Corruption and Public Welfare

Corruption is a major detractor from global welfare and local economic development. Its consequences are shoddily built roads, structures that collapse, clinics with equipment purchased at high prices or inappropriate specifications. In all such circumstances vast public expenditures do not achieve the envisioned use and local interest suffers.

Typical side payments are 10-15 percent of all major expenditures, with much higher levels in the developing world. “It is human nature to lubricate relationships with gratuity” was a typical statement, with more diversion attributed to high-context cultures [e.g., Latin American, Latin Europe, and Asia] and less to low-context ones [e.g., United States, Northern and Germanic Europe]. Yet, the social acceptance of corruption was seen as a bigger danger because it protects the elite from domestic scrutiny and control. Therefore, the ongoing impact of the U.S. Foreign Corrupt Practices Act and the OECD discussions were seen as instrumental in reducing or at least containing such misappropriations. More multilateral action is seen as necessary to ensure broad, continuous and relentless enforcement of measures against violators. Beneficiaries of ill gotten gains from bribery should eventually be pursued globally to disgorge their ill gotten gains.

This is an excerpt from Dr. Czinkota’s book Global Business: Positioning Ventures Ahead, co-authored by Dr. Ilkka Ronkainen.

Michael R Czinkota and Ilkka A Ronkainen, Global Business: Positioning Ventures Ahead (New York: Routledge, 2011), pg. 105.

Click HERE to acquire the full book.

60 thoughts on “Corruption and Public Welfare

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  39. Zazzle: A Modern Success Story 锘?a href=”http://printing-in-china.net/”>printing services Label Printing Response from Andrew M. Sherman, Director – Office of Congressional and Public Affairs, GPO Dear WhatTheyThink.com: We with the GPO read your report, Reforming GPO: A Multi-Billion Dollar Opportunity, with great interest. In the interest of your full discussion on this issue, we thought you could be enthusiastic about what GPO’s views are. First, the notion that there is a multi-billion dollar opportunity in changing just how GPO currently works is extremely overstated. Last year, GPO procured $431.7 million in printing for executive branch agencies, which is the location where the focus with the problem is. Even including GPO’s in-plant printing of $173.9 million, that is primarily legislative printing, the Federal Register, passports, postal cards, and other essential products, GPO’s work wasn’t even two-thirds of your billion dollars. Now for the issue taking place. OMB Memorandum M-02-07 proposes to devolve authority for printing executive branch documents from GPO and to executive branch agencies themselves. Currently, section 501 of Title 44 in the United States Code requires Federal agencies of the executive branch to make use of GPO for their printing and printing procurement needs. The OMB memorandum proposes that this Federal Acquisition Regulation (FAR) – the rules under which executive branch agencies procure services and goods – be revised. Presumably, a revision for the FAR can be accompanied with a time period of public notice and comment within the provisions of the Administrative Procedures Act, so the policy announced inside OMB memorandum wouldn’t be effective immediately. Moreover, it is just not clear how Federal agencies would behave if your proposed FAR revision is effected and the current language of 44 U.S.C. 501 remains unchanged. The OMB memorandum echoes earlier efforts to transfer printing authority to executive branch agencies. This policy was pursued through the Reagan Administration in 1987 with a proposal to revise the FAR regarding printing. It was pursued with the Clinton Administration in 1993-94 as portion of its reinventing Government initiative. In the first sort case, the FAR revision was withdrawn after Congress enacted a law requiring executive branch agencies to acquire printing for their publications (including forms) through GPO. In 1994, following hearings for the issue, Congress declined to take up legislation to effect the transfer of authority. During both of people earlier efforts, many issues were raised by GPO by other parties in regards to the potential for cost increases in Federal printing and reduced public access to Government information that will derive from decentralizing Federal printing authority. What follows is a summary of these issues with respect for the current policy proposal. Is GPO Really a Monopoly? Under current law, GPO produces about 25% of printing requisitions in-plant. About 75% of all printing requisitions provided for GPO are procured from the private sector. The vast most benefit executive branch agencies is produced in this way, including census documents, IRS forms and instructions, military publications, plus a wide number of books, reports, pamphlets, and forms. However, it can be well-established that GPO is not the sole provider of Federal Government printing, therefore it hardly might be called a monopoly. Several executive branch agencies have statutory authority to print their particular publications. Many others happen to be authorized to operate their own printing and duplicating facilities (ostensibly to produce work because of their own needs, although frequently the facilities are utilized to produce publications that otherwise needs to be shipped to GPO). As an outcome, lower than 1 / 2 of all Federal printing flows through GPO. Based on OMB’s recent object class analysis for those Federal printing and reproduction expenses for FY 2001, GPO’s printing and binding revenues were about 47% with the total (adjusting for your apparent