Past meditations: www.johnnganga.org
J. N. N. Ng’ang’a – Meditations for the week of 10 – 16th December 2012
Integrity in procurement – Part 3
Day 1
Exodus 12:49
the same law applies both to the native-born and to the foreigner residing among you.”
Ephesians 4:28
Anyone who has been stealing must steal no longer, but must work, doing something useful with their own hands, that they may have something to share with those in need.
Remember we are looking at integrity in procurement. We have dealt with the first issue, why is it important to have transparent processes. Then we looked at, the differences and similarities between various ways organizations do procurement. We saw that when they give you a gift, they did not tell you it is a bribe. Like in the case of an anti-corruption officer who was given a donation but then when he allowed them to be prosecuted it became a bribe.
If You are involved in the tender board, When do you think a gift would be regarded as bribe, you just received gift but the giver knows he is trying to bribe you... for some , any gift and every gift from somebody you do business with is a bribe. But then you have a new dimension when it is an ongoing relationship…. It is somebody who normally services computers, and he has been servicing for the last five years. Then he meets you in town and decides your suit doesn’t look very clean. Why can’t he buy you a new suit? You have been so good to him. Then you go to the shop and you come out looking like you are going for a wedding. He is appreciating that the way this guy in computer department has dealt with him. I have earned may be two million shillings out of these operations, and a suit is only ten thousand. Then obviously, is he really bribing you? Surely, is he not just appreciating you. What do you think?
Day 2
Hosea 4:2
There is only cursing, lying and murder, stealing and adultery; they break all bounds, and bloodshed follows bloodshed
Gifts from an employer’s customer should belong to the employer. A gift from a client is a bribe if you don’t declare it to your boss and you keep it. If the person knows that the suit will be declared and taken to the company, is he likely to give you? As soon as he knows that the MD will discover that he gave the person in computer department a suit; that only will stop the suit from being bought.
So if you receive a gift and go and give it to the company, it will still be a bribe if the giver doesn’t know you did not retain it. So the next time they hear you are going to somebody else for computer supplies, they will say, ‘what an ungrateful young man this one is. I bought him a whole suit and he is going the wrong way! This is because he does not know that you never wore the suit, you gave it back to the company.
Would you agree with me that the critical thing is not just the returning of the gift but, for the client to hear you say, ‘thank you very much, I am handing this one over to the company’. In defining what the gift is, the person who matters is not you. You can be innocent, for no gift can influence you, but the other person assumes it can influence you. So that you, you thought the suit was a gift, him he knows it is a bribe. So the critical thing is not the view of the receiver as much as the giver. What does the giver think? Because if the giver thinks it is a bribe, they could easily ruin your reputation.
But the gift also becomes a bribe if you give me before the deal. But is it a bribe if he gives you after the deal. The trouble is not just the person coming to deal with you for the first time, but also the people who regularly deal with you. They have become friends and it is difficult to tell when a gift is a bribe. Is there any time a gift is not a bribe? Is there any time a gift is okay?
Day 3
Romans 2:21
you, then, who teach others, do you not teach yourself? You who preach against stealing, do you steal?
What about Tips?
In western countries, it is thought to be without manners for you not to give a tip. Because in the salary of the waiter, a tip is already assumed because in their culture, you don’t just pay the bill, you always pay the bill plus a tip. You talk to people who study abroad and normally raise their pocket money from working in those places, and they will tell you the tip is useful...
We are not discussing business where you are the only owner, we are discussing business where you are just an employee are a part owner. You see the difference? If you are the owner of a business, what is corruption becomes a very different issue. Even if you buy a suit for the client you will be stealing from yourself. If I am the owner for example, my mother can come to supply potatoes and they are the bad type. And I just decide to buy them because after all even the profit I would be making I share with her. So if she brings bad potatoes, my workers may complain but I insist, it is only my mother who is allowed to supply potatoes to my restaurant. But if I am not the one who has invested, and I allow my mother to bring the bad potatoes, and that way the customers leave the business, who is the loser? The owner. So an owner can deliberately crash his business and we will still not call it corruption, it is just foolishness. You must know the two are different. Corruption is where you are misusing your position to enrich another or enrich yourself.
