Last week , the Procurement Insights European Union Edition was one of the very first blogs to report on the news that the Minister of Justice Chris Grayling had announced that the Serious Fraud Office (SFO) had been called in to investigate G4S and Serco. Grayling indicated that there was evidence that both companies had overcharged the UK government by 10s of £millions for contracts related to tagging criminal offenders.
As the news of the investigation began to spread globally, the Obama Administration announced that they had awarded a contract worth as much as $1.2 billion to a British company to help them sift applications for health insurance and tax credits under the new health care law. That company is Serco.
This apparent disconnect in contracting sensibilities led me to seek out Andy Akrouch who is the President of the Centre for Relational Outsourcing and Strategic Management.
Similar to the questions raised in Canada relating to the SNC-Lavalin scandal as a result of the introduction of this government’s new integrity policy, which stipulates that “companies can be blocked from bidding on government contracts if the company or one of its directors has been found guilty of offences such as fraud, bid-rigging, money-laundering, tax evasion, bribing a foreign official, drug dealing or being involved with organized crime,” one wonders if it is fair to penalize an entire organization for one or two bad apples.
For example, with the Canadian policy, “Companies can escape the provisions of the federal government’s tough new integrity policy for procurement if an official under a cloud leaves the company before conviction.”
Even if you are inclined to accept this sifting of the bad apples to preserve the entire barrel approach, an even bigger question that needs to be answered is how something like what happened at SNC-Lavalin as well as with G4S and Serco in the UK, could occur in the first place? This is where Akrouche’s insights come into play.
The following is from a comment that was posted by Akrouche relating to the July 11th, 2013 article BREAKING NEWS: Evidence of fraud on the part of government suppliers G4S and Serco reported by Minister of Justice by Colin Cram:
First let me say that in no way I would attribute this behavior to G4S/Serco company policy or to a management directive. Colin is the expert on this, but I would assume this is always done by individuals who do not conform to policy, ethics and good governance. I would suspect that there many more instances and cases similar to this than we know. We just simply don’t know and had no way of knowing.
Why am I not surprised by this? Until the SRS Relational model came along, public sector organizations structured business arrangements as deals or transactions and employed layers over layers of oversight to manage these contracts. This UK- Serco-G4S finding confirms what we have been saying all along that it is not possible to achieve optimum contract performance and minimize risk (all risks including fraud risk) by means of oversight mechanisms only. The only real way you can truly mitigate risk is via insight.
Insight, however, is gained through shared purpose, active management, joint governance and open book financial management framework. It also means that we employ different methods of sourcing and managing these contracts – relationship based methods. I just finished delivering a two-day course on relational contracting and had extensive dialogue with public sector leaders on exactly this same issue. The Relational Model OBF provides the means for complete financial transparency and accountability in the management and effectiveness of funds throughout the entire relationship life cycle.
What are your thoughts regarding Akrouche’s comment? Are events such as what happened with SNC-Lavalin here in Canada and G4S and Serco in the UK going to serve as the impetus for changing the way in which government contracts and related risks are managed?
Finally, and perhaps this is the most important question as it can certainly fuel the desire to make any necessary changes to the contract management process ̶ should companies who are under investigation for fraud be allowed to bid on government contracts both domestically as well as internationally?
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Procurement Insights 
david13
November 15, 2013
WHO CONTROLS SERCO ?
https://en.wikipedia.org/wiki/Serco_Group
SERCO IS WELL CONNECTED WITH THE BRITISH ROYAL FAMILY.
1) ” And in their spare time Serco organises the Queen’s flights around the world and makes sure that Greenwich Mean Time is ticking over nicely.”
” SERCO has a hand in flights made by almost every passenger from the Queen and Prince Charles to ordinary holidaymakers. It supports the Ministry of Defence at RAF Northolt, the base of the Queen’s Flight and which is regularly used by Prince Charles. ” http://www.mirror.co.uk/news/uk-news/so-you-thought-it-was-tony-and-gordon-in-charge-580043
2) ” Mr. Alastair David Lyons, CBE., is Non-Executive Independent Chairman of the Board of Serco Group Plc.”
” He was awarded the CBE in the 2001 Queen’s Birthday Honours for services to social security. ”
http://markets.ft.com/research/Markets/Tearsheets/Directors-and-dealings?s=SRP:LSE
3) ” Christopher Rajendran Hyman CBE (born 5 July 1963 in Durban, South Africa)[1] was Chief Executive of Serco Group plc from 2002 to October 2013.”
” Hyman was appointed Commander of the Order of the British Empire (CBE) in the 2010 Birthday Honours for services to business and charity.”
https://en.wikipedia.org/wiki/Christopher_Hyman https://en.wikipedia.org/wiki/Commander_of_the_Order_of_the_British_Empire
http://www.telegraph.co.uk/news/uknews/honours-list/7822829/queens-birthday-honours-the-full-list.html
THE BRITISH ROYAL FAMILY IS A FRONT OF THE ROTHSCHILDS.
