A news piece on a Safeway Inc. Purchasing manager pleading guilty to receiving bribes in exchange for “steering contracts for processed tomato products to SK Foods rather than industry competitors” caught my eye today. According to the article, Michael Chavez of Fremont, California faces up to 20 years in prison and a $250,000 fine. While Chavez may not get the maximum penalty, it is wonderful to see that receiving kickbacks is a) getting big attention, and b) resulting in some very serious consequences.
Kickbacks have long been the bain of the procurement profession. I remember in the ‘80s talking to a sheet metal shop owner in New England area who said that he avoided working with old-timers in procurement because so many demanded something on the side. I’ve seen other evidence of problems throughout my career.
Perhaps it goes without saying that strategic sourcing solutions can help with this problem – I doubt that Mr. Chavez had the sort of nice, auditable history of competitive bidding and award rationale – like a strategic souring application offers – to document his indiscretion.
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