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    Default Spartan Motors to pay fed's 1.7 million

    http://www.theoaklandpress.com/artic...7158841020.txt

    Thursday, December 25, 2008 9:22 AM EST
    By JOSEPH SZCZESNY
    Of The Oakland Press

    Spartan Motors, a Michigan company with several defense contracts, has been caught in a bribery scandal.

    The U.S. Department of Justice said Wednesday that Charlotte-based Spartan Motors has agreed to pay the federal government $1.7 million to resolve allegations that it paid kickbacks to an employee of Force Protection Inc. to obtain a subcontract to provide chassis for armored vehicles for the U.S. Department of Defense.

    The Justice Department accused Spartan of paying about $100,000 to an employee of Force Protection in return for that employee’s agreement to have Force Protection Inc. of Charleston, S.C., purchase truck chassis from Spartan to be used for both the Army’s and the Marine Corp’s Mine Resistant Ambush Protected or MRAP vehicles.

    The plea was finalized earlier this week in the U.S. District Court in Columbia, S.C., where the investigation began. As a result of the fine, Spartan Motors will record a $6 million charge — covering the fine and related penalties — in its fourth quarter 2008 results, reducing its net earnings by about 17 cents per share.

    Spartan also has revised the company’s “Business Code of Conduct and Compliance, and has naming of Chief Financial Officer James Knapp as Spartan's chief compliance officer, the company said in a statement.

    “Though clearly a painful lesson, we are looking forward to putting this incident behind us. We are fully focused on our future in the military market and expect to remain a supplier in good standing with all our customers,” said John Sztykiel, Spartan Motors’ chief executive officer.

    “We cooperated fully with the government’s investigation and have taken a number of proactive steps to ensure both that Spartan has an effective compliance program in place and that everyone in our organization understands and appreciates the military’s stringent contracting and reporting requirements,” Sztykiel said.

    Under the anti-kickback statute, a party is civilly liable to the United States for twice the amount of the kickback paid, plus up to $10,000 per incident. Here, the United States contends that Spartan paid kickbacks for the sale of 136 chassis.

    The settlement is the culmination of a joint investigation involving investigators, attorneys and auditors from the U.S. Attorney’s Office in Columbia, S.C., and

    the Justice Department.

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    Fascinating! Lets see if I got this right. A New Jersey Pierce salesman is accused of all kinds of crimes because he has Fire Departments use his specifications for bids which leads to a state investigation. Once this is posted here all of the boo birds and Pierce haters come on and have a ball. But now we see that Spartan is not only accused, but guilty of a crime and not one single response from you guys. I dont see the parity here, or do some of you guys really hate Pierce that much. Just for clarity I don't have a dog in this fight. I'm just wondering why.

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    Talking Agree!

    I agree E153, interesting, of well, maybe die hard pierce lovers don't believe in this forum or they are only positive responders, who know, i said it before and i will say it again, we are a small rural career dept on west coast, we are in the process of buying a new engine (every 6-8 years) and i am on committtee and we have been darn near everywhere looking at demos, new deliveries etc and and hands down the kool-aid is the best, maybe not in price, but it seems you get what you pay for!

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    Default

    In what way is it "the best"?

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    Wink Why?

    warranty work was done without problems and nearest pierce shop has a service truck to come to you instead of us delivering a engine 2 hours one way. Talked to depts that are now going pierce and have not had any in past. Talked to depts that have appratus over 10 years old and still using it as first out. The paint was top quality and again after ten years is still in good shape. However a local dept just took in 4 new pierce engines and there mechanic said these were by far the lowest quality of engines pierce has ever produced, but he said dealer has made up for problems, again with them coming to them, he said that dealer has emailed them changes/updates for the pierce command zone (multi-plex system) and fixed problems with very little down time, we visited a dept that took delivery of another brand of custom fire trucks that had pierce before and said that the admin had a beef with pierce dealer and wanted to prove a point and bought something else, well in 6 short months they alreadty are having problems that are endless. There are going to bid on two 100' platforms and cant wait to see who gets bid! After seeing another local dept goto bid for a 100' platform-quint, they told me pierce was a middle of the road bid. Again they went with pierce. Other depts have other scenarios, this is mine and as a matter of fact with our fleet we dont even own a pierce. OUr last custom pumper was essentailly broke down when it got delivered, the manufacture and salemen told us to take to whereever we want to get it fixed and send them the bill! That is service, that I dont want. If some one is close to a KME plant or a service center that has a good reputation, then that would be a good deal. Just my 2 cents and my experience. Good luck and do your homework. Happy New Years!

