Labels and Tags

Accountability (71) Adequate documentation (7) ADR in procurement (4) Allocation of risks (6) Best interest of government (11) Best practices (19) Best value (15) Bidder prejudice (11) Blanket purchase agreement (1) Bridge contract (2) Bundling (6) Cancellation and rejection (2) Centralized procurement structure (12) Changes during bid process (14) Clarifications vs Discussions (1) Competence (9) Competition vs Efficiency (29) Competitive position (3) Compliance (35) Conflict of interest (32) Contract administration (26) Contract disputes (4) Contract extension or modification (9) Contract formation (1) Contract interpretation (1) Contract terms (3) Contract types (6) Contract vs solicitation dispute (2) Contractor responsibility (20) Conviction (4) Cooperative purchasing (3) Corrective action (1) Cost and pricing (13) Debarment (4) Determinations (8) Determining responsibility (37) Disclosure requirements (7) Discussions during solicitation (10) Disposal of surplus property (3) Effective enforcement requirement (35) Effective procurement management (5) Effective specifications (36) Emergency procurement (14) eProcurement (5) Equitable tolling (2) Evaluation of submissions (22) Fair and equitable treatment (14) Fair and reasonable value (23) Fiscal effect of procurement (14) Frivolous protest (1) Good governance (12) Governmental functions (27) Guam (14) Guam procurement law (12) Improper influence (11) Incumbency (13) Integrity of system (31) Interested party (7) Jurisdiction (1) Justification (1) Life-cycle cost (1) Limits of government contracting (5) Lore vs Law (4) market research (7) Materiality (3) Methods of source selection (33) Mistakes (4) Models of Procurement (1) Needs assessment (11) No harm no foul? (8) Offer & acceptance (1) Other procurement links (14) Outsourcing (34) Past performance (12) Planning policy (34) Politics of procurement (52) PPPs (6) Prequalification (1) Principle of competition (95) Principles of procurement (25) Private vs public contract (17) Procurement authority (5) Procurement controversies series (79) Procurement ethics (19) Procurement fraud (31) Procurement lifecycle (9) Procurement philosophy (17) Procurement procedures (30) Procurement reform (63) Procurement theory (11) Procurement workforce (2) Procurment philosophy (6) Professionalism (17) Protest - formality (2) Protest - timing (12) Protests - general (37) Purposes and policies of procurement (11) Recusal (1) Remedies (17) Requirement for new procurement (4) Resolution of protests (4) Responsiveness (14) Restrictive specifications (5) Review procedures (13) RFQ vs RFP (1) Scope of contract (16) Settlement (2) Social preference provisions (60) Sole source (48) Sovereign immunity (3) Staffing (8) Standard commercial products (3) Standards of review (2) Standing (6) Stays and injunctions (6) Structure of procurement (1) Substantiation (9) Surety (1) Suspension (6) The procurement record (1) The role of price (10) The subject matter of procurement (23) Trade agreements vs procurement (1) Training (33) Transparency (63) Uniformity (6) Unsolicited proposals (3)

Sunday, June 27, 2010

Determining responsibility by algorithm

Old movies, such as the Jimmy Stewart, "It's a Wonderful Life", give the impression that in the olden days, to get a loan from your bank, you didn't have to submit any paper work. The banker knew you or he didn't. If he knew you were responsible, you could get a loan, and if not, you didn't.

I'm old enough to remember days similar to that. To do business with a bank, you got to know the banker. Banks in those days spoke about "relationship" banking. For the most part, those days have gone the way of black and white film. Today, regardless whether you know the local banker, you have to fill in all the forms and tick all the boxes for the far-away clerks, accountants and regulators.

In large procurement regimes, unlike Guam and other municipalities, where generally the contractors tend to be local and known, the matter of determining contractor responsibility has less informal and more tick the box. In large procurement regimes, it would be rare for the government to have the circumstances where it could dispense with an inquiry into contractor responsibility.

Smaller procurement regimes, however, might often be able to avail of the Comment to ABA Model Procurement Code § 3-401, which says, "the inquiry is not required in every case. The extent to which a review or investigations should be conducted will depend on ... the bidder's or offeror's past record of contract performance in the public and private sectors."

The US Federal government procurement regime has gotten so huge and impersonal that it often cannot even determine responsibility despite all the boxes that get ticked, and believe me it requires a heap of box ticking.

So now it is turning to the associative reasoning and crowd computing of algorithms used by marketing, debt collection and terrorist tracking agencies to evaluate whether a named contractor is responsible, because the named contractor does not always belie the past record of performance of the real contractor.

The new high-tech weapons against fraud
When a federal agency checks the General Services Administration's list of suspended or debarred contractors to prevent those companies from getting government work, it's only uncovering one piece of the puzzle.

A company can change names and owners, acquire a new business registration number through the Data Universal Numbering System — DUNS, for short — and appear to the agency as an entirely new business.

"If you get debarred from federal service, all you've got to do is ask your wife to open a company, get a new DUNS number and you're back in business," said Douglas Hassebrock, assistant director of investigations at the Recovery Accountability and Transparency Board, at a government conference in April. The board is responsible for ensuring that Recovery Act money is spent properly.

The Recovery Board knew it needed to close such loopholes to prevent fraud, waste and abuse as the government paid out $275 billion in contracts, grants and loans through the Recovery Act, which Congress passed in early 2009 to help stimulate the economy.

It turned to a software platform from Palantir Technologies, based in Palo Alto, Calif., to help accomplish the task. The software tool analyzes information contained on various government-maintained databases — GSA's list of suspended or debarred contractors, the Treasury Department's financial crimes network and other law enforcement records — along with open-source data such as newspaper articles, lawsuits and other public documents.

By viewing these data in a more holistic way, analysts at the Recovery Board can draw connections between individuals and companies that might not be apparent otherwise.

Similar tools are used by intelligence agencies to track terrorists and by credit card companies for fraud detection and prevention. But this is the first time a federal agency has deployed such a tool to track government spending, said Earl Devaney, chairman of the Recovery Board.

"These are tools that the IG community has never used before and quite frankly, they're using it now and I think they would all say to their great benefit," Devaney said in an interview
.

No comments: