Ethics and Contract Negotiation

Answer

Ethics and Contract Negotiation

In June 2002, MCI WorldCom publicly admitted that it had engaged in accounting irregularities which led to overstated profits that ran into billions of shillings (McCafferty, 2004). However, it was not suspended from future government contracts despite numerous criticisms from its competitors. They were however suspended in July 2003 after both the Senate and House Appropriation Committee wanted General Service Administration (GSA) to explain the reason for the lack of suspension. Although MCI WorldCom did not tamper with the process of bidding for the contract, it was debarred as a result of a lack of business integrity in its practices.

In July 2003, Boeing was banned from bidding on defense projects following evidence that it had acquired proprietary information that belonged to its competitor Lockheed, therefore, giving Boeing an unfair advantage (The Economist, 2003). Additionally, two executives from Boeing were fired, and it's then CEO Condit resigned. Boeing used fraudulent actions to obtain the contracts.

In September 2008, a deployable training operations specialist was fired for forming a company with another federal employee and two local nationals with the aim of bidding for a government contracts where he served as the technical oversight representative. The misconduct was using his position as technical oversight representative to favor his company. The FAR regulation dictates that a contracting officer should not knowingly award a contract to a government employee (Acquisition, 2016)

The Federal Acquisition Regulations (FAR) state that government will only do business with responsible contractors and provide for the power to ban or suspend offending contractors to enforce the policy (Acquisition, 2016). A contactor can be banned if there is evidence of a crime that is related to business integrity including fraudulent actions in obtaining government contracts, violation of antitrust laws, activities that are of moral turpitude such as embezzlement and bribery and using unfair trade practices. A contactor can also be banned if he/she does not meet the set standard as outlined in the contract either willingly or unwillingly. Additional, prevention from participating in bidding for government contracts can be as a result of any other severe or compelling misconduct. 

In the case of MCI WorldCom, the General Service Administrations unwillingness to ban the company from further engaging in government bids exposes an unwillingness to enforce the policies in place. On the other hand, the organization responsible for awarding the technical oversight representative and his company the government contract did not follow duly procedures to determine ownership of the company. If he could have been identified as having a stake in the company bidding, it would have been excluded. In addition to being unable to receive government contracts, they can also not receive subcontracts from other contractors.

Although the policies and regulations have been put in place, and there is a code of ethics in conducting such contract, it is not enough to determine legibility of a contractor. For instance, cases where there has been disbarment based on fact-based findings as a result of an independent investigation by a procuring body. Mostly, suspension or debarments are as a result of prosecutions and investigations against the contractor mostly by its competitors. As a result, if it is possible to prevent these prosecutions, it would be difficult for the procuring body to get evidence that is enough to either suspend or ban a contractor.