Scenario 1: A relative works for a supplier
What is the situation?
A government department needs a building firm for a major capital project. Rawiri, the manager in charge of delivering this project, is married to Kevin, who works for a building firm.
Kevin’s firm is on a shortlist of suppliers bidding for the contract. He is in charge of putting together pricing.
Rawiri is in charge of putting together the government department’s requirements. He will be part of the evaluation team choosing which firm to award the contract to.
Why is this a conflict?
This was a potential conflict of interest at the planning stage. It became an actual conflict of interest as soon as Kevin’s firm was shortlisted to bid for the project.
Rawiri is representing the interest of the government department he works for. That interest is getting the best value supplier for the job. However, Rawiri also has an interest in Kevin’s successful employment.
Management plans that do not mitigate the conflict
The government department identified some management plans to deal with this scenario. However, these plans do not remove the risk or reduce it to an acceptable level.
| Proposed management plan | Why it does not work |
|---|---|
| Rawiri and Kevin do not discuss the project at home. | This would be impossible to verify. Even if it were manageable in practice, it does not mitigate the perception of a conflict, particularly from other suppliers bidding for the contract. |
| Rawiri will be an adviser to the evaluation panel but not a full member giving the suppliers a score. One of his staff will replace him on the panel and do this. |
This does not remove the perception that Rawiri is still in a position of influence. If his advice is needed, it must be influential. |
What might be a better plan?
A better plan would be to completely remove Rawiri from the procurement stage of the project. A conflict of interest involving close relatives in influential positions is very difficult to mitigate.
Mitigation might be possible if they were more distant relatives (such as cousins) or if they held less influential roles (such as administrative staff members).