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Editor’s Note: This post is from regular contributor Norman Katz, Sourcing Innovation’s resident expert on supply chain fraud and supply chain risk. Catch up on his new column in the archive.
When most people see the term “military sacrifice” they think of what our service men and women give up in terms of their personal lives, safety, and well-being for the honor of protecting the interests and citizens of the United States and our allies.
Yet some frauds sacrifice our military in ways that could have deadly consequences, and these fraudsters do so for nothing more than financial gain.
In the case of a Miami Beach (FL) man, this twenty-something year old entrepreneur somehow secured government contracts worth tens of millions of dollars to provide ammunition to US troops overseas. Not only was some of this ammunition decades old and effectively not operational, but some of it came from China (not okay with the US military) though it was labeled as coming from Albania (okay with the US military). Can you, readers, imagine the harm and death to US troops using dysfunctional ammunition? Imagine fighting for your life in a combat zone and having your own weapon malfunction — perhaps even causing serious or otherwise life-threatening injury — due to substandard ammunition while someone in the country you are sworn to protect is living the high-life from profiteering off this fraud? Imagine being pinned down and not being able to fight back due to ammunition failure.
In another case, a US military subcontractor manufacturing night-vision goggles was going to outsource production to China strictly for profit purposes. The technology behind the US military’s night-vision goggles is one of the most closely guarded secrets in our arsenal, and yet these folks were going to hand over to China — a well-known Communist country — the plans and details. So much for a key technological advantage our military troops have in nighttime combat. What would have prevented this technology from falling into the hands of the Chinese military, let alone being sold to the militaries of countries and groups truly at odds with the US? And again, US citizens would have profited by sacrificing the lives of our service men and women.
In both cases, the motivation was greed, pure and simple. I don’t know how these people can live with themselves and what examples they are setting for others to follow, but as I recall both of these instances I am seething with anger. Our military forces deserve nothing but the very best: the military cook deserves to use the finest pots and pans and utensils available, and the combat troops worldwide deserve every advantage — food, technology, armaments, defenses, support services, etc. — that can be provided to them.
Fortunately both frauds were caught in time before secrets were revealed and serious harm done. Yet frauds that can ultimately cost lives continue to occur: when military contractors overbill for goods and services, if monies must be diverted from other uses to pay those bills, then the fraud can be more than just about overcharges and billing — the consequences of such frauds can result in injury and death due to underfunding or delays in other critical areas.
Similarly, consumer product frauds risk the health and well-being of the product users. Avoiding quality assurance testing to save money and shipping knowingly bad product puts lives needlessly at risk. What is the cost of a human life? Well, it seems that some organizations have figured out the price, and it looks pretty cheap from my perspective.
Honest mistakes happen all the time, readers, but in this day and age we’ve got more technologies and business practices than ever to help ensure errors are caught and corrected before damage is done. Yet just like at some point in our lives we’ve each got to act our age, at some point an organization has to act its size and get itself together, simply as a matter of course and without being asked to do so. To the executives out there I say this: The life that is ultimately saved may be yours or that of someone close to you.
Norman Katz, Katzscan