The Michigan Alliance for Disarmament believes thatone of the first steps in the process of economie conversión is correcting the current system of defense procurement. There is a symbiotic relationship between the Pentagon, contractors, consul tants, and legislators. Corruption and fraud arerampant in the defense procurement system. The list of scandals and fraud runs the gamut from "insider information" contractors receive from consultante to the advocacy of unneeded weapons by legislan M il ïury contractors commonly defraud the govemment by any number of mcthods. Usually a favored contractor tums in the lowest bid. They are subsequently awarded the contracL Later, they submit sharply higher, revised estimates that are routinely approved by the Pentagon (Christian Science Monitor, 91987). To the casual observer, the process looks legitímate. The deceit becomes obvious only to someone familiar with the defense procurement system. The contractors often spend beyond even these revised estimates. Even when it is publicly disclosed that these companies are cheating the government, military contractors do not face very stiff penalties. General Dynamics was charged by the General Accounting Office with $100 million dollars in il legal practices. It was only after Congressional and public exposure that the administration conducted its own "investigation," resulting in the suspension of General Dynamics contracts. A few months later, the contrae ts were reinstated. No criminal action was taken (Christian Science Monitor, 91 787). A Pentagon study revealed that over a four year period the Pentagon was overcharged almost $800 million in inflated labor costs. As Rep. Denny Smith (R-Oregon) has said, "The problem is not that there is fraud in defense procurement. The problem is that defense procurement has itself become a fraud."
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