A company can define corruption as any gift above the value of a meal in 4str restaurant. In other words it is the kind of value that is so low; nobody can be influenced by it. If you are a manager lunch cannot influence you, it is something you take normally. Anything above that value must be declared. The minute the suppliers know that you are going to declare, they never give you because they know it will affect their reputation in the tender board. When you write the gift policy, it is sent to all suppliers. And in the tender application document is a piece of paper called a statement of business principles. So in the end, if you have such a policy, the gift just disappears. However, they may not fully disappear. Now you pick a person carefully and say, this one looks the type that is poor. I will deal with him. He promises you he cannot declare. Then you give him a gift confidentially…
Can you bribe somebody earning something like a hundred thousand shillings with a lunch? Is there any possibility that if your salary is a hundred thousand that you will be taken for lunch and a contract of a million will be decided on the basis of that lunch? Is there a possibility? You have accepted to go for lunch. You could have discussed, in your office, but he wants you to discuss it in a less intimidating place. Is there likelihood that you will be bribed? Or alternatively over Christmas, you look for something appropriate to give them. You are trying to create a good relationship. However there still is an influencing motive. How come they stop giving these gifts once you change jobs? If they are our friends, why don’t they give us now? Friendship does not end when you stop giving them tenders. So you should continue giving them, even after they reject your tender you continue giving them. But if you check clearly, diaries go to people who are currently dealing with you or are likely to deal with you in future. So the intention is to create good working relationships, but you still need to watch out.
Day 4
Ephesians 4:28
Anyone who has been stealing must steal no longer, but must work, doing something useful with their own hands, that they may have something to share with those in need
If you want to have a lunch meeting, because a meeting is business, there is nothing wrong with a meeting, it only happens to be held in a restaurant. Must you refuse the supplier to pay the bill? Or can the supplier pay the bill sometimes, the customer other times? …
..
My view is, whether lunch is a bribe depends on whom the supplier is and it also depends on my salary. If I go out with somebody who has never gone to a restaurant of two thousand shillings lunch, it might be bribe. Also there is no way he himself would take you to such a restaurant except if he really wants to influence you. So it is no longer just food. But if I am in Hilton every other day and you say, can I have lunch with you at Hilton, in my mind I do not think anybody can be influenced by such a lunch.
That’s why it matters who is involved. For example, there is a restaurant in Mombasa called Tamarind. At Tamarind you get into a boat which takes you round the sea and you are back by the time you finish you diner. But then it is so expensive, the last time I went there, I told myself I need a sponsor to be back there. I think it was something like five times the normal meal in Nairobi. Since I don’t go there, if I take you there, I might be trying to influence you. So in my own mind the value of the lunch matters, not the value in terms of shillings only, value in terms of what can the giver afford how is his lifestyle? So I will accept some offers of lunch, and not others. I will think in terms of the person rather than just make a blanket, never a lunch.
Day 5
Zechariah 5:3
3 And he said to me, “This is the curse that is going out over the whole land; for according to what it says on one side, every thief will be banished, and according to what it says on the other, everyone who swears falsely will be banished.
What about giving commissions to your suppliers sales men. Some argue, you cannot get hotel business unless you look after the actual agent, not just the travel agency bringing the tourists. But you know the contract is not between the agent and the hotel, it is between the agency and the hotel. They commission per tourist was negotiated hard as they were pushed until they could not accept to pay a higher commission. Only for this same person who was refusing to give, now ends up paying more money but giving the agent, outside the contract terms. What do you think the owner of the travel business would feel if he discovered it? He is the one paying the rent of the travel agency offices, he really wanted the commissions to have been higher to his organization, and then he sees his employees getting ten thousand shillings extra. He can’t be happy. I can tell you whoever that travel agent is; he is corrupt and will be fired. It may be done by the whole industry, but that makes it a corrupt industry.
The agency has done a big job getting the tourist to Kenya, and then you pay them so little commission, only to pay their staff more. How do you know much salary they are already getting? If the agent is not corrupt, if the hotel is not corrupt show the extra commission to the owner of the business, he is the one to determine whether the agent goes with it or you.
So we still ask, is there a time a gift does not have the potential to influence? That’s the question we were dealing with. And so far we haven’t found any gift that cannot have potential to influence your decisions towards the giver. You know unfortunately we can’t look at the heart of the giver or receiver of the gift to verify if influenced... God will be okay with you when you receive the gift and you are not influenced. But what about us? We are going to suspect your decisions.
