Issues – politics Essay
Issues – politics
Boeing is one of the world’s best known manufactures of aircrafts and so is Northrop Grumman who are the manufacturers of the airbus (Online News Hour, 2008). These are two top brands who are obviously competing in other areas of business and therefore any decision that involve them is bound to raise considerable heat. It should b noted that both are American companies though Northrop Grumman is partly owned by a French company.
The nature of the contract which involves the security of America as a nation is a matter of national concern as it involves the development of structures that could ensure the growth of security systems. Boeing and Grumman being business structures, such a big contract will obviously attract the interest of stakeholders from both sides. There are a number of key issues that have been brought out by the airforce contracts which include:
Military contracts are a matter of public concern since it is in place to protect the public, the resources used in the military contracts are derived from taxpayers and therefore the failure of such projects will be a waste of taxpayers money (Meyer, 2007). When McCain questioned the cost effectiveness in leasing planes that would otherwise have no values when their lease period was over his motive as the senator of Alabama was to ensure that the taxpayers money is channeled to useful projects.
Furthermore, it is quite clear that the politicians have the ability to shoot down potentially useful deals due to what Northrop Grumman executives refer to as expensive lobbying. Politics is not always objective for there are situations where the stakes involved are shielded from the public and though the politics and viewpoints will be developed to suit the public, the real reasons are often personal (Meyer, 2007). The inclusion of politics in such cases therefore has both advantages and disadvantages and should be weighed carefully.
Military procurement just like any other public procurement scheme is prone to corruption, this was the case in the original contract that was brought to an end by Rumsfeld in 2006. Moreover, the big money involved in military procurement processes act as a natural catalysts for corruption, therefore there is need to come up with a robust self regulated systems that will ensure that such unethical practices are not in anyway included in the procurement process, the congress thus comes into the picture (Meyer, 2007).
However, the political system is not known for its objectivity. In the cases, some of the reasons brought out against Northrop Grumman are flimsy and lack in objectivity. The fact that there will be lobbying is a clear sign that there will be loss in objectivity thus the decision will tend to favor groups that are be able to garner enough political support in the congress. Furthermore, the political system is one of the most corrupt system there is and the rationale in placing such a system to guard against corruption is questionable. i.Security Military procurement is a security critical matter (Meyer, 2007).
The military is in place to ensure that the US is protected against its external enemies (Meyer, 2007). The seriousness with which the equipment tendering process is treated and the keen eye that the media watches the unfolding of such events relay the importance placed on the military by the American people. The US is traditionally a ‘fighting nation’ and the effectiveness of its military and equipments is one of the factors that has cemented its place as a world power.
Military activities require high levels of secrecy (Meyer, 2007). There is need to come up with effective equipments that can be used in varied situations. It should be noted that the arguments brought forward by the executives from both sides are centered around the superiority of their products or the weaknesses of their opposite. The need for accuracy and well developed products that have the required reputation are some of the considerations that led to the two big companies making it to the final stage.
The two companies are multinationals that have developed their brands all over the globe. It is noteworthy that when the US defense secretary cancels Boeing’s leases other nations still seek their products and are continues seeking the products that have been labeled cost ineffective due to the reputation associated with their brand name. The importance of the security system is seen in the number of avenues and legislative systems that have been put in place to ensure that the process is done in a just manner (Krishnan, 2008).
When the airforce declares that Northrop Grumman had won the bid for the airforce tankers, Boeing seeks redress through a different avenue: Public accountability office. The office looks at their complaints and decides to freeze the process. It should be noted that it was the same office that had early in the decades frozen a billion dollar Boeing contract due to corruption charges. Even though there are systems put in place to ensure proper procedures in procurement of services and services, they can be outdone easily (Krishnan, 2008).
The corruption allegations made in the initial Boeing contracts are a clear case where the protocols were overridden and it only came to realization a couple of months after the contracts had been signed. Furthermore, the fact that is was later found out that a different design could meet the specifications made by the airforce with reduced costs clearly show that even though the guidelines are put in place they are rarely followed thus the need for a system or authority that will follow up on the recommendations and processes to ensure that they conform to the laid out guidelines.
