How to work with government customers in IT and not get behind bars?

Main article: Criminal cases in the information technology market of Russia

The Minister of Digital Development, Communications and Mass Communications of RFM.I noted the relevance of such issues last year . Shadaev:

We all understand that we have a public sector - a very large customer: state-owned companies, government agencies. We know that in relation to all large IT companies, almost everyone, there are criminal cases of the[1].

The main criminal risk for an IT company that directly or indirectly participates in the performance of work for state customers is the presentation of claims to top managers under Art. 159 of the Criminal Code of the Russian Federation "Fraud."

According to a dannymgenprokuratura of the Russian Federation, from 2019 for 2021 the number of the registered crimes on fraud increased on a third^[2]Given the changes adopted in March this year on the procedure for initiating criminal cases for tax crimes, according to which law enforcement officers will now be able to make an appropriate decision only on the basis of materials received from the Federal Tax Service, it becomes not interesting for OEBiPK employees to conduct independent checks for tax evasion until the tax check passes.

In this regard, there is every reason to believe that the police will redirect their resources to strengthen control over the expenditure of budget funds, including those allocated for the implementation of IT projects, which will entail a closer attention of the security forces to the legality of the implementation of budget funds.

The main criminal risk for an IT company that directly or indirectly participates in the performance of work for government customers is the presentation of claims to top managers under Art. 159 of the Criminal Code Russian Federation "Fraud"

Why do they make claims of fraud?

In practice, there are two key circumstances that play a decisive role in drawing the attention of law enforcement officers to the transaction: collusion with the supplier and damage.

Collusion between the customer and the supplier is inherently evidence of wrongfulness and deception (mandatory signs of fraud). The facts that can be regarded by the security forces as indicating the existence of collusion, in particular, are:

• participation of the supplier in the formation of the technical assignment;
• participation of the supplier and its affiliates in the formation of the initial maximum contract price (for example, submission of three commercial proposals at the initiative of the future winner);
• Creation of conditions under which only one organization or group of affiliates meets the requirements for the subject matter of purchase or supplier (for example, inclusion in the specification of the condition for the supply of equipment with characteristics under which a deliberately limited number of equipment falls, if there is no objective need to present such requirements);
• illegal refusal of admission to participate in the competition of other participants;
• Establishment of unrealistic contract execution dates.

If law enforcement officers find the deliberate creation of conditions for the victory of a particular supplier, the presence of informal communication between the supplier and the customer before the announcement of the tender, in the process of its holding, as well as during the execution of the transaction, they will be able to come to the conclusion that there is a conspiracy.

The second circumstance, as already stated, is the infliction of damage that can be identified if the fact is established:

• Overstatement of work costs;
• overstatement of the scope of work (for example, inclusion in the terms of reference of the functionality of the created product, which is not implemented in practice);
• acceptance of unfulfilled or poor-quality work results.

It is important to understand that in case of detection of incomplete fulfillment of obligations under the contract, the entrepreneur has a risk in cases where he did not have any collusion with the customer. In such conditions, claims under article 159 of the Criminal Code of the Russian Federation will be made only to representatives of the supplier, and the customer will act as a deceived person.

Situations related to the signing of acts by the "front number" have a separate risk, this is especially relevant at the end of the year.

A simple example:

For example, the performer honestly won the competition and began work on creating a certain product, but for some reason, even if absolutely objective, he could not meet the deadlines outlined by the contract or stage of its implementation. By the end of the year, bureaucratic pressure began with proposals for signing acceptance acts with a "gentleman" agreement that the supplier would complete work within the next couple of months. The Contractor, being interested in paying for its work, agrees with such an offer, prepares an invoice and closing documentation, including for unfulfilled scope of work. The customer signs and pays them.

This situation in practice carries serious risks, since the fact of acceptance of underdog work can be interpreted by law enforcement officers as the presence of a conspiracy between the customer and the supplier, and an underdog amount of work - as damage. At the same time, such situations entail risks under both Art. 159 and Art. 160 of the Criminal Code "Waste." In the latter case, the contractor's management is recognized as the perpetrator of the crime, who signed acts on the unfulfilled volume and paid for it, and the representatives of the contractor who presented the results of the work for acceptance are accomplices.

