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Avoiding Contract Scandals 101

Avoiding Contract Scandals 101

January 23, 2006 Jamie Wodetzki Risk and Compliance  

When a contract scandal breaks, everyone ducks for cover. Who broke the rules? Who knew? Who should have known? Whose heads will roll? The media shines a bright light into the darkest corners of the deal, looking for someone to blame.

There are two classic targets when the blame game begins. Those who did the dodgy deal, and those who should have stopped it but didn’t. The former look corrupt. The latter incompetent.

Using two recent contract scandals as a guide – the Boeing Tanker Aircraft scandal, and the AWB Wheat-for-Oil scandal – we’ve come up with some simple lessons for staying out of trouble.

Lesson 1:

Don’t take a cushy job at the company to which you just awarded a contract at an inflated price.

Failure to heed this lesson cost Darleen Druyan 9 months in prison. The former Air Force procurement official had awarded a $23 billion tanker aircraft contract to Boeing as a “parting gift”, just before she went off to work there.

Druyan in happier times

Jamie Wodetzki is Exari’s Co-founder and Chief Product Officer.