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FAIRNESS IN PUBLIC CONTRACTS.
Term Paper ID:25459
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Examines nepotism, corruption, cronyism, affirmative action, court decisions, impact on economics & quality, conflict of interest, examples.... More...
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Paper Abstract:
Examines nepotism, corruption, cronyism, affirmative action, court decisions, impact on economics & quality, conflict of interest, examples.
Paper Introduction:
This research will examine issue fronts concerning nepotism in the award of contracts or jobs in public administration. The research will set forth the background and context in which nepotism has emerged as an element of public administration and then discuss legal and ethical aspects informing the doling out of jobs and contracts by elected or appointed public officials to their relatives. The principal focus of research will be on small municipalities, but the connections between the vicissitudes of contract awards and other government practices and policies that entail competition for some kind of government funds can be seen in the wider area of affirmative action and minority-group grant and educational set-asides, as well as accompanying regulatory and bureaucratic apparatus.
The achievements of the American civil rights movement of the 1
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According to the editors ofa critical anthology of essays on the shifting cultural landscape ofAmerica in the 199 s in general, "It is one of the great paradoxes of ourculture that we believe passionately in the fundamental equality of all,yet strive as hard as we can to separate ourselves from our fellowcitizens."[i] Many of the de jure changes in minority access to opportunities inemployment, education, and contracting were initiated at the federal level,where accountability of the disbursement of public funds interpenetratedissues of the constitutionality of federally mandated leveling ofconstituency access to employment, housing, education, and federalprocurement contracts. Now, the price tag has ballooned to more than two billion dollars per plane, and the Air Force will get only 2 .[vii] Shenk does not confine analysis to the federal level but explains thatwell-entrenched bureaucracies in state and local governments can fostercorrupt, inefficient and costly contract awards systems that develop a lifeof their own: In states and cities, many public agencies were created in reaction to corrupt political machines, such as Tammany Hall in New York, that used municipal contracts to earn cash and political capital. In any case, the issue is really whether the contractorsor employees used by the government are meant to be relatives of the publicadministrators authorized to staff a project and whether the relativesenjoy an unfair advantage in obtaining contracts or jobs for the purpose. Martin's Press, 1995.Hass, Nancy, and Andrew Stern. Shenk cites the notorious 1995 scandal surroundingWilliam Aramony, head of the United Way charity, who was convicted offelony conspiracy, tax fraud, and money laundering and who was found tohave used thousands of United Way dollars for personal travel with andgifts to his girlfriend. To maintain the connections and a publicunderstanding of the value of a contractor or of a public employee,vigilance and oversight, aspects of strong and responsible management of apublic trust, appear to be necessary features of any project involvingexpenditure of public funds. Hostility to institutionally sanctioned contracting opportunities formembers of historically marginalized social and demographic groups appearsto have increased in recent years. Educational andemployment activities were also included in the bill. Which, then, isthe greater abuse of public trust: a nepotism contract awarded to aseasoned pothole expert or an equal-opportunity contract awarded to aninadequately trained road contractor? Smith et al.,quote Harriet Michel, president of the National Minority SupplierDevelopment Council in New York, to the effect that it is wrong tointerpret affirmative-action jobs and contract set-asides as "specialdollars put away for blacks, whether they're qualified or not. A race-based division is implied by this dialectical structure, butthat may be misleading. Commitment by public officials to one particularconception of administrative praxis, whether for or against privatization,for or against one kind of contractor or another, may be a useful mechanismof governance stability, but the evidence of New York City, Camden, NewJersey, and Atlanta, Georgia, is that the danger of structural andadministrative entrenchment is quite strong, to the degree the governmentapparatus separates itself from public accountability much as egalitarianAmericans nevertheless seek to distinguish themselves by somehow separatingthemselves from the whole. Wilkinson, and Marjorie Whigham-Desir,"A Disturbing Proposition," Black Enterprise 28 (January 1998): 54. [vi]Smith et al., 66. [xvi]Hass and Stern, 33. Mayor Webster has been unreceptive to private development projects that have tried to bring restaurants into the centre of town and revive the abandoned waterfront. More generally,as Hass and Stern note, during the 198 s there were "widely publicizedexamples of corruption in the bidding and administration" of contractsdescribed as efforts at cost-effective privatization of public services:"Cities learned that if improperly supervised, private companies tend todeliver their own brand of shoddy service. And he seems blind to the patronage that has flourished round the grants that have poured into the dying city over the past few years.