Blaming Private Companies for Government Procurement Errors

The blaming of private companies for government procurement errors is one I deal with frequently at my privatization blog.  This seems to be a particularly egregious example:

Maricopa County officials can't sue the Sheriff's Office for buying a $465,000 bus without their approval, so now they want to sue the bus company.

Precisely why Motor Coach Industries would be sued over the internal squabble remains unclear.

The county has maintained in this months-long bus battle that Sheriff Arpaio's office bought the vehicle with Jail Enhancement funds, when it should have used a typical county procurement process.

From the bus company's point of view, though, the Sheriff's Office was a customer with cash. For the county to demand a full refund, without so much as a deduction for the depreciation, seems like a raw deal for MCI.

Cari Gerchick, spokeswoman for the county, says text of the lawsuit won't be released until after the Board of Supervisors votes on it at Monday's meeting. She could not provide the legal justification for the expected lawsuit, beyond saying that MCI "should have known" the MCSO had not followed the county's procurement process.

Get that?  The company should have known that our County's chief law enforcement officer was not following the law.  This is obviously an absurd contention, but further the company had two geographic disadvantages:  1.  Not being from AZ, they don't know just how unethical our sheriff really is; and 2.  Being from Chicago, even if they had recognized unethical behavior, they would have assumed it was perfectly legal


  1. TomB:

    Contracting with the government is a fairly complex process. With the federal government, it is the non-government party that has the duty to ensure that the government agent actually has authority to enter into the agreement. So it is not quite so outlandish to sue the private company for not knowing the county's procurement process. As a tax payer, I am in favor of this.

  2. me:

    TomB makes an interesting point concerning relative interests. I'd add that if the individuals in charge of doing the contracting on the government side could be sued for mistakes they make, we might see fewer of them and enjoy even more benefits as tax-payers.

  3. KTWO:

    From the few details given I would let the bus maker off the hook.

    A government agency can refuse to pay if a government employee or agent was not authorized to make the contract. That is one of the great things about being government.

    "It's good to be the King."

    A janitor in the state capitol can sign a contract to buy 500,000 brooms. But he lacks authority so the contract has no meaning. And the broom seller is expected to exercise reasonable diligence in making contracts anyway.

    The matter becomes more difficult after payment has been made. For clearly someone had the authority to approve the payment, and someone had authority to make the payment and controlled the funds to do so. (The authority to approve and to pay are always separated.)

    IMO if the Sheriff's guy had the authority to buy the bus it is bought. And if he lacked the authority the dispute is between the bus maker and the Sheriff.

    If the county cannot sue the Sheriff that is the counties problem and the bus maker is not involved.

    But since this is government at work the bus maker will be screwed if possible.

  4. morganovich:

    so, just out of curiosity, what the hell is a $465,000 bus?

    that seem a little steep to anybody else?

  5. KTWO:

    morganovich: The price doesn't seem high if the bus is medium sized and will used to transport inmates.

    Everything should be heavy duty so inmates can't break the windows, tear up the seats, etc. And there would be barriers so they can't attack the driver or get out the windows.

    I wonder how they deal with emergency exits.

  6. IgotBupkis:

    > I wonder how they deal with emergency exits.

    Weld 'em shut, if they're smart.


  7. Bob Smith:

    In the private sector, contracts signed by persons with "apparent authority" are good contracts, unless you can show the other party should have known the person with whom they were dealing didn't have that authority. The fact that payment was made is pretty darn good evidence of actual authority, not just apparent authority.

  8. Michael:

    This might be a little too simple, but can't the county just withhold $465,000 from the Sheriff's budget the next fiscal year?

  9. Mesa Econoguy:

    Morganovich: duh

  10. Michael:

    Morganovich, the Daley family's cut is $400,000. Presidents don't come cheap.