Some politicians have argued that the French affiliation of the airbus manufacturer is in itself a security risk and therefore a purely American company should be contracted. However, such a contracting systems will obviously lock out other capable companies and therefore bring about questions on the integrity of the bidding process. America has prided itself as being a liberalized nation, putting up measures that will lock out other qualified members on the basis of the compositions of its investors is contrary to the spirit of liberalization.
Furthermore, being involved with a company that has partnered with a success story in Europe shields the tanker project from American economic downtimes though it effectively ensures that the project is affected by the happening in Europe. It is unrealistic to lobby for Boeing on the basis of confidentiality; a company that has already shown traces of corruption cannot be trusted and neither can a company that is yet to prove its worth in the military sector.
Therefore, system should be put in place to ensure that the projects are monitored and compared to some given standards if either is to be awarded the contract. ii. Stability The US is the father of capitalism and is therefore a country that is characterized by intense competition between industry players who will always be on the look for additional finances that will ensure their development into the future (Verkuil, 2007). On the day it was reported that Northrop Grumman had won the military contracts its share prices rose by over 20 cents and Boeing’s shares fell by a couple of cents (CBS News, 2008).
Note, the development in the contract procurement were being watched by investors who will then make their decisions on which company to invest in. Even though the large money involved in the transactions may be enough to lure investors into channeling their resources to a particular company, the reputation involved in being a company contracted with one of the world’s best airforce to develop its aircraft tankers is enough to cause significant changes in the company’s share index. Being a capitalistic economy where entities gain at the expense of others, Boeing is bound to feel the pinch.
The situation is made worse by the consideration that Boeing has a well developed reputation and therefore failure to win a contract from a partner that it has associated with for a long time may be taken by the investors and its consumers in the wrong light. It may imply that the partner does not trust its capacity to develop superiors products or has doubts on its potential to remain productive. To bring the idea of reputation into perspective, many are of the notion that the corruptions charges brought against Boeing may have affected its chances of successfully bidding for the contract (Verkuil, 2007).
This holds considerable weight in that the military is not all about facilities but also reputation. The American people and its enemies will always keep a keen eye on the military and any transactions conducted with a partner who is proved to be corrupt will dent on its integrity thus its reputation. Conclusion Awarding a contract to a company to deliver services that are of public interest is a complex process and will always involve the media and many other systems that have been put in place to ensure the safety of the public.
Individual good and interest will always be central in the arguments brought forward by most people, this is more pronounced if the contract will significantly affect many people. It is therefore upon the government and the social systems to ensure that the systems put in place to ensure effectiveness of the bidding process are functioning properly and are robust enough to deal with the dynamism associated with such processes. If need be, changes must be instituted to ensure that the system are functioning.
The products delivered must measure up to some predetermined standards to ensure quality and accountability. These measures and other quality management measures if well integrated into the bidding and implementation of contracts that are of public interest will ensure that the public benefits in the best possible way.
Word Count: 3271 ,Reference List CBS News (2008). Boeing Spurned On Huge Air Force Contract. Retrieved 13 October 2008 from <http://www.
cbsnews. com/stories/2008/02/29/business/main3894669. shtml? source=RSSattr=Business_3894669> Krishnan, A. (2008). War as Business: Technological Change and Military Service Contracting. Aldershot: Ashgate Publishing, Ltd. Meyer, J. (2007). Working in a War Zone: Military Contractors. New York: The Rosen Publishing Group. Online News Hour (2008). Boeing, Northrop Grumman Clash Over Tanker Contract.
Retrieved 13 October 2008 from <http://www. pbs.org/newshour/bb/military/jan-june08/tanker_05-06. html. > United States Government Accountability Office (2008). Statement Regarding the Bid Protest Decision Resolving the Aerial Refueling Tanker Protest by The Boeing Company. Retrieved 13 October 2008 from <http://www. governmentexecutive. com/pdfs/061808cd1. pdf> Verkuil, R. (2007). Outsourcing Sovereignty: Why Privatization of Government Functions Threatens Democracy and what We Can Do about it. New York: Cambridge University Press.