Mark Hurd of HP: it’s not about sex, its about procurement policy! (Much more interesting)

You realise you've probably been doing procurement for too long when you  find the Hewlett-Packard corporate procurement policy more interesting than which particular soft-porn films Mark Hurd's lady-friend has starred in!

Computerworld has a very good piece around why the HP Board got rid of Mark Hurd.  Here's an interesting excerpt.

"The investigation revealed numerous instances where the contractor received compensation and/or expense reimbursement where there was not a legitimate business purpose. And the investigation found numerous instances where inaccurate expense reports were submitted by Mark or on his behalf that intended to or had the effect of concealing Mark's personal relationship with the contractor."

So, relatively minor expense inaccuracies aside, this came down to a procurement issue.  Paying a contractor for work they did not do, or was not legitimate, or possibly paying more than the true value of the work; any of those could be expressed I guess as "not a legitimate business purpose".

That suggests HP have a clear procurement policy that covers this sort of issue - and which Hurd did not follow.  Might it also cover 'single tenders' i.e. awarding a contract without competition?  One suspects that Fisher was not regularly subjected to a competitive process (stop sniggering at the back....).   And if she really was  paid "up to £3,145 per event to greet people" as the Evening Standard reports, then one suspects that a competitive process might well have driven out some cost reduction.  A reverse auction perhaps....

Anyway, this just re-inforces that organisations MUST have a robust procurement policy in place and communicated to everyone, including the top people.  The policy must make it clear that it is the responsibility of everyone who spends money on the organisation's behalf to do so in a manner that is transparent, reasonable, and offers value for money - whatever process they use to spend it.  As a principle, that is just as important as the specific rules on things like single tenders.

I've worked in organisations (public and private sector) where as CPO I had to tell very senior managers that awarding a contract to their friend without competition was very dodgy, and could reflect very badly on them, even if they were convinced personally that the friend offered excellent VFM.  That does raise some questions about sign-off for contracts in HP - I got to know about these cases because procurement had some sort of sign-off on the contracts.  Perhaps the amounts were small enough that it slipped through the system, or Hurd didn't have any checks on contracts he raised?  Perhaps HP need someone to check their procurement processes and policies (I charge a lot less that £3,145 a day....)

One other thought.  I know that some Ministers and Permanent Secretaries of major UK Government Departments have met Hurd.  I wonder if any of them met Ms Fisher as well?  Are any of them feeling slightly uneasy about any further revelations that may emerge?

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