Vendor Codes of Conduct Sound Better Than They Are

Local government vendor or supplier codes of conduct are not commonly found in the U.S. In a limited search, I couldn't find one. But corporations commonly have them, as do some Canadian cities and some states and state agencies. And they sound like a good idea.

The reason I raise this idea is that Cuyahoga County's new county executive says he will have one drafted (see my most recent blog post). What can we expect from such a code of conduct?

Ottawa's supplier code of conduct has good provisions, but nothing regarding government ethics. West Virginia's vendor code of conduct consists mostly of ethics provisions. However, as good as they are, they do not provide very clear guidance. Here are the four core provisions:

4. Refuse to cause or influence, or attempt to cause or influence, agency procurement officers in their official capacity to impair the objectivity or independence of judgment of a purchasing transaction;

5. Avoid any appearance of unethical or compromising practices in relationship, actions and communications;

6. Identifies and eliminates participation of any individual in procurement situations where a conflict of interest may be involved;

7. Understands that agency purchasers of the state shall at no time or under any circumstances, accept directly or indirectly, gifts, favor, service, gratuities or other items of value from your organization;

The New York State Energy Research and Development Authority code of conduct for contractors, consultants, and vendors is more extensive and detailed. It includes a lobbying provision, an independence of bid provision, relatives of employees and post-employment provisions, and duty to report provision (complete with a hotline number). But they are only guidelines, with language such as "encourages" and "strongly discourages." There appears to be no training, formal advice process, disclosure, or enforcement. One sentence stands out from the whole; it is a reference to a state law:  "Violations of these limits on gifts may be grounds for immediate contract termination and referral for civil action or criminal prosecution."

Better than separate, unenforceable codes of conduct is the application of ethics provisions to vendors and others doing or seeking business with a local government. It is important to give the local (or state) ethics commission jurisdiction over these individuals and companies. Any ethics-related rules for vendors and others doing business should be included in the ethics code either directly or in an appendix, so that all rules can be found in one place (state rules should also be included in an appendix, for this reason).

All applicable provisions should also be included in all RFPs, requests for permits, and the like, and all vendors and others doing or seeking business should be required to disclose all possible conflicts. They should also be encouraged to seek advice before the bid, grant, or permit process begins.

Putting all of this in the form of a vendor (and grantee, permittee, etc.) code of conduct, and including it will all RFPs, etc. is fine. But trying to do an end-run around this formal, enforceable process with a merely aspirational code of conduct is not acceptable. Vendors and others doing or seeking business should be brought fully into a local government ethics program. Not only does it protect the public and their officials, it also protects vendors and others from being pulled into a pay-to-play situation. When an official demands a gift, to himself or any individual or entity close to him, someone seeking a contract, grant, or permit should be able to point to a law and say that if he does so, he will lose his contract, grant, and permit, so there is no advantage to him, or anyone else, in making the payment.

Robert Wechsler
Director of Research-Retired, City Ethics

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