WASHINGTON — Data analysis can help Amtrak avoid fraud in the procurement process as it deals with historic amounts of funding for infrastructure projects, Amtrak’s Office of Inspector General says in a new report.
The report issued Wednesday, April 17, is a follow-up to one last year that identified procurement and contracts as one of four areas in which the company is at highest risk of fraud [see “Amtrak Inspector General warns of fraud risk …,” Trains News Wire, May 19, 2023]. The latest report notes that the Office of Inspector General has investigated 110 fraud-related cases between 2017 and September 2023, helping recover $269 million in restitution, forfeitures, and other areas. The office has also issued 25 audit reports identifying areas of vulnerability in that time.
The new report also says that best practices indicate organizations collect data in a format that helps recognize potential fraud, such as patterns of winning and losing by the same group of bidders; a single entity creating multiple identities to create the appearance of competition; or sudden increases in spending or high numbers of change orders by a vendor. The report includes appendixes detailing forms of contract and procurement fraud, and ways data can identify them.
The full report is available here.
The suggestions have been in general industry for decades. Don’t understand why it took the government so long to decide that Amtrak needed to have what was sound practice every where else. Also another thing that could be implemented is a rule (by contract with failure to agree by the parties cause for termination) that prohibits any purchasing or contracts personnel to go to work for a successful bidder for five years. That takes the impetus for scamming the system out of the public purchasing process. A private company I once worked for implemented a similar rule and immediately stopped the bleeding. Also prohibiting contact between contract officers and purchasing officers outside of the formal office environment also will stop this type of bad behavior. Its is cheaper to cater meals for in-house meetings than jave the problems Amtrak continues to experience.
As a procurement manager for over 37 years in the private and defense industry, it amazes me how often Amtrak makes contracts with the same companies and always ends up with the same result: late delivery, missed deadlines, poor results and ballooning costs. Maybe the procurement activities of Amtrak should be outsourced to a private contractor whose activities are audited yearly by the GAO. Sometimes it DOES take a SLEDGE HAMMER to achieve acceptable and ethical results!
” Also prohibiting contact between contract officers and purchasing officers outside of the formal office environment also will stop this type of bad behavior.”
Sorry, I meant to say between Procurement personnel and Bidders representatives. My bad.
Data is useless until someone skilled enough can evaluate the data. Analogous to a radiograph that cannot be interpreted by the doctor: it is a pretty picture with no meaning.