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    Quote Originally Posted by firebill911 View Post
    hands down the kool-aid is the best, maybe not in price, but it seems you get what you pay for!
    All depends on who you talk to...... the 5 or 6 new ones around me have been nothing but problems, 2 of them are in my own dept.
    There there are those in Chesapeak VA. Spoke with a good friend of mine there Both of their new Tillers have been OOS for MONTHS due to issues that have never been resolved since delivery.


    like I said it's all on who you talk to.
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    Lets see : Force Protection is a company that recently was bought out at bankruptcy by Patriarch partners . The same investment firm that ran ALF into chapter 11 & then bought it back at pennies on the dollar.

    Anybody else seeing a pattern here?

    engine 153
    In answer to your question yes it did make the news when pierce got caught rigging bids in NJ, and this time Spartan got caught screwing the government in a kickback scheme for a company that only produces military vehicles .

    Not quite the same !

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    Default What? What?

    I'm sorry, but all things considered...I don't see any diffrence between the two of them.

    DISPICABLE.

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    Ah, let's clear up a little misconception about the NJ investigation. Pierce was not "rigging" bids. Pierce, E-1, ALF, Seagrave, insert manufacturers name here, do not publish the bid specs. The fire department does. They are free to publish whatever specs they want. No one was ever forced to publish a specific set of specs by any manufacturer.

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    Quote Originally Posted by RoofTopTrucky View Post
    There there are those in Chesapeak VA. Spoke with a good friend of mine there Both of their new Tillers have been OOS for MONTHS due to issues that have never been resolved since delivery.


    like I said it's all on who you talk to.
    Exactly. Did he tell you Chesapeake also just made an emergency purchase of 10 new Quantum pumpers? Just food for thought.

    Also, Sven is right, Pierce wasn't rigging bids in NJ, nor was any other manufacturer. If the complete report is read, this can be seen. It's obvious some of the purchases might not have been as transparent as perhaps they should have been, but the focus should be on the purchaser, not the bidder.
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    Quote Originally Posted by sven73 View Post
    Ah, let's clear up a little misconception about the NJ investigation. Pierce was not "rigging" bids. Pierce, E-1, ALF, Seagrave, insert manufacturers name here, do not publish the bid specs. The fire department does. They are free to publish whatever specs they want. No one was ever forced to publish a specific set of specs by any manufacturer.
    OK I'll conceded that "Rigging" may not have been the correct word.How about Collusion
    When salesmen "A" works with a dept to create a spec that only one single builder can produce a vehicle in full compliance with. That IS collusion and fixing the bid process. When same salesmen takes the parties responsible for producing said bid spec on trips and out to bars and dinners before & after the bid process that is certainly a legally questionable act.
    That is why the atty general investigated.

    Call it what you want :If it walks like a duck and quacks like a duck and shats on the sidewalk like a duck , it's not a seagull

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    Saleman A is acting at the behest of the fire department. What is salesman A supposed to tell them- Sorry can't put that in the spec because no one will bid? I don't think he'll make alot of money that way!

    Let me ask you this- if you are on a truck committee and spec 10.5" frame rails with a big block motor haven't you just written a spec that excludes a manufacurer?
    Last edited by sven73; 12-30-2008 at 11:06 AM. Reason: Spelling

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    Being from NJ, I can tell you a funny story... circa mid 1990's

    A department local to me here was looking towards purchasing a certain brand apparatus, for whatever reason right, wrong, or indifferent. Their Bid Spec included a line "Apparatus shall be equipped with rubber mud flaps behind each set of wheels front and back. The mud flaps shall be black in color with the apparatus manufacture's logo in white raised lettering surrounded by a white raised oval design."

    To this day, they didn't get the brand they wanted, and I've never seen another Seagrave logo on mudflaps surrounded by an oval. If anything, it's pretty damn comical to those like me who notice these details and hear these stories.
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    Everything I state on here is to support and aid my fellow firefighters. Everything I post is my opinion only, and in no way should be taken as an official opinion of any Company, Department, or Municipality I represent... oh and this includes Pierce Mfg, as so their legal department has advised me; since they apparently also invented the right to control "Free Speech".

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    Quote Originally Posted by sven73 View Post
    If you are on a truck committee and spec 10.5" frame rails with a big block motor haven't you just written a spec that excludes a manufacturer?
    Not necessarily. Most specs have a "Complies: Yes/No" section next to each item. The words "NO EXCEPTIONS" exclude manufacturers.
    I have only 2 allegiances, to my country and to my God. The rest of you are fair game.

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    i have heard lots of bid horror stories, i hope i dont have one. I think and have been told and read multiple times is to do your homework and get out there and talk to everyone you can. Everyone has a favorite manufacture and thats ok.