double-counting of GPO’s procurements under Reimbursable Obligations). In addition, as noted above, GPO subjects 75% of all printing requirements towards the highly competitive forces with the marketplace. Many contracts are established for agencies as direct deal contracts, providing agencies with control on the keeping of printing orders. Finally, within the law GPO cannot determine what is or is not printed. It functions only inside a ministerial capacity to achieve one of the most economical printing and make sure that printed items are disseminated as required by Federal law. Again, these facts undercut the characterization of GPO as a monopoly. What GPO does is provide the Government and the taxpayers with economical printing services and effective access to the info products their tax dollars were utilized to produce. Government At Its Best In operation for approximately 50 years, GPO’s printing procurement program continues to be named one of the Federal Government’s most successful purchasing programs. A 1998 management audit of GPO by Booz- Allen & Hamilton, Inc., an unbiased consulting firm working under contract for the General Accounting Office on the direction of Congress, found universal support within the executive branch for your GPO’s services. These agencies viewed this particular service that GPO provides just as one instance of ‘government at its best,’ and not one of them felt that they wanted to or could try this function much better than GPO, the report said. As a centralized purchasing program achieving significant economies of scale, GPO’s printing procurement program obtains substantial savings for the taxpayers. It procures printing openly and competitively from the master bid list of 10,000-12,000 private sector printing firms nationwide, which represent about one-quarter of the printing industry and as many as 240,000 workers. This universe of potential vendors results in intense competition for printing jobs, with resulting low costs. A principal method that GPO achieves this kind of economy is actually grouping together orders for similar products from different agencies under term contracts that are bid out to the lowest responsible, responsive bidder. In FY 2001, GPO contracted with commercial printers to ship 147,800 printing jobs and achieved a 98.2 percent on-time delivery rate. A Broad Range of Procurement Support Services Are Covered by GPO’s Surcharge. For a surcharge of 7% (on jobs worth up to $285,715; the surcharge declines thereafter), GPO earns revenues that support its procurement program. (A maximum rush surcharge of 14% can be also charged, but was imposed on only 2.9% of procurement job orders in FY 2001, and virtually always in the request of the ordering agency so that you can move their jobs towards the front in the procurement line; the rush surcharge reflects the charge from the additional effort to immediately bid rush jobs, sometimes in dependent on hours.) No funds are appropriated by Congress to GPO to aid its printing procurement program. Revenues from your surcharge cover the cost of GPO’s 330 procurement personnel, who’re located in Washington, DC, and in 20 regional and satellite procurement offices throughout the country to support the printing needs of executive branch agencies nationwide. The many Federal entities with whom GPO does business are currently represented by approximately 6,300 billing address codes in all of the three branches of Government, with all the preponderant number inside executive branch. GPO’s 7% rate covers the fee of the wide variety of services: GPO reviews requisitions and offers ideas for economizing; develops specifications; competes, awards, and administers contracts; performs press inspections and other on-site reviews to assure quality; performs quality control reviews utilizing an original program that quantifies quality ranking factors which has become well known throughout a; provides voucher examination and payment services; provides legal advice on contracting; and offers a dispute resolution service through GPO’s Board of Contract Appeals. Buying printing just isn’t like buying paper clips. A knowledge of printing requirements and operations is necessary to ensure purchasing from the greatest value. GPO printing contracts are developed and done by knowledgeable printing experts via a package of procurement support services. This package of services is highly economical. The vast most of GPO’s procured print jobs are worth $2,500 or less, yielding a surcharge of about $175 to pay all of the services offered to keep the procurement. For each job, whether it can be worth $100 or $a million, GPO charges a nominal processing fee of $7.50 — that’s right, just $7.50 ($15.00 for your rare rush-surcharged order). This fee helps recover procurement costs on small dollar orders. For 147,800 orders in FY 2001, this fee recovered a bit over $1 million. For FY 2001, GPO generated total printing procurement revenues of $431.7 million; total surcharge revenues (such as the revenues from your flat fee per procurement) were $32.5 million (not $50 million to $70 million as suggested by OMB). From its total procurement revenues for FY 2001, GPO earned prompt payment discounts of $6.6 million (an efficient rate of a single.5%, not 5% as stated by OMB). GPO is able to make prompt payments usually in 28 days or less on account of its specialization in managing private sector printers. GPO’s Revolving Fund benefits executive branch agencies by operating like a temporary funding mechanism. GPO pays the contractor promptly upon proof performance. The ensuing collection by GPO from your agency may sometimes take more time. Because GPO’s Revolving Fund is capable to make the payment and finance the lag, there exists continuity of printing services to the