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Procurement Insight

 
Jeffery A. White, C.P.M
President and CEO

 
October 3, 2019 

Kickbacks and Bribery

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The Foreign Corrupt Practices Act makes it a federal crime to promise, offer, or make a bribe to a foreign government official in order to obtain or retain business or secure an improper business advantage.  Kickback rules prohibit scenarios where a negotiated payment is made in exchange for improperly facilitating a transaction. If you see anyred flagsfor either, it is time to bring in your immediate supervisor and the legal department.     

Red flags are a hint that something may be amiss, either internally or externally from your organization.  In some cases, a company’s outside representative may decide to engage in conduct that might violate the rules. In other cases, the improper payment is arranged by someone in the contractor’s organization responsible for making a sale to the foreign government. Depending on the situation, the “slush fund” for an improper payment scheme can reside in any number of business functions, including the purchasing or subcontracts department.

What are typical red flags that might pop up in regard to subcontracts? 


--> Decisions to direct an award to a particular supplier when that supplier’s qualifications or pricing does not support the decision.

--> Unusual “trappings” around the way that the business relationship is handled during performance, such as a reluctance to provide sufficient progress reports, etc.

--> Methods of payment that are outside the norm might suggest a diversion of some of the funds to an improper use.

All subcontracts should have an anti-bribery and anti-kickback clause. If it is made clear that no improper activities will be tolerated, and the company lives up to both the spirit and the letter of the law in its oversight efforts, then the contractor will not be seen to be actively complicit in case some wrongdoing is later uncovered involving the subcontractor. 


 
Red flags? Let J.A. White & Associates, Inc. help you with your
Procurement challenges.
 
Contact Us:
info@jawhite.com

803-407-1399 ext. 101
1341 Garner Lane, Suite 104 | Columbia, SC 29210
5353 Wisconsin Avenue, NW, Suite 440 | Washington, DC 20015

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