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    Quote Originally Posted by islandfire03 View Post
    OK I'll conceded that "Rigging" may not have been the correct word.How about Collusion
    When salesmen "A" works with a dept to create a spec that only one single builder can produce a vehicle in full compliance with. That IS collusion and fixing the bid process.
    Whether the salesman is associated with the department that is purchasing the rig or not, the department is still the one who approached him about the specs. Why WOULDN'T the salesman try to make a propietary spec for his product - that's what a good salesman does!

    I still say that the responsibility falls upon the purchaser.
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    Content deleted by author.
    Last edited by Firefighter807; 07-08-2009 at 11:07 PM.

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    Quote Originally Posted by BoxAlarm187 View Post
    Whether the salesman is associated with the department that is purchasing the rig or not, the department is still the one who approached him about the specs. Why WOULDN'T the salesman try to make a propietary spec for his product - that's what a good salesman does!

    I still say that the responsibility falls upon the purchaser.
    The problem occurs when the dept and the salesmen create a spec that doesn't allow any other bidders to compete. Under the bidding procedures they were supposed to be following under law they rigged it so there could only be ONE successful bidder and no others. Didn't matter what price said dealer came in at ,he was the only one to meet the carefully crafted bid spec meant to negate the competitive bidding process. If a company wants a product from builder "A" only and subverts the legal bidding system it is violating the law meant to protect the taxpayers that are funding the purchase.
    What if you wanted a custom parade widget and didn't give a damn how much it cost because you weren't paying the tab, yet the board of commissioners said there is a perfectly acceptable widget available from Company "B" at a greatly reduced price and then you went and found a way to subvert the law so you got widget "A" due to a ornament that you particularly like, in spite of the fact that the law states you must go out to competitive bidding in purchasing . Then you have broken the law.

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    Default Just a reversal.

    It may not be a direct payment but this happens with most manufacturers. Pumps, engines, warning lights, paint and roll up doors. The component manufacturer gives a better price if you use thier product as a standard. You will never never change this.

    If I get a better price for lets say fire pumps from brand X than i do, then I would be alot closer in price to another manufacturer who has a working relationship with brand X and gets thier discount. Should different manufacturers get different pricing if one sells 10 pumps from brand x a year and my company sells 200 from brand Y. I think it's only fair that the pricing I get from brand Y is better.

    Or lightbars I get a great price from brand A but the same as everybody else does from brand B. This makes brand A less expensive sell to a department who has little money, even though I think brand B is a better product.

    Then there is the "secret" world of incentives. I can get get from different manufacturers an incentive to sell thier product over someone elses. Is this wrong, who's to say?

    I am in apparatus sales to make money, I belive in a fair profit and a good quality product.

    I would prefer the customer to advertise my specification. The customer makes the decision on which product to advertise and purchase I can only make my suggestions as to the "working relationship" that one product has with the company I represent. If ever asked again to be on an apparatus committee I would want to be a non-voting member and just be there for techinical assistance.
    Last edited by Fyrtrks; 12-30-2008 at 03:39 PM.
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    Lightbulb Sales is Sales, it's your job to get the best deal

    The final judgment must lie with the purchaser. If you're spending taxpayers dollars (that includes the money they donate) they expect you to provide the most fire protection you can for that dollar. This means you must conduct some due diligence. I'm sure nearly every salesman out there prays for and preys on the poor unsuspecting customer who has no clue what they need and how to go about getting the best bang for the buck. Just as you must suspect the car salesman of trying to make the most money he can on a sale, you have to expect the firetruck salesman is doing the same. Hard to resent them for doing it, this is how the game is played with sales of any product. If you were speccing hamburgers and wanted Burger king you require they be flame broiled. In the end some people will not be happy with anything but Big Macs, and the taxpayers will wonder why you couldn't buy hamburgers and grill them yourselves.

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    As we have seen in recent years buying low bid to save the taxpayers money is not always the correct thing to do. There are departments that are still waiting for their ALF's to be delivered. That was a great savings to the taxpayers!

    Finally when you have a situation where a mayor or a council or a purchasing agent is making the decision and not the fire department they should write as tight a spec as possbile so at least they have a chance of getting what they want and need, not some bottom feeder.

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    Quote Originally Posted by sven73 View Post
    As we have seen in recent years buying low bid to save the taxpayers money is not always the correct thing to do. There are departments that are still waiting for their ALF's to be delivered. That was a great savings to the taxpayers!

    Finally when you have a situation where a mayor or a council or a purchasing agent is making the decision and not the fire department they should write as tight a spec as possbile so at least they have a chance of getting what they want and need, not some bottom feeder.
    I agree that low bid is not always the answer. Low bid that meets a quality spec is often the best case for the taxpayers. This does put a lot of pressure on the FD to do its homework and develop a spec based on sound reasoning and judgment. Sadly, many FD's don't have the time or resources to complete this. If the truck is a lemon, as all builders make from time to time, it can reflect poorly on the FD, especially when the taxpayers are already suffering. I'd much rather have a lemon built to a decent spec, then one purchased with no other bids in todays economic climate. Components fail regardless of the builder and quite often not by any doing of the builder.

