Round Table on The Proposed Code of Conduct For Government Procurement

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Round Table on The Proposed Code of Conduct For
Government Procurement

• Mr. Ron Lunau
• Ms. Phuong Ngo
• Ms. Catherine Beaudoin
• Gowling Lafleur Henderson LLP - Ottawa
• Procurement Group
• www.governmentcontracting.ca

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Consultation on the draft Code of Conduct for
Procurement

• Question 1 Is the purpose of the Code of Conduct
  for Procurement clear? If not, please explain.
• Question 2 Does the Code as currently formulated
  provide adequate information to help guide your
  actions? If not, please provide suggestions on
  other tools you would like to see.
• Question 3 Do you have suggestions about how to
  better promote the Code?

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Amendment No. 021 to RFP

• It is acknowledged by Canada that third
  parties were involved in assisting Canada in the
  preparation of documentation that forms part of
  this bid package. As Canada has taken the steps
  necessary to ensure the integrity of the bidding
  process, these third parties are not prohibited
  from submitting a bid. Bidders, in submitting a
  proposal for this requirement, acknowledge these
  facts and signify their acceptance of the
  process.

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The Washington Post, November 24, 2004

• Rumsfeld Druyun Had Little Supervision
• By Thomas E. Ricks
• Washington Post Staff Writer
•  
• Defense Secretary Donald H. Rumsfeld blamed an
  Air Force procurement scandal on high turnover in
  top management positions, which he said reduced
  the amount of adult supervision of major
  weapons contracts over the past decade.
• Cautioning that his view isnt yet definitive,
  Rumsfeld said at a Pentagon news briefing
  yesterday that he had recently been looking into
  the case of former Air Force acquisition official
  Darleen A. Druyun, who last month was sentenced
  to nine months in prison after admitting to
  granting favors in contracts to aerospace giant
  Boeing Co. before going to work there.

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Wall Street Journal, February 18, 2005

• Former Boeing Finance Chief Gets 4-Month Prison
  Sentence
•  
• Michael Sears, Boeing Cos. former Chief Financial
  Officer, was sentenced to four months in prison
  for holding improper job talks with Darleen
  Druyun, a former senior Air Force procurement
  official, while she still had sway over contracts
  involving the company.
•  
• Ms. Druyun, who also pleaded guilty, is currently
  serving a nine-month prison term at a
  minimum-security facility in Marianna, Fla.,
  after she admitted giving Boeing special
  treatment on billions of dollars in high-profile
  contracts while negotiating jobs for herself and
  family members.

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Roundtable Topic 1

• Responsibilities of vendors in regards to public
  servants
• Is the Code sufficiently clear in defining a
  vendors responsibilities?

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CBC News, September 12, 2005

• Inquiry Judge People Disgraced Themselves In
  Toronto Scandal
•  
• The judge appointed to probe a computer-leasing
  scandal in Toronto criticized participants for
  greed, mismanagement and lying.Justice Denise
  Bellamy investigated how a 40 million computer
  contract between the City of Toronto and MFP
  Financial Services swelled to over 100
  million.Some people disgraced themselves,
  failed in their duty to the City, lied, put
  self-interest first, or simply did not do their
  jobs, she wrote.In reference to testimony from
  the citys once powerful budget chief, Bellamy
  said that Tom Jakobek drifted from lie to lie in
  a performance worthy of Pinocchio, his phenomenal
  memory conveniently failed him about a cash
  payoff he had received from an MFP salesperson.

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CBC News, May 5, 2006

• Sponsorship Player Brault Sentenced to 30 Months
•  
• Advertising executive Jean Brault one of the
  key players in the federal sponsorship scandal
  was sentenced to 30 months in jail on Friday for
  defrauding the federal government. He admitted
  in March to filing bogus invoices for 1.6
  million for work of little or no value.

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CBC News, April 7, 2006

• Appeal Court Orders Coffin Jailed
•  
• The Quebec Court of Appeal has overturned the
  conditional sentence given to Montreal
  advertising executive Paul Coffin and ordered him
  to serve 18 months in jail for his role in the
  sponsorship scandal. A lower court had given
  Coffin two years less a day, to be served in the
  community, and ordered him to give lectures to
  university business students on ethics after he
  pleaded guilty to 15 counts of fraud involving
  1.5 million.

