Myth: Vendor Overcharges To Government (Part 5)

Posted on May 8, 2013. Filed under: Journalism | Tags: , , , , , , , , , , , , |

9th in the series The Manipulators

Today’s proverb Alas, GEORGE DIDN’T DO IT!

Your words for the day:

  • scapegoat = one too helpless to defend itself, often by reason of circumstance
  • witch hunt = the search for a scapegoat
  • not my job, man = the universal escape clause — unstated, but, inherent — in every assignment of responsibility
  • consolidation = getting your shi…   uh, shituff…   your shtuff… getting your shtuff together for maximum personal benefit

US Communities (see previous post) DOES NOT consolidate orders for the signed-up members to the contract.  US Communities DOES NOT verify shipments from the vendor to the buyer at the receiving dock;  US Communities DOES NOT check the invoices against the receiving documents before the buyer pays them.

Per US Communities, they do complete regular 3rd party audits to “guarantee” adherence to that so-called contract, but…

  • IF THAT IS SO, how does one explain that 4-year gap gleefully filled by the City Auditor in seeking (job-enhancing?) retro-active rebates for his employer, the City of Houston?
  • And, IF THEY DID, then US Communities was satisfied that Office Depot was in compliance, which means that Dangerous Dave the City Auditor, is off-base with his assertions.

This is what happens when you expect George to do it:

  • You get that “self-promoted” extra cook hanging out in the kitchen pretending to “adjust” the existing recipes;
  • You get a vendor diligently watching his discount principle; delivery cost for a $64.00 order is the same as that for a $640.00 order.  That vendor will not be receptive to discounts — 300,000 times — for $64.00 orders.
  • You get a department full of watchdogs (a.k.a., bureaucrats) going on a full-time coffee break because they are quite content to LET GEORGE (the pretend cook hanging out in the fully staffed kitchen) DO IT.
  • You get department heads thinking they’ve bought a cure-all for government over-spending (without expending the effort they are being paid to expend) and underlings who think they’ve been given a garlic wreath to prevent ACTUAL WORK from sucking all the fun out of a bureaucrat’s vacation time — you know, that 9-5 daily time frame for which they are being paid TAXPAYER MONEY.

In reality, all that the bureaucrats have procured is a giant container of Dr. Feel Good’s Industrial Strength Cure All — snake oil in a much simpler time.

“Let George Do It”  is a very bad business practice.  But, apparently quite compatible with guv’mint ops, an undertaking that should be run like a business; however, it is handicapped by being staffed with politicians and toady bureaucrats.

I am totally perplexed.  When I was buying expendables for my employer, the greater the quantity I purchased, the cheaper the unit price per item became.  You buy one, you pay $5.00 per item; you buy a dozen, you pay $4.50 each; you buy a gross, you pay $3.00 per item.  I guess that is what they mean by “volume discount.”  Surely, an organization as pervasive as government with staff layered upon staff of taxpayer-paid professionals, with a hundred departments ordering the same items on a recurring basis, would have at least one manager who would understand the term “consolidation” and the financial benefits that result from it.

EVERY VENDOR GIVES VOLUME DISCOUNTS BY THE ORDER.  Every sizeable government entity can, by monitoring their expenses and their department requisitions, get those standard discounts by consolidating all of those individual departmental requisitions into one order per cycle.  No useless “third cook” (such as US Communities — a self-promoted, useless appendix to the body politic) needed in the kitchen.  All that the government entity needs to do is ensure that department heads, whether elected or hired, and their toady bureaucrats do the jobs they are being PAID to do.  Did I mention that they are being paid with TAXPAYER MONEY?

EVERY VENDOR HAS A ROCK BOTTOM PRICE AT WHICH HE CAN SELL.  Every order reflects the vendor’s cost of product, transportation cost, and storage and handling costs.  More product handled per shipment means lower overhead costs for each item shipped; this becomes the basis for price discounts on increasingly larger orders.  The fewer items shipped per order, the higher the price per item.  Office Depot (and any other vendor) would lose its financial ass if it adhered to a “best price” discount for 300,000 $64.00 orders.

The hazard for signers in this “co-op” agreement is complacency.  Office Depot, quite unlike the City of Houston, did not become complacent, and adhered to sound business principles even though the City of Houston tried to bury them under an unbelievable landslide of over 1,000 little bitty orders every week of their contract.

Dangerous Dave alluded to “several” price lists and stated that prices were moved from one list to another to give Office Depot a higher price per item.  Dave was almost certainly referring to the various volume discounts offered with rate schedules based on the amount of each purchase.  Apparently, all those coffee-breaking bureaucrats thought they could pick up the phone between donuts and order one package of napkins for lip-dabbing and get the same price break as if they had ordered 1,000 packages.  It takes a lot more than one package of napkins to pay delivery costs.

