Sometimes the most damning evidence about an industry or an organization comes from the inside. In this second installment of "Buy: The Way…To Purposeful Procurement's" deep dive into supplier tactics, two former supply executives continue exposing the ins and outs of the supplier playbook they used on procurement when they were on the other side of the fence.

Bob Schreiner, former CIA section chief and G4s operations executive, explains how security guard service providers can obscure margin increases within seemingly reasonable wage adjustments for officers. He also exposes the "position rate variance" tactic, where suppliers charge premium rates for senior guards to fill junior positions, and also how disasters can become margin-grabbing bonanzas for suppliers.

Keith Robinson, one of only 150 board-certified entomologists working commercially in North America, exposes seasonal billing schemes in the pest control industry, where compliance rates plummet in colder months, yet billing continues unchanged. Perhaps most shocking is his revelation that 80-90 percent of fogging and fumigation services are often completely avoidable.

These true stories from industry insiders point to a troubling reality: procurement is sometimes so focused on up-front savings that they inadvertently signal to suppliers exactly how to game the system. In effect, procurement ends up creating the perfect conditions for the kind of post-contract chicanery that can create significant cost increases for the business over the years, without any change in service scope or delivery.

Links:

BTW EP 11: "Poachers Turned Game Wardens:" The "Tuners" on Indirect Supplier Tactics (Part 2)

Art of Procurement