Disclose It and Let the Client Make a Judgement

Our government “spends $150 billion on information technology a year”, according to a recent article. How do they decide on vendors? They will need hardware (PCs, servers, etc), software and a computer service firm to put everything together. For example, the service firm writes a program to make everything work seamlessly.
First, the government creates a list of approved vendors. Assume that Dell is approved to provide PCs. Dell guarantees that “they will give the government the lowest available price and disclose all their costs”. Next, the government hires a computer service firm- Accenture, in this instance. Accenture chooses Dell and other suppliers from the approved government list. So far, so good.
The government alleges something more. They state “Accenture signed agreements with numerous suppliers under which Accenture would receive fees or get discounts if Accenture selected them to sell products to the government.” These financial incentives “tied to the deals are usually closely guarded secrets”. Computer services firms respond that “in complex computer contracts where service firms often manage…procurements for years, the government encourages ‘teaming arrangements’” so the service firms can obtain the best products.”
The Big Question: In this example, was Dell really the lowest cost approved vendor, or the lowest cost approved vendor that agreed to pay fees to Accenture? Without the fees, would another vendor have been cheaper, saving the government money?
The Lesson: Insist, in writing, that consultants/ service providers that hire other vendors disclose any payments they receive from vendors.
Your Homework: Have you found out after the fact that a vendor was compensating a service company or consultant they selected? Do you believe it raised the cost of the service?
(Source: “Suits Focus on Secret Computer-Industry Fees”, Wall Street Journal, 8/27/07)