Looked at from the full term of the contract, if Office Depot had shipped the same amount of product in only 100,000 shipments, the City of Houston most certainly would have reaped the benefits of volume discounts and would have paid less than the $19.2 million — say, 1.7-6.6  million dollars less.  All the City of Houston had to do was have a central office (e.g., a non coffee-breaking manager) to consolidate all those rampant departmental orders into a SINGLE order once a week (or monthly).  This would automatically have given the city the best price for the product ordered, AND the Office Depot would have reduced its overhead outlay for delivery services.  Win-win, right?

Wouldn’t hurt, either, for the accounting department to verify that all items on the monthly invoice was actually received and that the price listed was the agreed upon price.   I’m just saying

Next up:  Myth (Part 6) Dear Mayor…  Mayoress?…   may I just call you Annise?…

 

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Myth: Vendor Overcharges To Government (Part 3)

Posted on April 10, 2013. Filed under: Journalism | Tags: , , , , , , , , , , , , , |

7th in the series The Manipulators

Life’s Prime Directive:  Every living thing shall attempt to manipulate events, circumstances, behaviors, and social structures to favor its own narrow interests in the struggle to exist.  The only judgment that LIFE places on living entities is the failure to keep existing.  (Okay, it has been said before more bluntlyIt’s all about survival of the strongest.)

Your words for the day: 

  • unbelievable = possessing the property of being too incredulous to be believed
  • red herring = a literary device designed to throw the reader off the trail of plot progression; a diversion or decoy
  • math = the science of using mathematics to figure things out; numeric logic

Clarification of my objective:  These articles, from my slant, paint a negative picture of a specific local government and a specific writer and his media venue.  I hold no personal animosity toward those entities.  However, I do have an animosity toward skewed logic and claims that have the objective to actively bend my personal views (and those of the general public) to enhance the standings of others as they hide their own inadequacies or seek to garner awards and salary increases to further their own life-goals.  You know, using the Prime Directive at my expense.

I am aware that there may be other information “out there” that could render my observations on this Media story as way off the mark.  My focus on THIS journalistic venture of Jack-Hass is limited solely to the information that has been provided within the article and the apparent reason it has been presented in such a caustic vein toward private business.  My presentation is to show that Media seeks to MAKE public opinion, not to simply apprise the public of current events, and, that journalistic endeavors are often based on the ignorance of both the public and the paid story-tellers.

O-kay!  I feel so much more morally superior, now.  Let’s get on with my Media bashing.

Jack-Hass is just a writer.  He has been trained to “drop names” and high-sounding titles into his articles to enhance the importance of his words.  My!  Oh, my, has he dropped a bunch into this story to lend it a semblance of credibility:  City Auditor, City Controller, Mayor, and several other non-associated Government Entities.  They are invoked as though they are the benchmarks of irreproachable accuracy, and yet, political malfeasance is another staple of Media hot-button focus.

While not necessarily “malfeasance,” incompetence certainly seems to apply.  If lapses in bureaucratic protocol were occasional, that is certainly understandable.  We are all human, and, we often lose our focus.  That is why business has so many built-in backup steps (per my previous posting, specifically purchase orders and invoicing).  But, I am totally blown away by the magnitude of this bureaucratic gaff, and the joint journalistic-bureaucratic glossing that seeks to paint the vendor as the bad guy.

Can you believe…

  • 300,000 instances of poorly documented transfers of private product and TAXPAYER MONEY — under a single contract?
  • That a City Auditor would wait 4 years before auditing a major supplier ($75,000 or so per week) against the city’s accounting protocols?
  • That such interest in the accounting protocols only took place after the Auditor heard that other Government Entities were fairly successful in getting retroactive rebates from the same supplier?
  • That an auditor could not determine whether the alleged overcharges were on the order $1.7 million or $6.5 million, and simply summarized, without corroborating documents, that “the city is owed a lot of money?
  • That a city accounting department would pay out $19.2 million without EVER checking to see if the invoicing was as it thought it should be?

Can you believe that a (reputed) journalist would ignore such bureaucratic mis-steps and opt, instead, to cow-tow to the biased, self-serving slant of the reluctant City Auditor?  (Well, that would be the path of least work…   resistance…   I mean “the path of least resistance”.  Why do investigative work?  Just take what the important-sounding City Auditor said and print it up.)

  • Accounting did not do its job for over 4 years.
  • The City Auditor did not do his job for over 4 years.
  • The City of Houston has been short on cash for years; an inept auditor could enhance his standing by dredging up some hard cash when it occurred to him to do his job.  Hell, he might even get the Controller’s job; after all, the Controller bears final responsibility for the city’s financial accounting — or, in this case, NON-accounting.
  • An inept City Auditor who finally thinks he’s onto something needs to get the spotlight on someone else so that his own shortcomings are not in the limelight.

