Shades of Grey: Ethics, Defensibility, and Knowing When You’re Being Tested

Procurement rules are black and white, but the situations that test those rules rarely are.

The black and white part is simple. Don’t let a contractor start work without a signed contract. Don’t spend money you haven’t budgeted or don’t have available. Don’t approve invoices without confirming receipt of purchase or services rendered.

If you’re a procurement professional, you’re likely nodding your head in recognition. But you also probably know of someone – either in your organization or a colleague of a friend in another agency – who has violated at least one black-and-white rule in the past year.

And yes, sometimes these rules are broken on purpose and in bad faith – like the City of Atlanta’s pay-to-play scandal in which former purchasing officials were found guilty of accepting cash from contractors in exchange for large contracts, or the $6.7 million embezzlement case at the Las Vegas Valley Water District, or the City of Beaumont, Calif., agency officials charged with misappropriating $43 million in funds via illegal interest-free loans.

But these are outliers, cautionary tales about what happens when rules are lax and no one in the organization says anything for a long time.. Usually, a slight bend in the rules isn’t because of unethical practices or bad faith actions. Maybe a buyer was in a hurry, stuck in a bad habit, or assumed the paperwork would just catch up. There’s plenty of reasons why the rules might not be followed, even by the most steadfast procurement pros.

About 99% of people in government are doing what is right. The other 1% get the headlines. But the practical lesson is that the systems your agency operates from need to make taking the right path easier than taking the wrong one. You can’t rely on every individual to make the ethical choice under pressure every time.

What Makes Procurement “Grey”

There are five factors that push straightforward procurement situations into territory where the right answer isn’t so obvious. These aren’t excused for bad decisions, but they are the conditions that lead good procurement professionals to make mistakes, cut corners, or get pressured into outcomes they know aren’t right

Politics

Procurement is supposed to be agnostic, in theory. But in practice, it operates within a environment in which new legislation, shifting priorities, and elected officials with new initiatives can push procurement into politically charged situations. And when a scandal breaks in one agency, the surrounding organizations can all start panicking and looking inward, without any advance notice.

Conflicting Policies

Multiple legitimate priorities may be diametrically opposed. Tighten the budget, meet your sustainable purchasing requirements, and implement new living wage requirements for all contracts – all at once. All three real goals can conflict with each other in a single procurement decision, leaving the procurement team to decide which ball must drop.

Environment

Being the ethical person in an organization that isn’t fully ethic is exhausting and sometimes costly. You may experience shady leadership, a department culture of cutting corners, or a boss who thinks fast is better than correct. Undoubtedly, it’s difficult, sometimes even damaging to your career, to stand up against unethical behavior.

Personal Biases

Personal biases exist within all of us. They’re not prejudices, just the ways in which we see the world around us. They’re accumulated based on experiences like how we grew up, who our mentors and first leaders were, or what we were taught about fairness and effort, and they affect every decision we make, allowing us to feel empathy for certain people or situations or bend the rules because we “get it.”

People and Circumstances

Sometimes, other people just create difficult situations that procurement must resolve. Maybe someone accepted a gift from a vendor, or a contractor started work before the contract was in place. Maybe a bid was five minutes late but there was a documented power outage. Procurement didn’t create these situations, but it does have to handle them and maintain a record of how it did so.

Let’s run through an example.

Your agency is accepting bids for a solicitation with a 3 PM deadline. Vendor 1 submitted at 2:55 PM. Vendor 2 submitted right at the 3 PM deadline. Vendor 3 submitted at 3:05 PM – five minutes late – due to a documented power outage that affected a large part of the city. And Vendor 4 submitted at 4:15 PM, delivered in person by someone who had been in a car accident en route, arrived with a police officer vouching for the circumstances, and with visible injuries.

What would you do? Accept only Vendors 1 and 2? Accept all 4? Only accept the first 3 because a 75-minute delay would risk exposure with every other vendor who didn’t submit? Or did 3 PM mean “by” or “before,” effectively disqualifying all but Vendor 1?

Even the most reasonable, experienced procurement professionals will differ in their answers to this scenario, and they might all be acceptable. The point isn’t to resolve the scenario with the “right answer” but to demonstrate that even a clear, black and white rule – bids are due at 3 PM – can generate legitimate disagreement and confusion.

What matters is that you can defend your decision reasonably and that the defense is on record and demonstrable.

Where Procurement Gets in Trouble

There are some areas that do generate visible procurement problems.

Gifts are the lowest-hanging fruit, and procurement generally understands the “no gifts” rule. But the rest of your agency may struggle to grasp the concept, like a fleet maintenance crew accepting donuts from an auto parts supplier trying to get on the approved vendors list, or a city manager who takes sports tickets from a friend who happens to also have city contracts. In the latter, real-life case, the city manager’s career ended over $600 in basketball tickets.

Often, inconsistent application of rules leads to a failure in fairness. Examples could include limiting the reach of a solicitation, giving advance information about an upcoming contract expiration, or making exceptions for only one vendor. The opportunity you give to one bidder must be extended to all others. Making exceptions is how fairness challenges – and ultimately, thrown out contracts and rebids – make life difficult.

In the case of transparency, documentation is the key. A procurement team member may spend 75% of their time responding to public information requests, just for procurement. Overdocumenting, even the smallest things, may save your tail years down the road. Audits and records requests aren’t always immediate, and there’s likely no way you’ll remember what happened two years from now to recreate the report from scratch. But if you get subpoenaed 24 months down the road, that’s exactly what you’ll be expected to do.

What to Ask Yourself

If you’re ever struggling with a difficult decision or being pressured to do something ethically grey, ask yourself this: “If this appeared in the newspaper or on the national news tomorrow, could I defend it?”

If the answer is no, then your answer should be no as well. And most of the time, if you ask the person applying the pressure the same question, they will back down. They want to pressure a procurement officer – a subordinate – into taking a risk. They’re not willing to own that risk themselves.

There are other helpful questions to ask yourself after a difficult interaction or high-pressure situation:

“Did I do my personal best with the information I had?”
“Did I offer every possible alternative”
“Would my performance in this situation be rated highly by a colleague?”
“If this moment were being recorded, would I be comfortable watching it back?”

Oddly enough, that last question isn’t necessarily rhetorical, as many government proceedings are recorded. Public meetings are too. And the documentation you create is the record that survives long after you’ve retired – even if a subpoena brings you back to testify years later. Make sure those files are built to protect you.