Five personality faces of procurement fraud risk

Here are five employee faces to look for when trying to prevent procurement fraud, abuse and noncompliance. Their aberrant behavior can lead to manipulated purchasing systems plus major financial and reputational losses, potential litigation and/or contract termination.

Let's travel back to the early 1990s. Darian, a midlevel federal government employee, has an extensive background in contracting. He’s leading a two-phase advanced computerization research and development (R&D) project of specialized software tools for a U.S. federal agency.

The project’s milestone dates for the first phase — the R&D — are planned from January 1991 through June 1994. The second phase, a nationwide implementation of the software tools that the agency had developed during the first phase, are planned for July 1994. The agency plans to implement the tools under a government contract with a base value of $4.5 million.

In July 1993, Darian (not his real name) receives an unexpected telephone call from his boss’s boss. The big boss wants to let Darian know the division appeared to be ending the year with just over $4.5 million in unexpended funds and asks if the computerization project could transition from R&D to integration a year early. Darian is a good midlevel employee and he hopes to eventually move up the government management chain, so he answers with a confident “absolutely!”

The big boss (with pleasure in his voice) thanks Darian for his dedication to the mission’s success but wants to ensure that Darian is aware that he must commit the funds to a contracted vendor before the end of November 1993.

Darian realizes that he has only five months (July 1993 to November 1993) to complete all the required paperwork and convince a contracting officer (CO) to have a contract awarded, which is extremely difficult. In a best-case scenario, the average full and open federal government competitive contract competition takes six to eight months.