Back to the issue of accepting the gift but declaring it, as soon as the suppliers know that the matter will be known by management, they now can only give a person quietly, who will not declare. Even if you have a clean heart, you have no bad motive, but you are not very sure that the management of that company will not misunderstand you.
God wants you to be generous, give, but remember, the organization doesn’t want any of their staff to get gifts from clients. So they tell you, in our organization, we are not allowed to accept gifts, and any gifts you give me must be discussed in management. Tell me, even if you are anointed to give, will you want to be discussed in that place? In the end they misunderstand you and don’t give you any business.
Day 6
Judges 17:2
2 said to his mother, “The eleven hundred shekels[a] of silver that were taken from you and about which I heard you utter a curse—I have that silver with me; I took it.”
Then his mother said, “The Lord bless you, my son!”
Any organization that wants to manage integrity must set systems to assist their staff to practice integrity you cannot leave people to decide on their own how to avoid corruption.
Let me now help you to differentiate between a promotion and bribing. When it is a company strategy, that is because they are entering the market, computers that cost one million, will go for 0.8 million. It is called introductory offer. That is their question. That is a strategy the supplier has of giving gifts, and the gift is reducing the cost to the buyer. There is absolutely nothing wrong with discounts. You are helping the customer to reduce his cost. For example, you want to demonstrate your computers to your clients. You pay the flight for them to see the computer. They could have paid it but you pay. You are reducing their cost, although it is upfront. But even then the customer has better watch out that his independence in making his choice is not interfered with.
Yes, there is nothing wrong with discounts. However, any corrupting strategy stills remains corruption... Remember every bribe is a business strategy. In fact it will cease to be a bribe as soon as it ceases to be a business strategy. It is a bribe when it is a strategy. If your motive is to make this person give business to you instead to another, not on the basis of the value to him of what you are selling, but on issues extraneous to that, that really is a strategy which has corruption.
Remember even in procurement the basis of integrity is telling the full truth. You need to have the kind of ethics where you tell the truth as per Psalms 15, isn’t it? In Verse four, where David says the people who are on their way to heaven are people who tell the truth even when it hurts. You remember discussion on that verse?
Lack of genuineness, integrity, means you can continue saying you have integrity but it will not impact me. We are asking, what are the challenges of procurement? Where can you be tempted? Of course I told you this is a double edged sword because in telling you where you can be tempted, I could end up tempting you to cut corners in your procurement... I could be teaching you how to steal as I try to show you the loopholes we must close in procurement. But of course the intention is not to teach you how to steal; it is how to discover the people who are stealing. But since you didn’t know, you might also be tempted to do the same. No. The reason we spent so much time on the background is so that you structure the organization in order to reduce temptations for being unethical. How do you structure the organization so that even if somebody was tempted, it will not be as easy for him to fall into sin?
Day 7
2 Samuel 19:41-43
41 Soon all the men of Israel were coming to the king and saying to him, “Why did our brothers, the men of Judah, steal the king away and bring him and his household across the Jordan, together with all his men?”
42 All the men of Judah answered the men of Israel, “We did this because the king is closely related to us. Why are you angry about it? Have we eaten any of the king’s provisions? Have we taken anything for ourselves?”
Let us look at the temptations at each stage of the procurement process:
Business needs analysis
And you will remember we talked about this first stage, the idea of defining business need as the first stage to procurement. And we said one of the things you could do to favour your preferred tenderer, is over specification. This is a lock out specification, and the way you specify the item favours your supplier. So in the end even if everybody else quotes, there is no way they can win because right from the beginning you intended that guy to win by his product being the only one that meets your spec.
Market analysis
Then on market analysis, we talked about failure to do enough market analysis. You are asked who can supply pencils. Who else but Ng’ang’a? There is nobody else in Kenya who does pencils. When asked about another supplier: Oh, but I saw somebody who sells. You retort: Those are not pencils; they are things that look like pencils. So you create an impression only one person can supply your product or service…so you have single sourcing... That is corruption, which is lack of ethics because the truth is there are other supplies that you choose not to find out.
The problem may be laziness, where you do not bother to invest time in studying the suppliers’ market. So when the first guy comes, and you have never heard of another, you take his quote. So you are genuinely not really doing it deliberately but you genuinely believe there is nobody else because you are not investing time in studying the market.