” Lord JACOB ROTHSCHILD, the behind-the-scenes controller of the Inter-Alpha Group, was a partner at Rothschild at the time he set up the Inter-Alpha Group in 1971, using its resources and then leaving in 1980 to continue his special mission, which includes advising the genocidal British Crown and managing the funds of Prince Charles’ Duchy of Cornwall, to finance his kooky, “green” schemes.”
http://unitednationsoffilm.com/?p=1728
” Prince Charles already played polo with EVELYN DE ROTHSCHILD in his student years and later set up the Interfaith consultations with him. ”
http://www.gnosticliberationfront.com/people_with_the_endless_bios.htm
EVELYN DE ROTHSCHILD ” In 1989, he was knighted by Queen Elizabeth II,[2] for whom he serves as a financial adviser. ” https://en.wikipedia.org/wiki/Evelyn_Robert_de_Rothschild
THE BRITISH ROYAL FAMILY HAS THE CONTROL OF THE ROYAL BANK OF SCOTLAND. http://www.mirror.co.uk/news/uk-news/prince-charles-dumps-rbs-boss-372885
BUT THE ROYAL BANK OF SCOTLAND IS RELATED ALSO WITH THE EDMOND DE ROTHSCHILD OWNED BY BENJAMIN DE ROTHSCHILD ( https://en.wikipedia.org/wiki/Benjamin_de_Rothschild ) AND BY HIS WIFE ARIANE DE ROTHSCHILD ( https://en.wikipedia.org/wiki/Ariane_de_Rothschild ).FOR EXAMPLE THROUGH THE PERSONS OF LAURA SCOLAN AND MARK PHILLIPS,ETC..
http://www.linkedin.com/pub/laura-scolan/a/ba1/7b7 http://www.linkedin.com/pub/mark-phillips/4/5b9/772 http://www.lejdd.fr/Economie/Images/Les-plus-grosses-fortunes-de-France/Benjamin-de-Rothschild-206941
http://wikimapia.org/6825620/fr/Chateau-de-Pregny http://www.panoramio.com/photo/77169200 https://en.wikipedia.org/wiki/Waddesdon http://www.waddesdon.org.uk/ http://www.thefullwiki.org/Waddesdon_Manor http://www.thefullwiki.org/Ascott_House http://www.breathingenglishair.blogspot.fr/2012/04/ascott-house-buckinghamshire.html
BUT THERE ARE MANY OTHER LINKS BETWEEN SERCO AND THE ROTHSCHILDS………..
Meet Serco, the private firm getting $1.2 billion to process your Obamacare application
http://bullionbullscanada.com/bulletin-boards/21-geopolitcal-news-talk/28152-meet-serco
Serco has seen a large amount of criticism involving its private prisons and detention centres. In particular, the Union of Christmas Island Workers has said about the Christmas Island detention centre, which hosts many refugees as well as 1,000 children who have tried to immigrate into Australia, “Serco’s failure to perform is huge.” Serco has been accused of beating prisoners, not adequately maintaining their physical and mental health, and allowing suicide and self-harm incidents to increase over time. Australian ombudsman Allan Asher said to the Australian radio show AM, “In the first week of June when I visited Christmas Island, more than 30 incidents of self harm by detainees held there were reported.” Serco, in a company memo leaked to The Australian, blamed the detainees for “creating a culture of self harm,” and using it as a “bargaining tool.” Serco has been fined for breaches of contract every month it has managed detention centres in Australia, leading to a total of $4 million in fines in early 2011. Also, Serco’s Christmas Island detention center was reported by its own former manager to be “typically 15 staff members short every day.”
Serco has also gained criticism for its inefficiency in its pathology labs. Its laboratories in St Thomas’ Hospital saw an increase in the number of clinical incidents, such as patients getting inappropriate blood when their medical history was not flagged by the system or patients’ kidney damage results being calculated incorrectly. A Serco employee later revealed that the company had given false reports to the National Health Service 252 times over its medical services in Cornwall.
In September 2013, Serco was removed for consideration in a contract in Ireland because of its involvement in a multi-billion pound fraud in Britain.
In September 2013, Serco was accused of covering up extensive sexual abuse of immigrants at its Yarl’s Wood prison in Bedfordshire, England. en.wikipedia.org/wiki/Serco_Group
http://www.telegraph.co.uk/news/politics/10272109/Serco-staff-investigated-by-police-over-prison-van-fraud.html
http://uk.news.yahoo.com/serco-vows-fix-british-government-contract-woes-071634299.html http://dearkitty1.wordpress.com/2013/08/23/british-children-ill-treated-in-private-jails/
http://dearkitty1.wordpress.com/2013/05/14/british-serco-private-prison-scandal/
piblogger
November 15, 2013
Thank you for your comment David. I appreciate the depth of your research into the subject and the provision of reference links.
colincram
November 15, 2013
I struggle to imagine that any member of the Serco board would sanction fraud. However, it may be that the company did not change adequately its structure, governance and processes in line with its rapid growth. The same may be true also of G4S. If any fraud was committed, my guess it was at the upper middle/lower senior level and it would be interesting to see if the system of remuneration in Serco could have tempted someone (or several people) to ‘overlook’ people leaving the tagging system. In other words, was there an act of omission rather than commission?
One issue that the Serious Fraud Office will need to address is why was the Ministry of Justice so slow in picking this up. I am not suggesting that there was any corruption within the ministry. However, what was wrong with the contract or contract management that led eventually to a criminal investigation of Serco?