Consider the City of Toronto. A $43 million lease for computers ended up costing $86 million. The City launched a judicial inquiry which lasted 2 years, had 214 hearing days, reviewed 124,000 pages of documents, heard from 156 witnesses, and involved more than 60 lawyers.

Justice Bellamy’s report provided a volume on good governance. She issued more than 100 recommendations for procurement reform (which can be applied to most places). Three of my favorites are: Recommendation #130- Keep politicians out of procurement. Recommendations #146 – Always have competition for contracts. Recommendation #166 – “For major, high-risk controversial or complex tenders, the City should consider retaining a fairness commissioner.”

This was followed up by the City of Toronto’s Staff Report dealing with the Feasibility of Using Fairness Consultants for Certain Procurements. This 21-page report provides solid information on the roles and responsibilities of fairness commissioners, monitors and auditors. It also summarizes the use of fairness consultants in other jurisdictions.

For a high level view of this scandal:
http://en.wikipedia.org/wiki/Toronto_Computer_Leasing_Inquiry

For Justice Bellamy’s Report.
(Read about bribery, officials ‘for sale’, and a great set of best practices for public procurement.)

For City of Toronto’s Report. 

Consider the federal government. The Sponsorship Scandal involved significant political interference in the awarding of large contracts. Justice Gomery found:

“a veil of secrecy surrounding the administration of the Sponsorship Program and an absence of transparency in the contracting process;

“the existence of a ‘culture of entitlement’ among political officials and bureaucrats involved with the Sponsorship Program, including the receipt of monetary and non-monetary benefits;

“reluctance, for fear of reprisal, by virtually all public servants to go against the will of a manager who was circumventing established policies and who had access to senior political officials.”

And, in his press conference on Feb. 1, 2006, he stated “what is really needed is a culture change aiming to foster, what one of our respondents called, a culture of integrity”. Well, most procurement professionals knew this. On a day to day basis, they promote integrity, fair and open competition, and ethical behavior. This was not news to the thousands of procurement people in our federal, provincial and local governments.

For a high level view of this scandal:
http://en.wikipedia.org/wiki/Gomery_Report#First_report

The Gomery Commission Report, Phase 2.

Other Scandals

 FAA CONTRACTING OFFICER INDICTED IN PROCUREMENT FRAUD CONSPIRACY

• Encyclopedia of Ethical Failure - The Encyclopedia is published by the Department of Defense and it summarizes "real examples of Federal employees who have intentionally or unwittingly violated the standards of conduct". While the entire publication is 110 pages long, only a small number of cases involve procurement; and few involve procurement officials. We have extracted and reprinted (without editing) many of the procurement cases in Issue 54 of The RFP Report.
  
• Red Tape Sours Bakers – This article describes the plight of a public agency in California that issued an RFP “If red tape were edible, the folks over at the Santa Clara Valley Transportation Authority would be feasting in style. Awhile back, the authority put out a bid for the estimated $2,000 worth of cakes and pastries it serves up at office parties every year.”
  
  Click here to read the article from the San Jose Mercury News.
  
  Click here to read the article from the San Francisco Chronicle.
  
  Click here to see the 33-page RFP