Case Study # 1 - A major company was unsuccessful in bidding on a complex gyroscopic control system for a military aircraft. Using strong political connections with the White House, they forced a Pentagon level review of the evaluation. The proposal claimed all portions of the system were produced in company facilities. On a visit to one of the qualified suppliers of Rate Switching Gyros, Air Force personnel had witnessed production of units with name plates of the major supplier. The qualified supplier was a very small company.
Is it ethical for a company to subcontract equipment and then claim in a proposal that it is produced in house?
Where is the line drawn between a typical purchased subassembly which goes into a larger product?
It was not ethical to claim in house manufacture of the Gyro
when it was in fact subcontracted as a complete unit.
Since this unit had a separate specification and supply number, it could not be considered as a typical subcontracted subassembly. Despite
the very strong political connections, the original review stood.