chris yukins iacc defense procurement corruption november 2006

8/13/2019 Chris Yukins Iacc Defense Procurement Corruption November 2006

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Defense ProcurementDefense Procurement

CorruptionCorruption Lessons fromLessons fromthe U.S. Experiencethe U.S. Experience

Professor Christopher YukinsProfessor Christopher YukinsThe George Washington University Law SchoolThe George Washington University Law School

Presentation to Transparency International 12th International Anti-Corruption Conference (IACC)

Guatemala City, Guatemala

November 16, 2006November 16, 2006


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2

Understanding theUnderstanding the

U.S. Procurement SystemU.S. Procurement System

v.


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3

Defense Spending Dominates U.S. ProcurementDefense Spending Dominates U.S. Procurement

0

50

100

150200

250

300

350

(In $Billions)

Total Fed Procurement(FY04)DoD Procurement(FY04)


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4

Goals, Principles, ConstraintsGoals, Principles, Constraints ??Transparency Transparency

Integrity (Corruption Control) Integrity (Corruption Control) Competition Competition Uniformity Uniformity Risk AvoidanceRisk AvoidanceWealth DistributionWealth Distribution

Best valueBest valueEfficiencyEfficiency (administrative)(administrative)

Customer SatisfactionCustomer Satisfaction

Competing

Policies andAspirations


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5

Historical ProgressionHistorical Progression

SealedSealed

BidsBids

NegotiatedNegotiated

ProcurementsProcurements

FrameworksFrameworks ContractingContracting


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6Impact of Shift toImpact of Shift to FrameworksFrameworks ContractingContracting

CompetitionCompetition

ProcurementProcurementIntegrityIntegrity

TransparencyTransparency


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Bad ActorsBad Actors

Some Obvious ProblemsSome Obvious Problems


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8DarleenDarleen DruyunDruyun Previously highest-ranking civilian official inAir Force procurementsystems Convicted of improper jobnegotiations with Boeing Admitted favoring Boeingin hundreds of millions ofdollars in procurement Sentenced to prison

$650M Boeing settlement


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9Michael Wynne on theMichael Wynne on the

Boeing tankerBoeing tanker --leaseleasedealdeal

They [Airbus]They [Airbus]came in a couplecame in a coupleof weeks agoof weeks ago

and offered to build theand offered to build themajority [of themajority [of thetankers] here intankers] here in

America. . . . I am not America. . . . I am notsure where this willsure where this will

lead,lead, but the benefits ofbut the benefits ofcompetition may becompetition may be

revealing revealing

.

.


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Mike, you must be out ofyour mind!!! AF Secretary JAMES ROCHE


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11More

Obvious

Problems

Duke

CunninghamDavid Safavian

Ex-Aide To Bush Found GuiltySafavian Lied in Abramoff ScandalBy Jeffrey H. Birnbaum

Washington Post Staff WriterWednesday, June 21, 2006; Page A01

Congressman resigns afterbribery plea

California Republican admitsselling influence for $2.4 million

Monday, November 28, 2005(CNN) -- Rep. Randy "Duke"

Cunningham


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Combating CorruptionCombating CorruptionHuman capitalHuman capital to bolster procurementto bolster procurement

system from withinsystem from withinProper staffing Proper staffing

Qualification, Recruiting, Training, Retention, IncentivesQualification, Recruiting, Training, Retention, Incentives

A Culture of Anti A Culture of Anti --CorruptionCorruption At leadership levels: costs of corruption At leadership levels: costs of corruption

Creates large, albeit unstable, coalitions aligned againstCreates large, albeit unstable, coalitions aligned againstgoverning party governing party

At field level: how to instill ethics in those in At field level: how to instill ethics in those in public service public service public and private? public and private?


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13Acquisition Workforce & Procurement Spending

Defense(reflective of government-wide experience)

050

100150200250300350400450500

1990 1999 2004Fiscal Year (FY)

Acquisition Workforce

(In hundreds ofthousands, PackardCommissionMethodology)

DoD ProcurementSpending (in billions ofdollars)


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14Other Causes for Concern:Other Causes for Concern:Outsourcing of Procurement PositionsOutsourcing of Procurement Positions

Which code of ethics

government or contractors?


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15How Guidelines and DFARS CompareHow Guidelines and DFARS Compare

Adjust program to risk Adjust program to risk

Full cooperation with governmentFull cooperation with governmentCooperation = sentencing factorCooperation = sentencing factor

Timely reporting to governmentTimely reporting to governmentSelf Self --reporting = sentencing factorreporting = sentencing factor

DisciplineDiscipline6. Incentives and discipline6. Incentives and discipline

Periodic review; audits;Periodic review; audits;hotlinehotline

5. Monitor, evaluate, reporting5. Monitor, evaluate, reportinghotlinehotline

TrainingTraining4. Training4. Training

3. Exclude risky personnel3. Exclude risky personnel2. Knowledgeable leadership2. Knowledgeable leadership

Code of EthicsCode of Ethics1. Standards and procedures1. Standards and procedures

DFARS 203.7001DFARS 203.7001Sentencing GuidelinesSentencing Guidelines


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United NationsUnited Nations

InitiativesInitiatives


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17Procurement

YesYesTransparency, including inTransparency, including inbudgeting and accountingbudgeting and accounting

NoNoMeasures to control procurementMeasures to control procurement

personnelpersonnel e.g., rules and codese.g., rules and codes

MaybeMaybeBid protest and appealBid protest and appeal

YesYesObjective and predeterminedObjective and predeterminedcriteria for awardcriteria for award

YesYesAdvance award criteria andAdvance award criteria andpublicationpublication

YesYesPublic InformationPublic Information

UNCITRAL Model ProcurementUNCITRAL Model Procurement Law Law

UN Convention AgainstUN Convention AgainstCorruption (Art. 9)Corruption (Art. 9)


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ConclusionConclusion

Professor Christopher YukinsProfessor Christopher [email protected]@law.gwu.edu

Tel. 202 Tel. 202--994994--99929992

chris yukins iacc defense procurement corruption november 2006

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