Abstract

It's Waste as Usual at the Pentagon

The U.S. Air Force suspended General Electric, the Pentagon's fifth largest contractor, from doing business with the government for doctoring labor time sheets to the tune of $800,000. Within days, the General Services Administration announced it wouldn't even buy General Electric Co.'s tainted light bulbs. The Pentagon's highly publicized war on waste seemed finally to have wounded a major contractor. But it didn't take long for the headlines to fade and the suspension to be lifted. By the time General Electric pleaded guilty on May 13 to 108 counts of filing false claims, the Air Force had already ended the ban against all the company's affiliates except the Space Systems Division, where the fraud occurred. John Welch, the chief executive officer, recently told shareholders the suspension would have no significant impact on this year's earnings.