Former Boeing Procurement Officer Pleads Guilty to Fraud
Ten days ago, former Boeing procurement officer, Deon Anderson, 47 of St. Louis, MO, pled guilty to three counts of federal procurement fraud, including taking bribes in exchange for competitive information and setting a pricing scheme for that information. Between November 2009 and February 2013, Anderson conspired with William Boozer, 59, owner of Globe Dynamics International, which produces machine parts and complex components for aircraft, to sell confidential information about competitors’ bids on purchasing contracts from Boeing. The two used a coding system via phone calls and emails to set prices for competitive information. Boozer used that information to win more than $1.5 million in contracts from Boeing. He plead guilty to related charges in May and will be sentenced August 15. Anderson will be sentenced October 15.
Anderson also conspired with two other, separate defense contractors in similar schemes. Between 2011 and 2013, Anderson conspired with Robert Diaz, Jr., owner of consulting firm Inland Empire and Associates of Las Vegas, and Jeffrey Lavelle, owner of J.L. Manufacturing of Everett, Washington. As a result of Anderson’s selling competitive information to Diaz, Inland Empire and Associates won more than $2 million in contracts from Boeing. Lavelle’s case is still pending trial.
Boeing (NYSE: BA) is an aerospace and defense industry heavyweight, which produces fixed- and rotary-wing aircraft for both the civilian and military aviation markets.
Johnson Controls Names Michael Bartschat as Company’s First CPO
Last week, the Milwaukee-based multi-industrials company, Johnson Controls, announced that it named Michael Bartschat as its first Chief Procurement Officer and a corporate officer. Bartschat joined Johnson Controls in 2004 and has held various roles within the company, most recently as group vice president and general manager of product group metals and mechanisms, Automotive Seating.
In his new role, Bartschat will report to R. Bruce McDonald, Executive Vice President and Chief Financial Officer, and will lead an integrated enterprise procurement organization overseeing multiple business units. Moving forward, Bartschat will seek to optimize Johnson Controls’ purchasing and spend, and standardize its processes across all business units in order for the company to scale its resources.
“While procurement has always been a focus at our business-unit level, under Mike’s leadership we are committing ourselves to building a world-class global procurement function to leverage our combined reach and spend,” said McDonald. “This new role brings key strategic capabilities including global sourcing and procurement operations and will enable the introduction of common systems and processes across the organization.”
Bartschat earned an MBA from Harvard Business School, as well as a Master’s Degree and a Bachelor’s Degree in Mechanical Engineering from the Massachusetts Institute of Technology and Carnegie-Mellon University, respectively.
Obama Calls for Companies to Pay Smaller Suppliers Faster
The White House recently unveiled President Obama’s newest economic initiative, SupplierPay, in order to help small businesses receive faster payments from the large companies they supply. The program will also help small business access credit faster. SupplierPay is recognition that small businesses are critical to the nation’s economy. Small businesses have been particularly challenged during the economic recovery, as cash reserves and flows are smaller for small businesses and it often takes them longer to get reimbursed or paid for goods and services rendered. Without cash or capital, it makes it difficult for small businesses to expand and reinvest, which makes it difficult to hire new employees or upgrade their infrastructure. But SupplierPay should hasten cash flows to small businesses.
Many large, well-known companies like Coca Cola, FedEx, Honda, CVS, Walgreens, and IBM have already signed onto SupplierPay, which is modeled after the US government’s QuickPay program. QuickPay was instituted three years ago as an initiative that has required federal agencies to pay small businesses ideally within 15 days of goods or services rendered. Small businesses constitute a large percentage of the government’s contract roster. As a result, QuickPay has hastened more than $220 billion in payments to small businesses over the past three years. The program has been so successful at the federal level that the government is seeking to require prime government contractors to pay their sub-contractors in a similar time frame.
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