A June 2011 POGO press release states that Boeing overcharged the Army millions in spare helicopter parts, such as $1,678.61 "for a plastic roller assembly that could have been purchased for $7.71 internally from the Department of Defense's own supplies." Boeing is ranked second in instances of contractor misconduct.
These kinds of antics have no effect on these companies' status as government contractors. The fact that the top 5 defense contractors named above were among the top 6 defense industry contributors to federal political candidates and parties in the 2014 election cycle undoubtedly plays a major role.
Furthermore, this kind of waste has been largely built into the system of Pentagon contracting over the years in the form of cost-plus practices in the negotiation process. As the late Seymour Melman, an analyst who specialized in the workings of the military-industrial complex, detailed in his writings, the practice of cost-plus or cost-maximizing defense contracts, in which an agreed upon profit margin was simply added on to the previous cost of producing the product or service, had cropped up during WWII and was institutionalized during Robert McNamara's tenure as Defense Secretary during the Vietnam War. Not only did this practice result in increasingly inflated price tags for the tax payer, it also discouraged quality control and increases in productivity, and encouraged labor unions in the affected industries to partner with management to the detriment of their own interests. Moreover, the practice bled over into other sectors of the government, such as health care contracts, and even into the private sector.
This cost-maximization, combined with the frequency of no bidding and the companies' generous campaign contributions, makes these kinds of problems all too pervasive and easy to predict.
When more and more private corporations have entered the market with a profit motive in favor of military conflict, incentives to overcharge taxpayers built into the system, and legalized bribery that passes for campaign financing, what are the chances for a conversion from a war economy to a peaceful, civilian economy as the end of the Cold War provided an opportunity for?
A Formula for Economic Conversion
"Whatever else you can do with a tank, you can't eat it, wear it, live in it or travel in it. And whatever else you can do with a nuclear-powered submarine or with a military helicopter, you can't produce anything with it." -- Seymour Melman
Melman's proposals for economic conversion were predicated upon a partnership between management and labor. For practical reasons, the workers needed to be part of the planning due to their intimate knowledge of the parts, tools and machinery involved in current production and its potential utility in manufacturing civilian goods and determining which ones would have the most successful possible outcome for conversion. Members of corporate management, who were typically far removed from the daily workings on the floor, would often make conversion plans on paper -- if left to their own devices -- that were unworkable when put into practice. Initial attempts at conversion in the Soviet Union failed due to this very problem.
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