agency. In a decentralized system of printing, if you will find delays in payments by agencies, the price of future printing orders with contractors could increase. Significant Cost Increases towards the Taxpayers Are Likely Under OMB’s Proposal. Previous numerous studies have indicated that decentralizing authority for printing among executive branch agencies can lead to significant cost increases in Government printing. The extent with the cost increases would vary based on how agencies decide to address their work. The most critical cost increase would occur if agencies produce their printing work of their own printing and duplicating facilities. Previous studies with the General Accounting Office, the Office of Technology Assessment, the Joint Committee on Printing, as well as Inspectors General have shown that it is usually has almost as much ast 50% costlier for agencies to print in-house rather than procure their printing through GPO. That alone could result in the annual cost increase of $216 million over current GPO printing procurement revenues. Make no mistake about it: the possible that agencies will pull figure out in the procurement stream and convey it of their own facilities is extremely real within the OMB memorandum. The memorandum specifically says that executive branch agencies may rely on agency in-house printing and duplicating operations and agency cross-servicing arrangements albeit only when such in-house operations and agency cross servicing arrangements offer the most effective combination of quality, cost, and delivery, in relation to an entire account coming from all costs in the original]. It is going to be extremely hard to police this provision: keep in mind that currently, all agencies are required to make use of GPO for printing, yet GPO only sees about half all Federal printing needs. What authority could there be to ensure that agencies usually do not abuse this provision by pulling all of their printing out with the procurement stream for production in-plant? It will also be difficult to make use of Government accounting records to produce an entire account of all costs to prove that Government printing costs favor procurement over in-plant production. Most Federal agency accounting systems aren’t as sophisticated as GPO’s in capturing all the costs linked to printing. As a good example, a 1995 General Accounting Office (GAO) comparison of Department of Defense (DOD) and GPO printing costs was inconclusive mostly due to GAO’s concerns concerning the completeness, accuracy, and reliability of Defense Printing Service’s cost accounting system. On another hand, if agencies procure work themselves through the private sector, earlier analyses have suggested that they might be likely to cover more because of their own procurement costs. Of course, agencies can be required to perform exactly the same contract-support services that GPO provides; there is not any escaping this fact, and so the savings that OMB envisions due to without having to spend GPO’s procurement surcharge certainly are a fantasy. Moreover, without GPO’s economies of scale, agency procurement prices are likely to get substantially higher than GPO’s. A real-life test has borne out this theory. A 1997 HHS and GPO Inspector General review from the printing program in the National Institutes of Health, which includes its printing authority by law, is instructive: the review disclosed that NIH internal printing procurement costs ran between 10% and 18% of the worth of procured work, over double GPO’s surcharge. This implies that for every agency to keep up the identical a higher level printing procurement support services that GPO currently provides, the taxpayers’ costs goes up significantly. Previous analyses also have indicated the prices that agencies purchase printing itself are usually to become higher. Agencies are unlikely to maintain a similar universe of competition among private sector printers that GPO achieves (10,000 – 12,000 printers). The resulting decrease in competition could cause significant price increases. Private sector firms would have to take care of procurement process established through the Federal Acquisition Regulation as opposed to GPO’s Printing Procurement Regulation. Decreased competition could also result in increased opportunities for favoritism and corruption. In addition, while using lack of GPO’s one-stop-shopping alternative for printing contracts, private sector printers would must increase their costs to get contracting opportunities on the list of large number of agencies seeking vendors. They would also lose the standardization for bidding for printing jobs that currently is accessible through GPO, potentially increasing their paperwork costs. For large private printing firms, these costs might not impact price appreciably, nevertheless for smaller firms there could possibly be a considerable impact. Currently, 77% of most GPO printing procurement orders are handled by small businesses. Finally, previous testimony has suggested that the removal of executive branch printing from GPO would improve the cost of remaining GPO in-plant work. Roughly half all GPO in-plant printing is for Congress and also the other half is good for agencies, primarily the Federal Register and associated products. Both have their work produced cost-effectively while using same staff and equipment. Removing executive branch work could twice the cost from the remaining congressional work. Likewise for the cost of executive branch work which is removed. Other Negative Impacts on Government Printing Are Likely. Earlier analyses have acknowledged that there may be other impacts on Government printing, or negative externalities, under a system of decentralized printing authority. GPO would will no longer be capable of apply