[xii] The fact that Camden, New Jersey, has a population largely comprisingracial minorities rather complicates the fact of the ineptitude of publicofficials in the city. [xiii]"Affirmative Action: But Some Are More Equal Than Others,"Economist 15 April 1995: 22. "N.J. [iii]Ibid., 55. Theproblem with nepotism in government contracting is not that relatives ofpublic officials are not necessarily qualified to perform a given job butthat the potential for ignoring the results incentive seems exceptionallystrong. For example, in the state of Californiain 1996, a voter initiative called Proposition 2 9 was passed that bannedgovernment-sponsored affirmative action programs of all kinds, principallyin regard to education and government contracting. Clearly, as a matter of responsibleuse of public funds, the award should go to the more competent competitor.In other words, nepotism, which has the effect of excluding structures ofcontract procurement that entail affirmative action and equal opportunity,is a responsible policy for governments to undertake, far more responsiblethan working with unproven, unknown contractual entities. Advocates of affirmative action programs cite efforts by "right-wing politicians . This research will examine issue fronts concerning nepotism in theaward of contracts or jobs in public administration. "Privatization works best when there is competition, whenthere is consistent incentive to achieve results,"[xvi] Hass and Stern sayof that phenomenon. In typical fashion,the losing side in the election went to court to have Proposition 2 9overturned; however, in November 1997, the Supreme Court threw out thosechallenges, opening the way for "clone bills" of 2 9 in Washington,Florida, Colorado, Arizona, Ohio and Iowa.[ii] The concurrence of the Supreme Court in banning affirmative actionregarding government contracts represents a shift in judicial response toassertions by marginalized constituencies of de jure entitlement tocontracting opportunities by reason of long-standing de facto exclusiontherefrom. The achievements of the American civil rights movement of the 195 sand 196 s that were embedded into law and culture fostered an ethos of bothegalitarianism and competition between and among various political andsocial subconstituencies in the United States. Auditors Cite District's Waste, Nepotism." Education Week, 3 October 1996, 3."The Odd Couple." Economist, 1 August 1996, 23.Rains, Patrick. "Money and Success." Rereading America: Cultural Contexts for Critical Thinking and Writing, 3d ed., 447-5 . Thus, the real tests are what products or services the government andby extension the public good gets for the money and the degree to whichgovernment is seen to structure itself according to the preferences ofidiosyncratic interests in the private sector. That is becauseaffirmative action, reverse discrimination, and equal-opportunity ethoseach in its way contains the seeds of controversy and more, overtcontroversial discourse. As Smith et al., note, "for black women inparticular, public employment has been a forum for upward mobility."[iv] Adecline in public support for affirmative action protections implies atolerance for structures of public employment and public contracting thatwere in place before the imposition of equal opportunity laws. The relevant point is that the United Way isaffiliated with at least one government organization, the Federal EmergencyManagement Agency.[x] The issue of nepotism in the awarding of contracts and jobs in publicadministration would appear to set up a dialectic between equal,competitive access to contracting and employment opportunities by membersof formerly excluded social groups on one side and a habit on the part ofpublic officials of using relatives who deny competitive access on theother. [xiv]Ibid., 21. "The Buddy System: Political Patronage, Nepotism, Favoritism, Conflict of Interest." American City & County, February 1993, 28-3 .Shenk, Joshua Wolf. In 1996, the school district of Camden, New Jersey, was overwhelmed bya "bloated bureaucracy" that had awarded some $32 million in contracts orjobs to relatives and friends of officials of Camden's school district andadministration.