Improper business practices in government

Research the web to create an essay explaining (improper business practices and personal conflicts of interest}. You can review the information in the resources section of the class to get a general idea of what to research. The research should be based on peer-reviewed articles located in the library.

Introduction

Government operations, although well intended often have conflicts of interest within their respective operations. This conflict often results from incongruent needs and demands on the part of law makers and those subject to the law. In addition, effort such as lobbying and other methods have allowed certain communities to skew government oversight and regulations to their favors. In certain rare instances, lobbying has created incentives that ultimately undermine the entire intention of a given law or regulation. This ultimately leads to improper business practices and personal conflicts of interest. Improper business practices typically result from a lack of government oversight and regulation. In addition, large amounts of bureaucracy can lead to further conflicts of interest. For example, large bureaucratic organization may not have an incentive to expedite the resolution of particular problems as their no incentive to do so. This creates a conflict of interest as the department simply wants to continue the status quo as oppose to innovating internally to make process smoother and more efficient. This recently occurred with the joint theater support contracting command and their inability to properly oversee their operations. This caused a large amount of fraud, waste, improper business practices, and conflicts of interest

Background

To begin, the joint theater support contracting command is a government organization designed to help reconstruct and revitalize areas ravaged by war or conflict. There mission is primary centered on economic development within foreign lands. Typically, due to conflict, many economies and business are ravaged. As a result, it is very difficult for economies to emerge due to litany of factors. First, due to conflict, many of the nations most talented individuals leave or flee the country. These individuals who are often doctors, lawyers, engineers, and so forth flee to safer countries who can reward them more than the country experiencing the war or conflict. What remains are many of the poorer and uneducated citizens in the civilization. These individuals are often unable to flee the country and in many cases are unwilling to do. This low skilled work force often does not have adequate capital or business acumen to reestablish businesses in an area ravaged by war. Likewise, the literature shows that foreign direct investment in these countries is particularly low due to the heavy risks associated with conducting business operations in the country. Here, the individuals with wealth, capital, and skills needed to redevelop the country has left and the overseas investors with capital are unwilling to deploy it in the country due to the risks involved. As a result, the joint theater support contracting command, was created to help bridge this cap between capital deployment and economic growth.

The literature however shows that the joint theater support contracting command is littered with conflicts of interest and improper business practices. Much of this is due to the very nature of the command itself. As a United States based organization, the command must use tax payer funds to hire foreign contractors to reconstruct a certain country. The activity is very prone to waste, fraud and abuse. This ultimately leads to conflict of interest and improper business practices. First, the literature has shown the government employees did not review contracts and contractor documentation properly. The literature also shows that contractors were not properly vetted resulting in contracts awarded to businesses who inflated their prices and used improper business practices. These improper business practices manifest themselves through incomplete work, inflated costs, and other forms of fraud.

A recent example of improper business practices within the joint theater support contracting command occurred in 2001. Here, the United States had appropriated more than $85.5 billion to the Departments of Defense, the U.S. Agency for International Development, and other U.S. agencies for reconstruction in Afghanistan. Here, the joint theater support contracting command was tasked with using funds for the establishment of security and development assistance projects (Brown, 2012). Due to the foreign nature of business activities and operations it was difficult to accurate police contractor data. In the case of Afghanistan, it was difficult for the joint theater support contracting command to properly oversee operation of contractors and their pricing. Here, operations were rife with improper business practices, as it difficult to properly ascertain contract prices in Afghanistan. This caused a litany of issues related to waste, fraud and abuse within the entire system. Foreign contracts, had incentive to raise pricing for contractors knowing funds will be backed by the United States government. The joint theater support contracting command also doesn’t know the best suppliers and contractors in the area due to the foreign nature of Afghanistan. As a result, contracts during this period were highly overstated and thus heavily influenced with fraud leading to improper business practices.

As the literature states, the Special Inspector General for Afghanistan Reconstruction conducted their own independent investigation of the agency. Here, the issues related to proper oversight and contract data began to emerge. Under the investigation, SIGAR found that JTSCC officials used inaccurate and incomplete data entry methods as it related to contractors in Afghanistan. This ultimately resulted in the C-JTSCC overstating its fiscal year 2009 contract obligations by about $2.6 billion (Otto, 2011). This billion-dollar oversight was the result of litany and issued related to the manner in which the joint theater support contracting command oversaw their contracting process. These issues were lack of proper data entry, inflated contract values on the part of Afghan contractors, lack of properly oversight of costs, and lack of technology integrity. For example, in the SIGAR report, the C-JTSCC reported more than $690 million in fiscal year 2009 contract obligations to Kabuljan Construction Company, when the actual value was $18 million. This contract overstatement was grossly inaccurate and much like many of the other contracts, resulted in large overstatement of obligations. In addition, according to SIGAR report, the C-JTSCC’s data included contracts that were made with non-reconstruction sources of funding because C-JTSCC’s contracting officials did not consistently record funding source information when entering in data into C-JTSCC’s data system. Here again, lack of proper oversight creates issues related to contract pricing and obligations. Typically, the joint theater support contracting command requires full completion of all documents, forms and check when awarding a contract. However, due to lake of oversight, SIGAR found nearly 6000 cases in which documentation was not completed properly. The documents were often missing critical information that was essential to awarding a particular contract. According to the SIGAR report more the funding source field was blank in more than 5,600 cases. Although contract documents are required to be complete and valid, C-JTSCC officials stated that funding source information was not always known when awarding a contract. This also calls into question the overall integrity of the contracts themselves. For one the joint theater support contracting command did not complete the information accurately nor did it review the documents correctly. This provided incentive for foreign contractors to inflate prices while also obfuscating other critical information within the documents themselves. As the SIGAR report notes, nearly $2.6 Billion dollars of contracts could have potentially been rewarded to parties with inaccurate, incomplete and occasionally fraudulent documents.

Literature Review and Findings

To begin the literature shows that the department of defense and by extension the joint theater support contracting command is heavily understaffed (Dessler, 2014) This understaffing has led to a litany of issues related to proper oversight and documentation with government agencies (Wheeler, 2017). Literature also shows that personnel cuts are likely to continue as the military shifts towards more automation and usage of technology (Hughes, 2017). The use of technology is ultimately being used to help reduced bloated overall cost structures while also making government operations much more efficient. These efficiencies are designed to help reduce government dependency on human capital and instead focus on automation and efficiencies. As a result, many agencies ranging from the IRS to the department of defense are having issues related to processing documentation correctly due to this transition. Further compounding the issue is improper oversight has led to administrative mistakes such a funding the Taliban indirectly through a contract awarded to an Afghan trucking company (Ariosto, 2017). This has ultimately led to improper business practices within the agency. These improper business practices were heavily related to a lack of oversight within the organization. Government employees were awarding and processing contract with incomplete documentation (Commission on Wartime Contracting in Iraq and Afghanistan, 2011). These contracts were ultimately inflating values, and resulting in large overpayments, bloated cost structures and incomplete reconstruction activities. Likewise, improper business practices have occurred outside the organization as well. Here, organizations used fraud and misleading documentation to obtain government contracts. This resulted in ineffective and inexperience contracts being awarded to individuals who were unlikely to perform the operation effectively. This ultimately resulting in undermining the very notion of reconstruction (Schwartz, 2013). Not only were contract being awarded to inefficient operators, those operators often didn’t complete the awarded contract. Others, used funds to continue to support illegal operations from the Taliban and other terrorist organization. This resulting is still further issues related to policy and government intervention within the country overall (Brown, 2012)