uniform standards of print quality to Government work. As an effect, it could be hard to ensure standardization of quality government wide, resulting in problems in contract disputes between vendors and agencies. GPO will be not able to monitor and enforce the consistent use of requirements to the using recycled paper, alkaline and permanent papers, and vegetable oil-based printing inks, all required by law. With the prospect of reduced printing jobs flowing on the private sector, or increased costs for anyone jobs, the financial stability of many private sector printing firms could possibly be jeopardized. GPO’s employees would be also impacted. Public Access Could be Severely Impaired. More important than the effects around the price of printing can be the impact of decentralizing printing authority on public access to Government information. All earlier discussions on this issue have focused heavily around the conditions that would arise from smashing the efficient link between production and distribution of Government documents that currently exists in GPO. Without this link, people’s entry to Government publications and knowledge will be significantly impaired. This link currently serves because the way to obtain publications for GPO’s Federal Depository Library Program (FDLP), which GPO operates in partnership with approximately 1,300 academic, public, law, along with other libraries nationwide, and which serves countless citizens annually. Also impacted would be GPO’s cataloging and indexing program, statutory distribution program, and international exchange program, along with GPO’s Internet information service, GPO Access (www.gpo.gov/gpoaccess). These programs are funded by legislative branch appropriations. Some observers have suggested that decentralizing printing authority to executive agencies would effectively transfer the obligation for ensuring public usage of Government information in the legislative branch, where this responsibility resides closest for the elected representatives in the people, towards the executive branch. A footnote to OMB’s memorandum addresses how agencies are going to discharge their documents distribution responsibilities. They would always be forced to provide publications because of these distribution programs, because they currently are under section 1903 of Title 44. However, there is evidence that compliance rates would be low. Publications that belongs within the FDLP and related programs but are certainly not included these are known as fugitive documents. Already, the rate of fugitive documents is high: prior estimates have placed it inside neighborhood of 50%, which corresponds roughly towards the amount of Federal printing not coming through GPO. With the decentralization of printing authority to Federal agencies, the pace of fugitive documents can be likely to increase. A 1998 HHS Inspector General overview of NIH’s publications program discovered that 78%of NIH’s publications qualified as fugitive documents. The IG’s report said: NIH did not always provide copies of printed publications to GPO for distribution to libraries], or provide single copies to GPO for and indexing]…By NIH not providing copies of publications to GPO for FDLP distribution, depository libraries, along with the public who make use of them, do donrrrt you have ready access to documents this agreement they’re entitled, that were being printed with taxpayer money… While GPO’s distribution programs are increasingly electronic, print, microfiche, and CD-ROM products always play an important role in providing public usage of Government information. There continues to be an amazing level of Government information which is why no reliable online alternative exists, and issues with ensuring permanence along with other issues are nevertheless present for most online products. In FY 2001, GPO distributed 5.9 million copies of approximately 14,700 tangible titles to depository libraries. GPO achieves important economies of scale inside distribution of tangible products by combining multiple products from different agencies in shipments towards the libraries. For approximately thousands of Federal entities to ship nearly 15,000 products annually to 1,300 libraries in a organized, cohesive system could be expensive, when possible whatsoever. The success of GPO Access, which makes available nearly 225,000 Government information titles, and from which the public retrieves greater than 31 million documents per month, depends partly for the centralized system established by Title 44. GPO uses that system to watch for brand new electronic products that may either be loaded on GPO’s servers or to which GPO can link. Without it, the current level of comprehensive access is likely to be diminished. Another development which could emerge could be the proliferation of alternative publishing agreements that impede public access. Some agencies have previously pioneered agreements that sell copyrights for taxpayer-subsidized information to non-public sector information industry companies — not necessarily printing companies — in exchange to the costs of printing. With GPO since the central printing and distribution source, these developments could be monitored and addressed as they arise. Without GPO, there would be little in order to avoid agencies from engaging over these practices, resulting not only in lost opportunities for printing contracts but impaired public use of taxpayer-subsidized information. For all with the above reasons, we with the GPO believe the system proposed with the OMB memorandum will lead to higher costs for the taxpayer, reduced printing contract opportunities on the smaller businesses that dominate the printing industry, and impaired public use of taxpayer-subsidized information produced with the Government. As the review of the OMB’s memorandum progresses with the executive as well as the legislative branches of Government, GPO will further detail its concerns concerning the future direction of Government printing policy. Sincerely, Andrew M. Sherman Director Office of Congressional and Public Affairs GPO ,High-Wire Acts: Adventures in the 2014 SGIA Expo (Part 1)