[xi] Accusations of government waste were brought to thefore in part because of concerns that a school administration building wasin violation of safety codes and unsafe to occupy. [viii]Ibid., 2 . But privatization canbe interpreted as a proxy for services that the government, which is not in(say) the manufacturing business per se, would have to either see performedor perform itself. Bibliography"Affirmative Action: But Some Are More Equal Than Others." Economist, 15 April 1995, 21-23.Colombo, Gary, Robert Cullen, and Bonnie Lisle, eds. The principal focus of research willbe on small municipalities, but the connections between the vicissitudes ofcontract awards and other government practices and policies that entailcompetition for some kind of government funds can be seen in the wider areaof affirmative action and minority-group grant and educational set-asides,as well as accompanying regulatory and bureaucratic apparatus. "Nepots" whoexecute such contracts competently do less harm to the city's balance sheetthan a novice contractor whose award was based on equal-opportunity accessbut whose execution of contract mandates was incompetent. Inevitably,an element at issue in such an environment is the concept of public-sectornepotism, specifically government officials' hiring of or contracting withtheir relatives or the relatives of colleagues in preference over thegeneral employment or procurement-contracting pool. Whatever the source of opposition to government-mandated institutionalprotection of minority-population access to jobs and contracts funded bygovernment money, such protections have had beneficial effects on minoritypopulations in the recent past. Conflicts of interest have arisen that appear to demonstrate howeasily nepotism can emerge as the fundamental structure of governmentexpenditures: A black commissioner in Fulton county, which overlaps the city to the west, went to jail for telling white firms that he would vote against their zoning requests if they did not work with particular (black) firms. "The Perils of Privatization." Washington Monthly, May 1995, 16-23.Smith, Eric L., Deborrah M. But it is equally difficult to see how this confers an entitlementon the bidder. This, in turn, could have the effect of unfairly limiting the abilityof nonrelatives or noncronies to compete for jobs or contracts that theyare qualified to hold. The feature of free competition for governmentcontracts, i.e., that which does not tend to favor one contractor oremployee because of who someone is or whom someone knows, seems equallylikely to work best over the long haul for public-sector interests. "Psst, Wanna Buy A Bridge?" Financial World, 3 August 1993, 3 -35.Lawton, Millicent. Indeed, controversy lay in thebackground of the entire civil-rights period, before, during, and afterrelevant issues had been settled as a matter of law. [ii]Eric L. However, affirmative attentionto rules will not by itself end difficulties associated with assuringfaithful and competent execution of publicly funded contracts. They still have to meet the qualifications, there's stillcompetition even though it may be targeted to minority suppliers."[vi] There is also compelling evidence that contracts given to relatives ofpublic officials on one hand and exclusively to well established, wellknown contracting quantities on the other are not necessarily a bargain.This has been connected to the concept of privatization, or thegovernment's turning over to private contractors the production of goodsand services that the government formerly supplied. The de jure assertion of equal opportunity with respect to federallyfunded or supervised institutional activity did not end controversy overeither its concept or its implementation. [vii]Joshua Wolf Shenk, "The Perils of Privatization," WashingtonMonthly 27 (May 1995): 18. [xi]Millicent Lawton, "N.J. Similarly, in Atlanta, Georgia, according to theEconomist, a black old-boy network for public favours has arisen tosupplement the white one.[xiii] In the background of this 1995 analysis isAtlanta's anti-discrimination ordinance, which was enacted under themayoral administration of Maynard Jackson in the 197 s when minorities,comprising 5 percent of the city's population, accounted for only .5percent of city contracts.[xiv] Yet, as the Economist notes, since thattime, Atlanta's population has become 68 percent black. A commitment to ending nepotism that includes commitment to anenforcement of proved violations of fairness is one aspect of counteringabuses of municipal-procurement practices. The public often ends up paying exorbitant prices for inferior goodsor services that are sold not according to competitive bidding butaccording to well-entrenched government usage of known suppliers on anoncompetitive basis: The Defense Department--whose annual budget of several hundred billion dollars for contract spending is the largest of any federal agency--is the epitome of this contradiction. Damaging manifestations of race-based raft appeared during the rebuilding of Hartsfield airport, when Mr Jackson's widely praised minority business programme was corrupted into a scheme to benefit those with the right (black) political connections.