Conflicts of Interest in Governmental Contracting

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Table of Contents

Introduction
The Dimensions of the Problem
Reasons Why the Problem Should Be Confronted
Definitions
The Pros and Cons of the Strategies for Confronting the Problem
Similarities and Differences
Possible Adverse Consequences
Recommended Strategies
References

Introduction

Governments have the responsibility of promoting trade activities and developing infrastructure for their citizens to live happily. Nations have different resources, and this means that they must seek assistance from those that have what they lack. In addition, governments rely on individuals and non-governmental organizations to provide services and goods through contracts (Hansen, 2014). This essay examines the problem of conflicts of interest in government contracting and the steps that should be taken to curb this menace.

The Dimensions of the Problem

Governments have a lot of money that is supposed to be used to offer high-quality services to the public. People require passable roads, security, water and sewerage systems, schools, health facilities, and other amenities that promote their standards of living. However, they do not have all the required manpower to offer these services to their citizens. Therefore, they seek the services of contractors and expect them to meet the required standards. However, the high costs of tenders and other benefits associated with government contracts make it lucrative for businessmen and those responsible for awarding them. The competition involving winning tenders makes some people use dubious means to win them. Government officials are usually influenced to accept bribes from companies that want to win tenders through backdoor schemes. Developing nations are at significant risk of flouting procurement processes because of incompetent and corrupt individuals and institutions. The problem with most countries is that they have weak policies that regulate the process of awarding government contracts to individuals. Unscrupulous companies use these loopholes to fleece governments and the public money, yet they offer substandard goods and services. In addition, power and politics play significant roles in determining who wins contracts and the amount of money the contractor wins. The problem of conflict of interest in governmental contracting occurs in the following ways.

Governments establish boards that are responsible for awarding contracts to individuals or companies. The board members sweat to uphold high moral, professional, and legal standards in selecting qualified individuals or companies to supply goods or services to the public or government. These members are not supposed to sit in panels those interview applicants who are related to them. For instance, they are not supposed to arbitrate an applicant submitted by their relatives or friends. There are high chances that they may favor their friends or relatives if they sit on boards that award tenders. The United States Office of Government Ethics requires board procurement board members to disclose their relationships with applicants and withdraw from sitting in interviews involving them.

Procurement officers may have companies that specialize in the supply of goods or services that are required by the state. They are not supposed to apply for tenders if they believe their positions may influence the outcome of the decisions of the interview panel. However, unscrupulous officers ignore this requirement and submit their applications that have higher chances of being considered. Procurement laws prohibit subjective awarding of tenders to people who have businesses that supply goods similar to those required by the government.

Corruption is the greatest problem that affects the process of government contracting. It is necessary to explain that companies that win government contracts have massive capital that enables them to finance them easily (Holmes, 2014). In addition, their financial strength influences countries to give them priority when awarding tenders. However, some of them bribe procurement officers and promise other goodies if they win tenders. Those who cannot resist the temptation to get rich quickly accept bribes and risk the quality of goods or services supplied by contractors.

The advent of democratic systems of governance gave political leaders the excess power to dictate who should be given contracts. Some political leaders, especially those in high positions arm-twist procurement officers to award tenders to their friends or family members. They ignore the procedures for awarding government tenders and use their powers to dictate who should be given. Sometimes, they promise procurement officers promotions or threaten to sack them if they do not follow their orders. In addition, procurement policies are formed by politicians in various legislative houses. They have the power to establish policies that favor them and lockout their competitors. Today, most developing nations do not have faith in their parliamentarians because they focus on establishing policies that will favor them or their cronies.

Reasons Why the Problem Should Be Confronted

The problem of conflict of interest in government contracting should be controlled and stopped. This problem is a serious impediment to development and affects the lives of citizens who rely on the services offered by the public. The following reasons explain why governments and individuals eliminate the problem of conflict of interest in governmental contracting. Thomas Hobbes argued that citizens have inalienable rights that cannot be surrendered to second or third parties. However, their interests vary and are unlimited, and this may cause conflicts in society. Therefore, they surrender some of their rights to the state to ensure they are regulated and protected from abuse (Farrington, & Lewis, 2014). These freedoms are surrendered in return for efficient, transparent, fair, and legitimate services like security, health care, transport and education, and other social amenities. The people expect governments to act on their behalf and ensure contractors supply high-quality goods or services. Conflict of interest in governmental contracting violates the expectations of the social contract that the people sign with their governments. It is wrong to violate an agreement, regardless of whether it had a legal or moral obligation. Governments that do not follow the stipulated procedures for awarding contracts violate the rights of millions of citizens who spend sleepless nights voting for them and hoping they will transform their countries and improve their standards of living. Therefore, governments and individuals should work together to control and stop the conflict of interest in governmental contracting.

