An insider’s guide to avoiding procurement fraud
Fraud is an ugly word, but it might not mean what industry thinks it means in federal procurement, according to a new book on the ins and outs of federal procurement law.
Sometimes, the federal government’s response to procurement fraud is “often disjointed, inconsistent, and occasionally overwhelming,” said David Robbins, a partner at D.C. law firm Crowell and Moring, and chief author of The Procurement Fraud Guidebook, published by the American Bar Association.
Federal government procurement fraud rules are complex and dense. Robbins wrote his book to offer an insider’s view of how to navigate the forbidding material, which can drive potential suppliers away from pursuing government contracts.
Robbins has decades of experience inside the federal government dealing with the issue. He was the director of procurement fraud remedies at the Air Force, as well as co-chair of NASA’s procurement fraud working group. Currently, according to Crowell and Moring’s web site, he is the only fraud remedies coordination official in private legal practice.
The biggest issue for both industry and federal contracting officials is not being on the same page about what constitutes fraud, Robbins told FCW in an interview. It’s also crucial for both to understand the stark difference between mistakes and out-and-out criminal activity.
“There is no room for criminal fraud,” he said, but “business mistakes are not criminal events.” Being non-compliant with some arcane federal laws is not the same as intentionally trying to bilk the government out of money. Thankfully, outright criminal procurement fraud is on the decline, according to Robbins.
“There is less out-and-out fraud” because of tightened federal law and increasing oversight, he said. “There is good evidence that industry has become more compliant” with federal procurement regulations over the years, he said.
Despite those encouraging trends, there is still a gap in how federal procurement and industry officials see the issue, according to Robbins. For industry officials, he said, hearing the word “fraud” can conjure up images willful misconduct, while federal procurement officials might hear something a lot less dire.
Industry and federal procurement officials still “talk past one another” about the issue, even with higher level federal officials moving to industry and vice versa, Robbins said.
Industry contracting officials may be more concerned about “getting the right price at the right time” for their products, while federal contracting officials might be more concerned about compliance issues under the same contract, he said.
That split attention can lead to misunderstandings, according to Robbins. “As long as people keep their head and not overreact, it can work,” he said.
Everyday contracting employees, he said, tend not to move as much between the environments, which can lead to some blind spots for both sides, he said.
Many government procurement fraud professionals, according to the book, have never worked in the private sector. It also said some federal contracting professionals are skeptical about whether contractors’ desire for profit is compatible with government’s interests. The book explains that an “alarming number” of federal officials miss the idea that profit motive actually drive suppliers to do good work, on time, and on budget, to get more work which leads to more profit.
Likewise, commercial contractors fail to understand the complex federal procurement system, as well as the diverse interests of government stakeholders in procurement issues, it said.
More communications between contracting officials from both is the antidote, according to Robbins. Asking simple questions, like “does this [solution] work?” can open up a conversation between the two sides that can avoid conflict and mistakes, he said.
The emerging agile contracting environment that brings iterative, collaborative and communicative practices, holds “tremendous promise,” he said. Like strong sunshine, the practices can “shed light on procurement fraud. Fraud lives in the dark,” he said.
Mark Rockwell is a senior staff writer at FCW, whose beat focuses on acquisition, the Department of Homeland Security and the Department of Energy.
Before joining FCW, Rockwell was Washington correspondent for Government Security News, where he covered all aspects of homeland security from IT to detection dogs and border security. Over the last 25 years in Washington as a reporter, editor and correspondent, he has covered an increasingly wide array of high-tech issues for publications like Communications Week, Internet Week, Fiber Optics News, tele.com magazine and Wireless Week.
Rockwell received a Jesse H. Neal Award for his work covering telecommunications issues, and is a graduate of James Madison University.
Click here for previous articles by Rockwell.