It is worth paying attention to the prospects in the criminal case, in case of its transfer to court. So, according to the statistics of the Judicial Department at the Supreme Court of the Russian Federation, for the first half of last year under Part 4 of Art. 159 of the Criminal Code (fraud in the amount of over 1 million rubles) 47% of the defendants were sentenced to real imprisonment, 46% were sentenced to probation. Moreover, in the absolute majority of cases, the term of imprisonment is from two to five years. And only 1.2% of the defendants were acquitted^[3].

Separately, it is worth highlighting the financial risks of persons prosecuted. So, in the event of a conviction, a civil lawsuit for the amount of damage caused is almost always satisfied, and here the financial consequences are imposed not on the company that executed the contract, but on specific defendants in the case.

How can IT companies reduce criminal risks?

1. Pricing

If the claims of law enforcement officers are associated with a suspicion of overestimating the cost of work, the lack of evidence of the supplier's participation in the preparation of technical documentation, the formation of the NMCC and the creation of conditions for the victory of this particular organization will help to offset the risks. With real inattention to the indicated processes, the representatives of the company that executed the contract, even if there is a fact of incorrect price formation, this will be the result of improper work by the relevant services of the state customer and the expert organization that approved such a cost. In such conditions, it is advisable to talk about the possible presentation of claims to civil servants, and not to the supplier.

In the event that the price of the state contract is objectively market, an examination or conclusion of specialists who confirm this fact, correlating the cost with similar projects, types of work and software, can be a good evidence of the unfounded presentation of claims.

2. Proper quality

If the suspicions of law enforcement officers cause the quality of the work performed or the completeness of its execution, then the contractor must justify and confirm the legality of his actions as part of the fulfillment of obligations under the state contract by paying attention to the inspectors for the real development of the product within the established time frame and in the established volumes. It is important to understand that the indicated item is effective if the product was actually created within the order and meets the required characteristics.

Recommendations that can significantly facilitate the task of proving the integrity of the contractor:

• Monitor the completeness of project obligations.
  It is especially important in no case to present the results of the work for acceptance and subsequent payment in cases where they have not actually been completed.
• Observe the established procedure for testing the work results, provided for by the regulatory and technical documentation contained in the TA.
  Some market participants in the implementation of projects ignore the requirements of the corresponding GOST, dedicated to the proper testing of automated systems. The product being developed should be subjected to full preliminary tests, trial operation, as well as acceptance tests. At the same time, it is important to pay attention to the fact that the working log during trial operation should be really kept and reflect the actual course of such operation.
  The establishment by law enforcement officers of the fact of circumvention of all these procedures, if shortcomings in the project are identified, allows them to conclude that there is a conspiracy between the customer and the supplier in order to steal funds in the amount of the cost of the work not completed.
• Properly formalize relationships with actual performers.
  Sometimes, when implementing the project, there is a need to attract third-party specialists and companies, including from other regions or even countries, while not always contractual relations are properly formalized. Subsequently, the supplier risks problems proving his innocence.
• Keep any "traces" of work performance, in particular:
  • documents and electronic correspondence confirming "activity" within the company itself, for example: appointment of a project manager, approval of the composition of the team to work on the project, work on the project itself;
  • correspondence (written, electronic) with the customer and co-executors;
  • contractual documentation and certificates of acceptance of specific stages of work with co-executors.

• Keep the results of the work performed on the project by the contractor and the co-contractors involved by him (if such an opportunity is provided by the terms of the contract).

It is in IT companies that this is always a problem. Software and all reporting documentation should be stored for 10 years - this is the statute of limitations under Art. 159 and 160 of the Criminal Code.

Separately, it is worth paying attention to the method of storage: documentation and electronic information should be stored in a safe place, otherwise there is a risk of losing them on the first visit of the security forces to the company's office, which will make it difficult to independently conduct examinations confirming the completeness of the contract obligations. The saved "traces" of the work and their results will be a kind of defense file that can play a decisive role in the event of a complaint.

See also

IT outsourcing services carry the risks of criminal prosecution. Why can they put employees of the performer?

Notes