Two Little Words

Integrity: possessing and steadfastly adhering to high moral principles or professional standards.

Transparency: quality of allowing light to pass through with little or no interruption or distortion so that objects on the other side can be clearly seen.

Okay, maybe these are overused words in the business ethics arena.  But they are words our business lives (or dies) by.  I would assume that yours does as well.  Four or five years ago we were approached by an organization to participate in a Native American Tribal 8(a) procurement partnering program.  While we did significant due diligence, at the time there was little and certainly no negative information about this team available on the internet, via the Better Business Bureau, or the state’s attorney general’s offices.  So we entered into an agreement that ultimately was exposed as a fraudulent enterprise on the part of  our prospective partners.  We were fortunate, because we recognized their deceptive practices about sixty days into the experience and made a very quick exit from the program.   Unfortunately not quite fast enough, as we did lose a little money and quite a bit of time in the process.

Why am I telling this story now?  Two reasons; first I learned that the perpetrator of the fraud was arrested on five major charges (grand theft and forgery) early last month.   Ordinarily, I don’t take pleasure in someone else’s misfortune though I am willing to make an exception in this instance. The second reason was a reminder of how vulnerable small diverse businesses can be to requests for MWBE procurement participation.  We all want to build relationships that will help us grow our business.  However, this desire can make us targets. In this case, we were approached with a terrific and perfectly legal opportunity. But once we realized that there was little transparency practiced by our supposed partners, we started to question their integrity.

We get approached all the time by firms who want us to partner with them because we’re a certified diversity business (WBE) in several states and with the federal government.  If your business is certified, you probably have or will hear from potential prime contracting organizations who want to engage your business to help them meet the supplier diversity goals in a particular proposal or contract.  This is technically tiered contracting, which we talked about  last November. Based on past experiences, we developed a list of questions that we use as a guideline to determine how we respond to these requests:

  • What is the Request for Proposal/bid number? Can we review the RFP?
  • What role does the requestor see our business fulfilling?
  • How does the request fit with our goals and objectives?
  • How forthcoming is the requestor? Does s/he willingly answer questions? Do they explain what they will provide in preparing the proposal?
  • Will we be able to build an on-going relationship with this potential prime?
  • What are the terms and conditions of the teaming agreement or memo of understanding? Are the terms reasonable?
  • Can we execute a confidentiality or non-disclosure agreement that protects the interests of all parties?
  • Will the potential partner share their references with us?
  • Will we have a relationship with the end client – at least enough to get a past performance evaluation of our services?
  • How will we get paid?
  • Are there negative reports on this prime with the Better Business Bureau or the state attorney general’s office?  (You can check in the state where the potential partner is registered and in the state where the work will be performed.)

What we learned from our experience centers around transparency. We have nothing to hide or keep secret from our teaming partners and we expect the same from them.

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2 Responses to Two Little Words

  1. Andrew says:

    The list of questions composed as a guideline above is a very good starting point for any business, regardless of economic or other disadvantaged status — even if the business is not considered one of those classifications. No one wants to be involved in a situation like the one you described, but especially those of us who are small businesses. Such a situation could very well be one that could put you out of business fast.

  2. Great post, thanks for sharing

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