    — Special Feature – Secrets From The Samurai of Sales Adding a Little Coney Island: Make Your Marketing Memorable Part 2 Read Part 1 By Harvey Hirsch March 15, 2007 So what’s the fundamental secret? As I mentioned yesterday, I prefer to activate my client’s prospect through an emotionally charged 3-dimensional mailer, and today that I’ve discovered great and bad variable imaging and personalization, I wanted to feature fractional treatments into my mailers. But I quickly discovered until this hasn’t been simple to resolve. It seemed if I wanted 5,000 window envelopes personalized, I were forced to print 6,000 because I would lose approximately twenty percent during die-cutting and assembly. Not good! I won’t know which names were lost until these people were all finished and I physically were forced to check them off. Was there a better way I asked my suppliers? Nobody had an respond to my dilemma. The new approach costs about 13 percent of what are the client is familiar with paying and they’re able to analyze and affect the pitch quickly. I’m into developing the site, what exactly could I come on top of to alter this formula and have what I needed? Hmmm. What after we die-cut first, only then do we print. Would this work? I created an exclusive die, pressed it and ran it. Then I lined in the artwork, hooked in to the database and ran a number of over a small laser printer. Wow, it worked! We now develop the beginning of a brand new way of producing short-run, multi-dimensional personalized products manufactured on-demand. Did I lose you? Die-cut the piece first and print into it? What a perception. Another Speed Bump Now I was prepared to test an application using a client, dependant on this revolutionary concept. But when I went along to my digital print supplier he flatly refused to operate already die-cut sheets on his system because as long as they fell apart and damaged the guts, who spend on repairs? Uh-oh, another speed bump! Well, if I planned to go ahead on this I could have to function around this concern. Fortunately, we experienced a small connected digital copier/printer in this office for proofing and I was able to obtain it to merge data and print on these templates. And, it was crowned the beginning of your fresh product category. A New Marketing Product Category? There are presently 4 varieties of direct mail designed for companies make use of; 1- flat mailers comprising postcards and letters or brochures in envelopes, 2- lumpy or dimensional mailers, everything at a pen within an envelope to boxes, 3- non-personalized mail using ink-jetting or mailing stickers and, 4- VDP personalized and versioned mail comprising basically the flat mail section. The new idea seemed being a fifth category: Personalized and versioned 3-dimensional mailers, printed on-demand. Was this really possible? Could I create products that might be highly adaptable to variable data, versioning, short-run? And could it generate an income? It seemed being a tall order, but whether or not this worked it might function as the beginning of the became a whole new structure. Let me demonstrate what I mean. These photos are of the fish-themed mailer containing 7 shaped and personalized die-cut fish as well as an A-7 invitation containing a die-cut reef holding a hand folded origami fish, all personalized while using recipient’s name. It generated a great fifty percent response for client, Superior Printing Ink Co. How can doing all this play in Peoria? Since direct mail pieces like they’re costlier compared to a basic flat envelope you do not send several. But you additionally improve targeting of your prospects. Imagine, should you will, a marketing and advertising program where results are modeled to distinguish the optimal customer so only 20 dynamic mailers are sent to test the pitch as well as the database. Let’s say the purchase price of every mailer is $20, and 5 people respond–a fair (around my experience) 25 percent response. The cost of every respondent is merely $80 when amortized. By comparison, the latest expense of establishing a prospect coming from a suspect is around $600 using currently established options. The new approach costs about 13 percent of exactly what the client is employed to paying. More importantly, though, the buyer can analyze and affect the pitch instantly, analyze the sales representative’s telemarketing follow-up skills and closing rate, and earn changes prior to a next mail drop of one other 20 units. What company wouldn’t prefer to cut their costs of leads generation by 77 percent? What can it decide to try feed your small business in the present competitive environment? What does one distribute and what would it return? Are you learning how you can manage your client’s assets, utilize critical data as part of your 1:1 versioned pitch, tickle your web visitors with PURLS? Have you planned to go to the PIA/GATF’s VDP Conference in November, PODI’s yearly Conference, or perhaps the On-Demand Show, coming next week in Boston? Did you signal your profits individuals to a Xerox, Kodak or HP seminar a year ago or are you recently going to rent one or two of web-to-print specialists and hope they could sell? Have you considered the dear technology currently available, or have you merely crawled in your shell to handle the probable? Which ride have you been making? ,Book Printing printing solutions
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