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Ethical Business Practices – Engagement with Prime Contractors
Diane G. DempseyBAE Systems, Inc.
Intelligence & Security Sector
Overview
• Inaccurate Capabilities Statement• Deceptive Pricing• Employee Prostelization• Size Standard Misrepresentation• Gratuities• Incorrect Invoicing Practices
Size Standards
• Understand how size standards apply and use them correctly.
• Stating your company is small when it is actually large in the NAICS Code under which the work is being performing is grounds for suspension/debarment.
• Primes rely on self certification from SBs. If the size is misrepresented the result is TD.
Inaccurate Capabilities Statement
• Overstating capabilities is misleading. • Correctly state relationship – prime or sub –
both are of interest.• Listing agencies or primes as customers when
no work has been awarded.
Deceptive Pricing
• Services focused – providing rates but cannot provide resumes or staff to support the position. Buying In.
• Offering to fill slots at higher rates.• Products – upselling by offering ECNs or other
modifications that increase pricing. A higher priced product or service in lieu of what was initially proposed.
Employee Prostrolization
• Refer to your subcontract agreement: Both parties agree not to prostrolize – offer employment to the other parties employees (seduce/steal).• Government/LB/SB are all guilty of this
practice.• It undermines trust in the relationship.
Gratuities
• Understand the government and prime contractors policy related to gratuities.
• Prime contractors vary in their policy’s; however, it is important that a SB understand and abide by the policies.
• Not observing government or company policy can place a contractor on a suspended/debarred list.
Incorrect Invoices
• Understand and abide by your customer’s invoicing policies:– Review invoices for accuracy.– Only invoice for work performed or product
received.– Invoice in accordance with required format.– Submit invoices in a timely manner.
Summary
• Customers continue to do business with ethical company’s that provide quality products/services at competitive prices.
• A trusted subcontractor is a valued resource.• Ethical small businesses are the recipients of
good references.
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