Government contracts are financed by taxpayers’ money. It is wrong to award contracts to individuals who do not qualify and compromise the trust of the public in government institutions. The public expects the government to act in good faith and ensure it gets high-quality services. Most people who rely on public services like health care, education, and transport systems are poor and cannot afford to hire private services. The high civic illiteracy levels in most countries hinder the ability of individuals to participate in procurement processes and demand transparency and accountability in the awarding of tenders to individuals or businesses. The high taxes paid by governments are supposed to be used to procure high-quality services from qualified suppliers (Craig, 2015). However, conflict of interest in governmental contracting influences procurement officers to award tenders to suppliers who do not qualify for them. The public sector of most developing nations is underdeveloped because of the poor-quality services offered by contractors who secured their contracts through dubious means.

Modern technology has brought competition in almost all aspects of life. People prefer a fast, efficient, and reliable technology that will not inconvenience them, especially when its services are needed urgently. The process of publishing government tenders ensures all experienced and qualified contractors apply for the various vacancies offered. Those with impeccable performance records are supposed to be considered for these tenders because there are high chances they will not disappoint the public. In addition, the public expects the government to select the best candidate who will complete contracts on time and charge reasonable fees. However, conflict of interest in governmental contracting flouts these expectations. This problem encourages favoritism in the process of awarding tenders, and this means that the procedures established to select winners are flouted. People who win tenders are awarded based on their relationships with procurement officers. Contractors who win contracts through dubious means cannot offer high-quality services because they cannot have their ways out if the public corner them. Therefore, it is necessary to fight the problem of self-interest in governmental contracting to ensure governments hire companies or individuals who use the latest technology that is affordable, efficient, fast, and reliable.

It is not easy to account for the work done and time taken by a contractor who gets contracts from subjective selection processes. Unscrupulous contractors bribe procurement officers and influence their decisions regarding who should win government tenders. They cannot demand high-quality services because they know what happened during closed doors of boardroom meetings and interviews. Conflict of interest in government contracts benefits only the tender committees and contractors.

Definitions

Conflict of interest refers to issues that influence to make decisions that will benefit their friends, families, or themselves. People who are responsible for regulating the process of contracting governmental suppliers should not interfere with the outcome of tendering. A contract is an agreement that involves a party paying for the goods or services offered by another, the process should be free and fair to ensure only qualified individuals get tenders to supply goods or offer series to the public. Government contracting refers to the processes that governments use to select and award tenders to suppliers and service providers. The process is supposed to be guided by ethical, professional, moral, and legal policies to ensure contractors are given jobs only after they meet the required threshold for their jobs.

The Pros and Cons of the Strategies for Confronting the Problem

It is easy to confront the problem of conflict of interest in governmental contracting if people have the will to do so. Behavioral change is a deliberate action that people take to transform institutions and individuals. It is easy to complain about a problem, but most people are usually not ready to take the first step to solve it. Therefore, it is possible to control this problem through any of the following strategies.

The member or official concerned should identify and disclose the conflict-of-interest issue in governmental contracting to ensure it is understood properly by all stakeholders. Most people think that disclosing this problem means that an individual is guilty. This notion should be avoided because it discourages people from disclosing the chances of developing conflicts of interest in procurement processes. The members concerned should identify their responsibilities and how these are connected with the issues at hand (DeHoog, 2013). This process is important because it helps them to avoid cases where they become judges where they are supposed to defend themselves. In addition, there should be measures to protect and reward individuals who are ready to disclose the conflict-of-interest risks that may arise in the awarding of tenders. The second approach involves deciding on the action that should be taken to manage the negative effects of this problem. The public has the responsibility of deciding what action should be taken to streamline the process of procurement of government contracts. The steps taken by the public include protests to demand full disclosure of the details of government contracts. This enables procurement officers to be accountable and transparent in awarding contracts. The public may influence legislators to establish policies that give individual opportunities to witness the interviewees and participate in the process of awarding contracts.