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CBC News, June 19, 2006

• Guité Sentenced to 3 ½ Years in Prison
•  
• Chuck Guité, the former civil servant who ran the
  federal sponsorship program, was sentenced Monday
  to 3 ½ years in prison for his conviction on
  fraud charges.

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Roundtable Topic 2

• Responsibilities of public servants
• Will the Code be broad enough so that public
  servants will be more accountable?

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New York Times, Friday February 23, 2007

• COMPANY NEWS AIR FORCE BARS DEALS WITH BOEING
  SPACE UNITS
•  
• The space units of Boeing were suspended by the
  Air Force yesterday from seeking military
  contracts after the Air Force concluded there
  serious violations of federal law in Boeings
  use of documents from Lockheed Martin to win a
  1.5 billion rocket contract. The Air Force also
  stripped seven launches from Boeings schedule,
  won in a 1998 competition to develop a rocket for
  military satellites. Our inquiry into Boeing
  found that they were in possession of thousands
  of pages of Lockheed Martin proprietary documents
  during the 1998 selection, Peter Teets, Air
  Force under secretary, said in a statement.

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Interim Administrative Agreement Between The
Boeing Company And The United States Department
of The Air Force

• Employees responsible to comply with Ethics and
  Business Conduct Program
• All employees to sign Employee Certification to
  comply with code of conduct
• Compliance Assessment Team to establish robust
  compliance processes
• Compliance Review Board to receive reports from
  Compliance Assessment Team and ensure risk areas
  identified, prioritized and followed up

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Interim Administrative Agreement Between The
Boeing Company And The United States Department
of The Air Force

• Promulgation of Marketing Policies and Procedures
• Issue a procedure on Procurement Integrity
• Ethics/Compliance Training Program for new
  employees
• Revision of offer letters re other companies
  proprietary information
• Boeing Law Department to conduct investigations
  of potential violations

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CanWest News Service, March 5, 2006

• The Scandal That Went Away
• An obscure government employee, Frank Brazeau,
  with Consulting and Audit Canada (CAC) suspended
  after contracting irregularities were uncovered
  by auditors for KPMG, including contracts
  improperly let to the family company of Quebec MP
  David Smith.
• Evidence of manipulation of procurement process,
  including apparent manipulation of evaluations,
  as well as evidence that in three cases
  contractors were directed to submit false or
  misleading invoices

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• PWGSC cancelled the two contracts handled by
  Smiths family company and dismantled the CAC
• It was discovered later by PWGSC that
• Smith and Brazeau were cousins and grew up
  together
• Brazeau secretary of Smiths Liberal riding
  association
• Evidence of contract-splitting found where
  bureaucrat found to have split a contract into
  chunks of 25,000 or less to avoid mandatory open
  competition
• Bureaucrats at CAC suspended and disciplined.

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Roundtable Topic 3

• Accountability of Vendors
• Should a vendor be held accountable for
  everything its employees do?

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Roundtable Topic 4

• Are there other issues not addressed in the
  proposed Code?
• Do you want to make submissions to PWGSC?
• http//www.pwgsc.gc.ca/acquisitions/text/cdccp-e.
  html

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Breaches of the Code

• What does this mean to vendors?
• Existing remedies set out in existing legislation
  and policies
• PLUS

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Breaches of the Code (contd)

• Failure to limit enquiries and communications
  during bid solicitation period solely to
  identified contracting authority
• may result in bid disqualification

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Breaches of the Code (contd)

• False certification of compliance with the
  requirements of the Code will be developed and
  implemented to include
• Bid inclusion
• Termination of contract
• Exclusion from future work
• Sanctions imposed in relation to severity of
  conduct

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Visit our website at www.governmentcontracting.ca
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• Thank you.
• Mr. Ron Lunau
• Ms. Phuong Ngo
• Ms. Catherine Beaudoin
• Gowling Lafleur Henderson LLP
• Tel [phone]
• Fax [phone]