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Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........)
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person A says we need to outsource a contract for some consultancy

they draft a tender and in to the deliverables they state that they need to have a number of meetings overseas and the winning contractor is to provide business class flights, 5 star hotels and a per-diem to all the clients employee's who are to go on the trip

companies submit bids

the person who wrote in the requirement to travel is a member of the team who evaluates the submissions along side the others who would go on the trip

Surprisingly the firm that offers the trips wins

Staff travel

Is this wrong?
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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [Andrewmc] [ In reply to ]
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Yes.
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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [jimatbeyond] [ In reply to ]
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Specifically what?

Is it a bribe? Inducement? Other?

I know it does not smell right but i can not specifically determine thr problem - aside from the enormous conflict of interest
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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [Andrewmc] [ In reply to ]
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Seems like a type of kickback to me.

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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [Duffy] [ In reply to ]
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I agree and thats because it is
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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [Andrewmc] [ In reply to ]
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In the end, the original company is the one paying for it because you know the bidding company added that to their price and then some. I would think that the CEO/Owner wouldn't be happy if they knew that they were paying more for services so their employees can get some high-priced vacations from it.

I'm not sure it is illegal, but it is certainly corrupt and unethical.
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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [Andrewmc] [ In reply to ]
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Is that standard of travel in line with your company's travel policy? If so, then no real issue, they've just got the contractor to cover the costs of what they would get anyway, though it's kind of daft as they'll recoup the cost somewhere in their tender so your company is still paying.

If your normal travel policy is lower end than that, then yes definitely corrupt. Personally I'd have it down as fraud - person A is effectively costing your company more in order to line their own pocket. Definitely something I'd report. I've submitted several hundred consultancy tenders in my time, I've had a few occasions where a potential client has subtly (or not so subtly) hinted that they're open to a bribe/kickback (never done it obviously), but never been asked to pay the clients expenses and if we were you can guarantee that we'd pad the price elsewhere to protect our margin!
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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [cartsman] [ In reply to ]
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No - historically the imaginary company used to allow staff to travel on business and provide either Business Class flights and 5 star hotels or allow you to encash them - that was the policy

then travel for business was MASSIVELY reduced such that most people lost the days they would travel each year and the opportunity to travel and / or the cash, so to circumvent it, it became standard to write it in to consultancy contracts - hypothetically.............

if this happened I'd be enraged and stewing on it.................
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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [Andrewmc] [ In reply to ]
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Hypothetically, if this happened I would take it straight to head of procurement or CFO, whichever is most likely to do something about it and least likely to already be aware of and turning a blind eye to it. Or use whistleblower hotline if there is one.

Not sure it is clear cut illegal enough to take to law enforcement.
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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [Andrewmc] [ In reply to ]
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If I'm reading what you mean correctly the answer is NO, it is not illegal.

So I'm clear, the company puts out a bid request to several firms for competition bidding. It has riders on it for flight, accommodations, etc., that must be met to qualify. Everyone that received a bid request got the same conditions and riders.

In that case it is simply a request for services and everyone had the same chance to bid.

If it occurred "under the table" in that the riders were not part of the contract and one bidder decided to sweeten the pot with the extras than that would not be so clear cut.

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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [Andrewmc] [ In reply to ]
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Andrewmc wrote:
person A says we need to outsource a contract for some consultancy

they draft a tender and in to the deliverables they state that they need to have a number of meetings overseas and the winning contractor is to provide business class flights, 5 star hotels and a per-diem to all the clients employee's who are to go on the trip

companies submit bids

the person who wrote in the requirement to travel is a member of the team who evaluates the submissions along side the others who would go on the trip

Surprisingly the firm that offers the trips wins

Staff travel

Is this wrong?

It's a conflict of interest, and unethical if it was a basis on which the decision was made. Depending on the industry, who the parties are, and what body of law applies, it might be illegal.
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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [Andrewmc] [ In reply to ]
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Who hypothetically reviewed the RFP before it went out?

At the company I work for, any RFP's have to be signed off by the COO and CFO, at a minimum, which means that they get seen by the relevant Directors (management, not Board) responsible for the area(s) impacted by the RFP. Not all work requires an RFP, but if it is big enough to require an RFP, then it is big enough that senior management want to know what is going on.

We are also subject to internal audit, external audit (2 different types), as well as corporate performance reviews.

No way any such requirement gets built into any contract we sign.

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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [Andrewmc] [ In reply to ]
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Is the site of the meeting where the actual contractual work be completed?

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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [Andrewmc] [ In reply to ]
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It comes down to company policy in my opinion.

When I worked for a big US company, we flew economy class for all domestic flights but on overseas flights we flew business class as a company policy. The premise was that we would go to work immediately upon arrival (and did on nearly every trip I went on), so business class seats allowed for us to sleep on the plane instead of sleeping in a hotel room at the location.

We stayed in business class hotels in all cases and received per diem at company approved rates on all travel with the rates set for overseas locations in line with the local prices. We paid for our own meals and the company paid consultants for transportation and meeting facilitation for overseas trips rather than simply dumping us in some foreign environment and that worked out very well.
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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [JasoninHalifax] [ In reply to ]
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And there is the rub..........

No one checks the rfp for content just the process........which is why its done.........hypothetically
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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [Billabong] [ In reply to ]
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Some of it. Also usually closer to peoples home or sites of good concerts (only partially joking)
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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [Andrewmc] [ In reply to ]
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It might very well be illegal in a country that has strong shareholder protection laws but regardless the audit department should be fired and replaced with something effective along with the RFP writer and review panel.
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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [AutomaticJack] [ In reply to ]
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AutomaticJack wrote:
If I'm reading what you mean correctly the answer is NO, it is not illegal.

So I'm clear, the company puts out a bid request to several firms for competition bidding. It has riders on it for flight, accommodations, etc., that must be met to qualify. Everyone that received a bid request got the same conditions and riders.

In that case it is simply a request for services and everyone had the same chance to bid.

If it occurred "under the table" in that the riders were not part of the contract and one bidder decided to sweeten the pot with the extras than that would not be so clear cut.

That changes things a bit. If it is situation A where everyone knows to bid the travel, then it is not illegal but would be subject to company policy on such matters and if against policy should get someone fired.

If it is situation B and under the table then it is likely illegal depending on the industry. I work in insurance, I could easily offer under the table perks to get people to go with me, but it is illegal in the insurance industry. I can't spend more than $50 per year on a client. So I might cover a round of golf and a beer or two for a client, but that is it.
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Re: Business Qeustion - Is this corrupt - would it be illegal (I think I know the answer but........) [Andrewmc] [ In reply to ]
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I'm sure the rules change completely if the Client is a government department. Utlimately the taxpayers are footing the bill for that travel.
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