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What the Improper Payments Act means to government contractors

Posted by Mike Anderson on Fri, Jul 30, 2010 @ 01:32 PM

Last week the President signed into law a bill known as the Improper Payments Act.  This law will have huge impacts on the government contracting community in the near and long term future.  This new law is designed to take a major bite out of the estimated $110 Billion in misspent and/or fraudulent payments from the Federal Government annually.  The President has stated that he expects to reduce this number by at least $50 Billion by 2012 with the help of this law.  The law is designed to put pressure on the government agencies to force them to make sure they are paying only legitimate contractors (previous investigations have showed payments to deceased people, to multiple organizations with addresses like the Alamo in Texas, etc).  There will be audits of the agencies to enforce the law.  This almost certainly will add overhead and layers of procedure to the procurement cycle.  This should serve to slow down the procurement cycle and possibly slow down the payment cycle if nothing else.  It also will put pressure on the contractors that are successful in bidding on and winning federal contracts.  They most certainly will be faced with additional regulations to comply with, and likely be forced to prove that they comply with these regulations.  The penalties of being found not compliant with the new law could end up putting contractors on a "no bid" list for future business and even have severe criminal penalties if actions were deemed fraudulent.  Now, more than ever, all government contractors need help with the compliance issues to make sure they can deal with the new laws. 
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Topics: Improper Payments Elimination & Recovery Act, Improper Payments Act, government contracting, Ethics

Are ITAR regulations serious for small government contractors?

Posted by Mike Anderson on Mon, Jun 28, 2010 @ 03:03 PM

To the un-initiated, ITAR (International Traffic in Arms Regulations) as set forth by the Arms Export Control Act (22 U.S.C. 2278) may seem like just another government regulation that isn't always watched or enforced.  Nothing could be further from the truth.  ITAR regulations are designed to keep America's technology advances, especially those that give our national defenses an edge, at home and out of enemy hands.  The regulations are worded such that they control the "export" of this technology.  The regulations also mean that "export" could involve something as seemingly simple as a foreign visitor seeing something that is controlled, even though this happens in an American facility on American soil.  It also could mean a "Canadian" citizen (for example) seeing or hearing something in an American office that is controlled by the ITAR restrictions.  Does this mean that you might un-knowingly violate an ITAR restriction if you have a foreign visitor in your plant?  That shouldn't happen.  All technology that is ITAR controlled should be appropriately marked.  If you are in the business of developing new technology, then it is your responsibility to know when you may have technology that would be controlled by ITAR and take measures to both mark it as such and control it.  Controls would include protecting it from being seen by foreign visitors as well as other export control measures.  Recently there was a good example of the seriousness of the ITAR restrictions as you probably saw on our "Industry Update" page on this website.  This local company exported some of their products, that turned out were controlled by the Munitions List, and is now facing penalties including paying a $1 Million fine and 5 years on probation.  The company is have serious trouble and has filed for Chapter 11 Bankruptcy in part due to the violation of the ITAR regulations.  It is always better to enlist help in researching ITAR issues or reviewing the Munitions list rather than charging ahead and hoping that "it's probably no big deal".

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Topics: Ethics, ITAR, Munitions List

Do MBA's lack Business Ethics?

Posted by Mike Anderson on Tue, May 04, 2010 @ 01:12 PM

I just read an interesting article about how MBA students/graduates are more likely to cheat than other students/graduates.  http://business.rutgers.edu/files/thehoya_mccabe_march2.pdf  Being an MBA graduate myself immediately puts me on the defensive.  But after thinking about this, I realize that there are almost as many different personalities within my group of MBA degree holders as there are in society in general.  Certainly there are all types of ethics as well and you could even expect a statistical distribution within this population (MBA degree holders) of ethical beliefs and actions.  You don't have to look too far in either direction to see examples (Goldman Sachs, AIG & Enron  on one side and Honeywell, Google & Hewlett-Packard on the other).  What disturbs me is the statistical distribution is not a normal distribution but is skewed toward the side of "cheating".  If the MBA population represents business trends in general, will this "skewed" ethics curve soon translate into trends in our general society?  Has it already?  We are seeing increases in crime in general and more hostile encounters everyday (increase in road rage and increase in anger management awareness).   How can we stop and reverse this trend?  Until we start rewarding executives for making the "right decision" rather than making the largest return, we will continue to have this issue.  Trouble is, how do we measure the "right decision"?  Easier said than done.  A subjective measure like that has as many definitions as there are people in the world.  Stronger professional organizations might also help.  Possibly having business graduates take and sign to a Hippocratic Oath like professional physicians do might help.  Bottom line, it starts with each of us individually - we all need to have our own "Hippocratic Oath" that we follow.  I have one, do you?
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Topics: Ethics, government consulting, Business