The best way to combat such issues in the office is to have a code of ethics in place which includes the giving and receiving of gifts from vendors and clients.  With the support of senior management, the procurement department is a great place to develop such ethics policies.  This is especially true if the procurement team has had training that covers ethical issues in the workplace.

Feel free to share with us any questions or comments regarding ethical issues concerning giving and receiving gifts below.