    We've purchased a few ambulances that were low bid that met the spec. Some have been complete a POS and the committee blamed low bid, to which we answered "write the specs better". Every unit becomes part of the spec evolution towards the "perfect piece".

    I might add that having a city purchasing agent or City manager who makes decisions without knowing the intended uses is not the best use of taxpayers dollars. That may be fine for copiers, fleet vehicles and staplers, but fire apparatus? No.

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    Quote Originally Posted by islandfire03 View Post
    What if you wanted a custom parade widget and didn't give a damn how much it cost because you weren't paying the tab, yet the board of commissioners said there is a perfectly acceptable widget available from Company "B" at a greatly reduced price and then you went and found a way to subvert the law so you got widget "A" due to a ornament that you particularly like, in spite of the fact that the law states you must go out to competitive bidding in purchasing . Then you have broken the law.
    Remember that the purchasing laws very greatly from state to state. Here in Virginia, for example, we don't have fire commissioners (95% of the state wouldn't even know what a commissioner is, I would bet) and purchases are only required to go out to bid when "X" amount of municipal monies are being used. If a VFD wants to use thier own money (whether its through donations OR monies given directly to them through the locality) to make an apparatus purchase, they aren't required to go to bid.

    I'm hardly defending departments that write narrow specifications that only a particular manufacturer can comply with, but i can't fault the salesman for looking out for his best interest and trying to steer the committee towards his product.

    The key to a purchasing agent is to educate them. At work, we allow the purchasing agent assigned to the FD to sit in our our apparatus committee meetings, make factory trips with us, and watch the vehicle in use. It's not "bribing" them, but rather, making justification for the things we want/need that the P.A. might not see otherwise.
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    I do understand that purchasing requirements are different in each state or town. The case in point was referenced to the investigation in NJ where they are required to go to competitive bidding for purchases and they crafted a spec to subvert the system to get what they wanted no matter what the price was on accepting the bid.

    I am a firm believer in making it quite clear in our bid specifications that we are not bound to accept the LOWEST $$$ bid, But the bid that most meets our spec with the least exceptions of substantial manner that will affect the longevity and safe operation of the vehicle.

    In our recent ambulance spec we wrote what I believed 4 or 5 manufacturers could meet if they wanted to. The spec package was 29 pages including the chassis and type III ALS box. We specified a lifetime structural warrantee on the box, a lifetime on electrical system. A 10 year paint finish & corrosion warrantee, and the standard chassis warrantee packages. We specced Whelen LED lighting as we can get replacement parts locally, not always the case when a builder uses an off brand chinese copy. The same for the brand and type of tires on the chassis, We spec Michelin because of the proven track record we've had with them in the past, and our local tire service is a Michelin dealer. All of these item can be bid by any builder. I also required a large 18 x24" scale drawing of interior and exterior compartments along with the submitted package. One of the bidders couldn't even be bothered to supply a set of scale drawings sending along an 8x11" copy of the advertising literature instead, in addition to taking exceptions to 11 out of 46 individual items. They were not the high or low bidder when the bids received. They did however score very low in our competitive analysis of bid received. Several vendors chose not to bid as we put in the spec that they were require to be licensed by Our state as new vehicle dealers, and must maintain a service facility within 3 hours travel of our dept.
    That sentence provide us with legal protection under our state laws, rather than trying to persue a claim in the court system of a different state..

    Is that writing a spec that only allowed one vendor to bid? NO , it's writing a spec that will provide us with a vehicle that meets our needs and is responsible to the taxpayers [including ourselves] that are paying for it.

    In the end we ended up signing a contract with a company that builds a quality Ambulance with a great track record , that is being used by many departments in the state, AND happened to be the low bidder by a couple thousand dollars.
    And yes in the end we got the truck built by the manufacturer we preferred but only after a fair and competitive bidding process and by analysis of the bids submitted scored independently and equally That just happened to be the lowest bid.

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    Quote Originally Posted by sven73 View Post
    As we have seen in recent years buying low bid to save the taxpayers money is not always the correct thing to do. There are departments that are still waiting for their ALF's to be delivered. That was a great savings to the taxpayers!

    Finally when you have a situation where a mayor or a council or a purchasing agent is making the decision and not the fire department they should write as tight a spec as possbile so at least they have a chance of getting what they want and need, not some bottom feeder.
    Ahhhhhhh thats right from page 48 of the "How to circumvent municipal bidding processes and get your Pierce" Handbook.
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