How absurd can this get?  Let’s do some math.  252 weeks of a contract with 300,000 financial transactions during that time totaling $19.2 millionthat’s the raw data.  The extended data is that the average of each transaction is $64.00 ($19,200,000 divided by 300,000), with 1,190 of them per week (300,000 divided by 252 weeks).  This was business as usual for untold numbers of city employees charged with accountability of TAXPAYER MONEY.

The REALLY ABSURD part?  A series of $64 transactions (over 1,000 of them each week for 252 weeks) that — according to the City Auditor — resulted in $6.6 million of overcharges…   or, maybe it’s only $1.7 million.  I guess it just depends on how you calculate it.

And, just how does the US Communities thing fit into all of this?  My code name for US Communities will be “George.”

Next up:  Myth (Part 4) Let George do it

 

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Urban Lore: Taxpayer’s Money and Such

Posted on August 14, 2012. Filed under: KBR, Piss Ants | Tags: , , , , , , , , , |

14th in the series The Great Cluster Fu…   A treatise on questionable journalism and pre-litigation practices

 Your words for the day (definitions according to Dean)

  • government = a legal entity that levies taxes on non-government entities
  • taxes = money that government says is owed to the government by non-government entities
  • government funds = that pool of money possessed by, and in sole control of, government
  • taxpayer money = all the funds possessed by, and in sole control of, a taxpayer after deducting for taxes
  • tax evaders = that group of entities who have had all their assets attached, or, are doing hard time because they did not understand — or, intentionally did not heed — when government said, “MINE!”

Inserted around the testimony of Mary L. Wade (Senior Contracts Manager, KBR), Raiznor uses the terms “bail-out” and “taxpayers’ money” to characterize a post military-engagement indemnity clause added to the LOGCAP III agreement.  We will have to digress at this point to expand on the common knowledge Raiznor is tapping into.

BAIL OUT.  One of the more recent hot issues that have heated up voter temperaments:  that Wall Street fiasco.

  • A segment of Big Business did not manage its operations very well and dug itself a very deep financial hole.  In keeping with the “survival of the fittest” mandate inherent in the free enterprise system of capitalism, a number of mega-corporations were teetering on the precipice of extinction;  the weak would pass on, the strongest would survive and prosper.
  • The government of the US of A, ostensibly in fear of a major ripple-effect through the national (possibly even global) economy, interfered in the natural order of things to save those endangered corporations AND their inefficient operations;  billions of dollars provided to avoid an economic Armageddon.
  • That revived industry displayed its gratitude by putting millions of those relief dollars into the personal pockets of its corporate executives;  that would be the same type of conduct that got them in a bind in the first place.
  • The public (all them taxpayers) was incensed.  The Press (with the big P) augmented that outrage by characterizing this unexpected development as misuse of “taxpayer money.”  The bigger the flame the public sees, the bigger the media profits at the end of the day.

TAXPAYER MONEY.  When the government spends on perceived unpopular items, the tab is payed with “taxpayer money.”  If it is a perceived okay expenditure, the money came from “government funds.”  Sounds like word play for effect doesn’t it?  Let’s look at a few people who have practiced this word play and see what effect they got.

  • Al Capone and a host of other off-the-books entrepreneurs failed to either file or pay taxes to the government.  It is moot whether they just felt the money they earned belonged solely to them, that the government did not have the right to claim any of an individual’s income, or whether they realized that itemizing the sources of their income was tantamount to confessions of a life of crime.*  They DID NOT pay, the government DID PROSECUTE under its laws, and they DID TIME in the Big House.
  • Lyndon LaRouche (Libertarian Party) proved, to his own satisfaction, that the government did not have the right to tax personal income.  He DID NOT pay (or file), the government DID PROSECUTE under its laws, and he DID TIME in the Big House.
  • Jim and Tammy Faye Bakker, another pair of off-the-books entrepreneurs (in the name of religion, you understand), DID NOT pay, the government DID PROSECUTE, under its laws, Jim DID TIME in the Big House; Tammy Faye has since died, yet BOTH of them are still on the IRS hook for an unpaid $6,000,000 in personal income taxes.  Uncle Sam — tougher than a dedicated loan shark.
  • Mr. APYMOTS,**  about that fabulous, off-shore tax shelter your shady financial “advisor” turned you on to…

Taxes.  You MUST pay them (or at least acknowledge that you owe them) to keep the government from acting like you are stealing GOVERNMENT MONEY and PROSECUTING YOU under federal criminal laws.  So, whose money is it?  The TAXPAYERS’ or the GOVERNMENT’S?

Next up:  Contracts and boundaries

  * An idle thought:  would not the requirement to officially itemize criminal activities to avoid being charged with a crime be a violation of a person’s Fifth Amendment rights?

** Acronym…   remember?  Any Person You Meet On The Street

References:  KBR, Mary L. Wade, Qarmat Ali, Doyle Raiznor, Ms. Sparky,

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