This paper examines ethical issues faced by public sector employees and employees of private sector firms that conduct business with and for government agencies. The paper discusses Halliburton, a U. S. defense contractor, in light of the primary issue, several secondary ethical issues, and the impact on stakeholders involved. The goal is to make recommendations for how prospective employees and managers can handle similar situations. Overview of Contracting Activities at Halliburton Since 2001 energy services company Halliburton and it’s subsidiary KBR have performed unspecified services to the U.
S. military in Iraq, Kuwait, and serveral other countries under a no-bid, long-term global logistics contract, LOGCAP. During the course of awarding and executing these contracts at least two persons have made the decision to become whistle blowers, a government contracting employee and a Halliburton/KBR procurement employee. The government employee disclosed that Halliburton/KRB was involved in closed-door meetings with the Army Corps of Engeneers that resulted in the no-bid, multi-year, billion dollar contract being awared exclusivley to Halliburton/KBR.
(Morning Edition October 29,2004) The procurement employee disclosed that activitities inside Halliburton/KBR resulted in overcharging the government and taxpayers for goods and services and eliminating competition among potential vendors. Specific allegations include soliciting higher priced products and services because the government pays a fee bassed on the total of goods/services procured and manipulating purchases orders to maintain a maximum of $2,500 to avoid the bidding process between prospective vendors.
Stakeholders The stakeholders in this situation are the client, the U. S. government; taxpayers who are the investors or funders of the government; the vendors, who through the bidding process maintain a competitive and profitable business environment; and employees who make sure that their employers receive the best value for the services and products they procure. Ethical dilemmas Should employees bring wrongdoing to light and if so, how?
Will the decision violate the privacy of vendors or other employees? Is it legal to disclose certain activities related to defense contracts? Secondary ethical issues relate directly to the stakeholders. Is the U. S. government unfairly awarding contracts? Is that awarding process facilitating a culture of overcharging, which is absorbed by U. S. taxpayers. Are vendors intentionally overcharging Halliburton/KBR? Are Halliburton/KBR’s procurement practices eliminating competition in the marketplace?