Procurement: Too Greedy And Sloppy

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May 10, 2015: The owner of two American companies (One Source USA and Caldwell Components) that made basic metal components for military equipment (in this case F-15s and nuclear subs) recently pled guilty to crimes that included providing similar firms in India with the specifications for these components. While the components were low tech they were classified and were supposed to be manufactured in the United States. The owner of the two firms (Hannah Robert) had found it much more profitable to shut down her U.S. based manufacturing facilities and subcontract the work to a firm in India. This, however, involved sending classified technical drawings (via email) to the Indian firms, where no one had a security clearance to handle that stuff. Worse, some of the items produced by the Indian firms proved sub-standard and were discovered by the air force when some of them failed and dozens of F-15s were grounded for inspection and replacement of substandard parts. The investigation eventually led to the supplier of the bad parts and the reason why. The owner of the two companies, faced with all that evidence, pled guilty and will probably spend at least five years in jail.

Greed and stupidity (for not checking the quality of the overseas parts) made detection almost inevitable. This sort of thing doesn’t happen often, but it does keep occurring because there’s always someone too greedy and sloppy to try it and then get caught. Note that this is not just an American problem. It happens everywhere and with greater frequency in places like Russia and China, where there is a lot more corruption in general.

 

 

 


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