[xv] It is difficult to see why well connected or even related contractorswho are competent and responsible in the execution of a public-serviceobjective should be barred from an opportunity to submit bids on a givenproject. Auditors Cite District's Waste, Nepotism,"Education Week 16 (3 October 1996): 3. [ix]Nancy Hass, and Andrew Stern, "Psst, Wanna Buy A Bridge?"Financial World 3 August 1993: 35. Over the years, such changes were in various waysadopted, imposed, or affirmatively enacted at state and local levels, aswell as in institutions that were subject to federal regulation or werepublicly accountable owing to their status as recipients of federal funds.Such terms as "affirmative action," "minority set-asides," and "equal-opportunity employment," together with bureaucratic oversight andenforcement mechanisms on one hand and politically charged discourse on theother, entered the American public-administration culture decisively andpermanently as a consequence of the changes. [to] attack programs designed to achieve parity andeconomic empowerment"[iii] for racial and socioeconomic minorities. . With their monopoly guaranteed, contractors could ignore what the public really wanted.[viii] The result in New York was that two major waste disposal contractorswere found to have engaged in a process of price-fixing and rigging bidsand were obliged to pay $5 million in fines as a result. [x]Ibid. Wilkinson, and Marjorie Whigham-Desir. On theother hand, in 1996 the cities of Houston, Texas, and Boston,Massachusetts, voted to let affirmative action programs remain in place. (Boston: Bedford/St. [iv]Ibid. High-profilechallenges to a whole range of de jure concepts, from affirmative action toequal opportunity, introduced such concepts as reverse discrimination intothe discourse and practice of public administration. "A Disturbing Proposition." Black Enterprise, January 1998, 54-66.----------------------- Notes [i]Gary Colombo, Robert Cullen, and Bonnie Lisle, eds., "Money andSuccess," Rereading America: Cultural Contexts for Critical Thinking andWriting, 3d ed. Rains raises the question of whether municipal-government vendors aremore likely to be awarded procurement contracts based on whom rather thanwhat they know, concluding that the weight of evidence is on the side ofthe view that nepotism persists as a principal abuse of contractingpractices with regard to providing services to government at the level ofboth federal and municipal procurement.[v] While calling for reform, Rainsindirectly acknowledges that familiarity with public-sector contract-administration practices is a rather crucial component of the procurementprocess at both federal and local levels. Boston: Bedford/St. But such an analysis, while not entirely misleading, is incomplete fortwo reasons. He bitterly denounces the state's intervention as "political". [xv]Ibid., 22. In other words, one approach toreform would be a project of leveling access to the playing field ofprocurement information, which experienced, and especially well-capitalized, contractors perforce have but which novice contractors maynot. Smith, Deborrah M. Contracts that looked cheaperwound up costing more."[ix] In other words, privatization developed a lifeof its own and degenerated into public disservice. In the first place, advocates for government-mandated public-sector contract and employment competition point out that nothing aboutaffirmative-action or minority set-aside procurement structures entitlesthe unqualified employees or contractors to public subsidy. The state of New Jersey was threatening to take over cityadministration partly because of what London's Economist traced tostructures of municipal cronyism and mismanagement of the city budget: Although it is decades since Camden, once the home of Walt Whitman, had the charm and energy which made it "the biggest little city in the world", the recent collapse holds some lessons for other cities. The accusations hadsurfaced in the early 199 s, when Camden, which is geographically adjacentto Philadelphia, Pennsylvania, was reportedly in a pattern of failing toreinvigorate its city center. . The $65 billion B-2 bomber contract with Northrop, for example, was expected to yield 13 of the stealth fighter jets. But that'snot true. [xii]"The Odd Couple," Economist 1 August 1996: 23. [v]Patrick Rains, "The Buddy System: Political Patronage, Nepotism,Favoritism, Conflict of Interest," American City & County 1 8 (February1993): 28-9. The research will setforth the background and context in which nepotism has emerged as anelement of public administration and then discuss legal and ethical aspectsinforming the doling out of jobs and contracts by elected or appointedpublic officials to their relatives. Martin's Press, 1995), 448. Attempts to eraseaffirmative action contracting guidelines would appear to be an importantmechanism for reinstating the benefits of nepotism and calling a halt togovernment-subsidized upward social and economic mobility of members ofoutgroups by calling a halt to mandated opportunities to compete forsubsidy. The fundamental analysis ofgovernment goods and services structured around nepotism and its close allycronyism is how appropriately such structures function for the public good. Another problem with inequitable and noncompetitive contract andemployment awards that are funded by government sources is the issue ofconflict of interest, which seems almost inevitable in situations whereindividual, corporate or, indeed, administrators of public entities haveaccess to public money.
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