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Government's Timeout System Needs Reform

March 4, 2005 


The Los Angeles Times is reporting that the Air Force is going to lift Boeing's suspension from receiving future government contracts. Boeing's suspension was the result of the company stealing proprietary rocket documents from rival Lockheed Martin. The suspension was nothing more than a paper tiger – the government waived the suspension on three occasions; a move that permitted Boeing's suspended division to receive contracts.

On March 2, 2005, the U.S. government slapped Titan Corporation on the wrist by reaching a $28.5 million settlement (the largest foreign bribery penalty to date for a public company) when the company resolved both criminal proceedings brought by the Department of Justice and civil charges by the Securities and Exchange Commission. To provide an olive branch to the company, the Navy awarded Titan a contract to provide navigation systems installation support services for up to 5-years with a potential value of $125 million.

In both cases, Boeing and Titan officials were able to convince the Department of Defense suspension and debarment officials that they had changed their internal controls and therefore they are now responsible contractors.

Scott Amey, general counsel of the Project On Government Oversight (POGO) stated: "The government's system to hold contractors accountable is not working. Like a mistreated consumer who won't provide repeat business to a restaurant, the government must send the similar message – be responsible or else." 

Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO's investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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