The advantages of conflict-of-interest management in governmental contracting have the following advantages. It is necessary to state that the steps highlighted above are necessary for promoting transparency and accountability in the issuance of public tenders (Moore, 2012). Public services are owned by citizens who require them to improve their standards of living. Therefore, the procurement processes should be free, fair, and transparent to ensure the public gets maximum benefits. Identification of the areas that may have a conflict-of-interest issues helps government officers to avoid creating room for compromises. In addition, it helps governments to fill loopholes that may jeopardize the process of awarding tenders to contractors. Governments can save a lot of money if the issue of conflict of interest in contracting is eliminated.

On the other hand, these strategies may not be effective in managing this problem. Most people do not care whether the public will benefit or suffer due to their actions of awarding tenders to incompetent individuals or companies. Therefore, they may not expose this problem regardless of the magnitude of the losses this action may have on the public. In addition, people fear being victimized by the government or the public. They may not disclose this problem because some individuals in high positions may sack them. It is not easy to identify conflicts of interest in individuals unless a problem has occurred. Therefore, the public suffers losses before it recognizes that there was a problem in the process of awarding tenders.

Similarities and Differences

The major similarities between these strategies are that they both involve key stakeholders. Identification and disclosure of this problem are responsibilities vested in public officers. They should be at the forefront in advocating transparent and fair procurement processes and eliminating the chances of compromising the quality of public service offered by private companies. The public has the responsibility of taking appropriate action to ensure the issue of conflict of interest does not affect the process of selecting contractors. The major difference between these strategies is that the public has little or no control over the process of procurement if there is no appropriate legislation to give power to the people. Democracy demands that the due process of law must be followed in addressing problems. Therefore, the public may be a toothless dog if there are no laws to give them the power to stop flawed government projects.

Possible Adverse Consequences

Numerous adverse effects are associated with the strategies established to fight the issue of conflict of interest in governmental contracting. There are chances that democracy may be used to disguise cheap politics regarding the process of awarding tenders to individuals or companies (Wulf, 2012). It is easy to use a court order to stop a project from when investigations are done and completed to determine the qualification and appropriateness of the process of awarding public tenders. The interviews conducted to hire contractors may take months to be concluded, and this means that the public may suffer yet other avenues do not take too much time (Berry, 2014). Multinational companies may be discouraged from investing in nations that have complicated tendering procedures. Most tenders are awarded to multinational companies, and this means that a country may have stunted development if its tendering process involved tedious documentation.

Recommended Strategies

The existing penalties for individuals and companies that perpetuate this criminal are lenient and that is why it cannot be eliminated easily. Countries that want to eliminate this vice should establish stricter penalties for individuals who flout the prescribed legal procedures for applying and winning tenders. In addition, the tendering process should be open to the public to allow transparency and accountability. Governmental contracting processes use the public’s money and thus it must be flawless. The issue of conflict of interest in contracting is a serious problem that affects all nations. People who have no public interest at heart do not think it is wise to use ethical approaches to awarding tenders to companies. Government officers and the public should work together to eradicate this problem and ensure their country develops. The consequences facing the strategies of managing this problem are inevitable. However, it is important to be late than waste money and other valuable resources in flawed procurement processes. Conflict of interest in government projects is the main cause of the inefficiencies, delays, and unnecessary expenses that waste the resources of governments.

References

Berry, N. S. (2014). Did we do good? NGOs, conflicts of interest, and the evaluation of short-term medical missions in Sololá, Guatemala. Social Science & Medicine, 120, 344-351.

Craig, R. B. (2015). The Bracero Program: Interest Groups and Foreign Policy. Austin: University of Texas Press.

DeHoog, R. H. (2013). Contracting Out for Human Services: Economic, Political, and Organizational Perspectives. New York: State University of New York Press.

Farrington, J., & Lewis, D. J. (2014). Non-Governmental Organizations and the State In Asia: Rethinking Roles in Sustainable Agricultural Development. London: Routledge.

Hansen, M. (2014). Intelligence Contracting: On the Motivations, Interests, and Capabilities of Core Personnel Contractors in the US Intelligence Community. Intelligence and National Security, 29(1), 58-81.

Holmes, C. (2014). The Unconstitutionality of the Close the Contractor Fraud Loophole Act of 2008. Baylor L. Rev., 66, 362-447.

Moore, D. A. (2012). Conflicts of Interest: Challenges and Solutions in Business, Law, Medicine, and Public Policy. Cambridge: Cambridge University Press.

Wulf, K. (2012). Ethics and Compliance Programs in Multinational Organizations. New Jersey: Prentice Hall.

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