Procurement: Breaking Brokers

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January 6, 2010: South Korea has had its problems with corruption in military procurement. A study of how often, and to what extent, corruption occurs, revealed that payoffs and kickbacks are much more likely to occur when purchases are made, from a foreign civilian firm, using a broker (someone who specializes in dealing with foreign firms, and their often strange ways.) About two-thirds of South Korean purchases of military equipment from overseas suppliers are from civilian firms. The rest are government-to-government purchases, where the foreign government makes all the arrangements on their side. Thus the South Korean are going to try and do more of their purchasing via the government-to-government route. This way, there will be more safeguards (and inspectors) on both sides of the transaction.

 


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