![]() ![]() We also discussed starting that process now (to speed up design and construction as we have an tight deadline) and having the new contract include Preliminary Engineering, which has yet to be done under Phase 3 of the existing contract. We have recently discovered that we will need someone to perform Project Management Oversight for the Design, Construction, Maintenance and Operation of the Streetcar. We have a consultant on board for work through Preliminary Engineering. We are in the process of planning for a Modern Streetcar. The subject of cardinal changes is discussed in the Best Practices Procurement Manual, Section 5.1 – Contract Changes. That would be a cardinal change since it goes far beyond the level of services the parties originally had in mind when the contract was awarded. However, if you awarded a contract based on a requirement for $150,000 in towing services, you could not issue a change order against that contract to require twice the volume of services. We would advise you to amend the RFP to give prospective vendors your more accurate estimate of the volume of services required. Does this constitute a cardinal change for which we should cancel the RFP and re-bid? We believe we could get a better price based upon our higher usage. However, the engines in our fixed route buses have a defect, and now we project that towing expenses will be at least $300,000. We recently issued an RFP for towing services with an estimated annual expense of about $150,000. The improper payments took a variety ofįorms, including cash, luxury goods, gift cards and travel.Frequently Asked Questions Q. Paid approximately $250 million from the marketing accounts. During the period of 2013 to 2016, Cardinal Requiring proper documentation and justification. Interestingly, after the acquisition, Cardinal ordered the termination ofĬardinal China continued to operate a number of accounts for several largeĬardinal discovered misconduct and improper payments being made from someĪccounts, Cardinal continued to operate the remaining accounts and neverĬonducted a reassessment of the risk profile of these accounts.Ĭardinal provided marketing funds for dermocosmetic purposes without Or the marketing staff with access to these accounts. Result, Cardinal did not apply its full accounting controls to these accounts While Cardinal terminated many marketing accounts because of FCPA risks,Ĭardinal inaccurately analyzed the accounts associated with the dermocosmetic Cardinal did not supervise their day-to-dayĪctivities, and the marketing staff was responsible for drawing down the fundsįrom the marketing accounts to promote dermocosmetic products. ![]() Non-prescription, over-the-counter dermocosmetic products in China.Īdditionally, Cardinal employed 2.400 employees for the dermocosmeticĬompany pursuant to an administrative and HR services agreement. Notwithstanding this effort,Ĭardinal maintained marketing accounts for a European supplier of Marketing expenses to third-party distributors. Marketing accounts because of FCPA compliance risks associated with payment of These marketing accounts as directed by the employees of its distributionĪfter acquiring the Chinese subsidiaries, Cardinal terminated most of the Cardinal authorized and made payments from ![]() Return these funds to customers under their contracts. Operations, Cardinal maintained certain financial accounts that certainĭistribution customers used to fund their operations and marketing efforts inĮxcess margin that Cardinal generated from distributing customers’ Global manufacturers of prescription medications, medical devices and consumer Subsidiaries of a pharmaceutical distribution company, which had longstanding Marketing account to channel payments to government officials in China.Ĭardinal entered the China market in 2010 by acquiring the Chinese The United States received a report that marketing employees were using Cardinal identified suspicious paymentsĭuring an audit of the marketing account expenses, and Cardinal executives in ![]() In December 2016, Cardinal voluntarily disclosed the conduct to the SEC,Īnd subsequently cooperated with the investigation. Of $5.4 million for disgorgement $916,887 for prejudgment interest, and $2.5 In particular, while Cardinal mitigated its corruption risks by terminating many of these accounts, Cardinal inaccurately assessed the risk of a specific marketing account that posed significant corruption risks.Ĭardinal agreed to pay a total of approximately $8.8 million consisting Cardinal acknowledged facts relating to internal controls deficiencies and its handling of marketing accounts that it supervised for its distributors. Cardinal Health (“Cardinal”) agreed to pay the SEC $8.8 million for FCPA violations in China relating to its internal controls and books and records. ![]()
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